CONFIDENTIAL Mr. Douglas Swirsky Chief Financial Officer, Corporate Secretary and Treasurer GenVec, Inc. 65 West Watkins Mill Road Gaithersburg, MD 20878 Dear Mr. Swirsky:
Exhibit 10.1
December 19, 2006
CONFIDENTIAL
▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Chief Financial Officer, Corporate Secretary and Treasurer
GenVec, Inc.
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▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Chief Financial Officer, Corporate Secretary and Treasurer
GenVec, Inc.
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Dear ▇▇. ▇▇▇▇▇▇▇:
This letter (the “Agreement”) constitutes the agreement among ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, LLC,
the placement agent (“R&R”), (the “Placement Agent”), and GenVec, Inc. (the
“Company”), that the Placement Agent shall serve as the exclusive placement agent for the
Company, on a “reasonable best efforts” basis, in connection with the proposed placement (the
“Placement”) of registered securities (the “Securities”) of the Company, including
shares (the “Shares”) of the Company’s common stock, par value $.001 per share (the
“Common Stock”). The terms of such Placement and the Securities shall be mutually agreed
upon by the Company and the purchasers (each, a “Purchaser” and collectively, the
“Purchasers”) and nothing herein constitutes that the Placement Agent would have the power
or authority to bind the Company or any Purchaser or an obligation for the Company to issue any
Securities or complete the Placement. This Agreement and the documents executed and delivered by
the Company and the Purchasers in connection with the Placement shall be collectively referred to
herein as the “Transaction Documents.” The date of the closing of the Placement
shall be referred to herein as the “Closing Date.” The Company expressly acknowledges and
agrees that the Placement Agent’s obligations hereunder are on a reasonable best efforts basis only
and that the execution of this Agreement does not constitute a commitment by the Placement Agents
to purchase the Securities and does not ensure the successful placement of the Securities or any
portion thereof or the success of the Placement Agent with respect to securing any other financing
on behalf of the Company.
SECTION 1. Compensation and other Fees.
As compensation for the services provided by the Placement Agent hereunder, the Company agrees
to pay to the Placement Agent:
(a) A cash fee payable immediately upon the closing of the Placement and equal to 6.00% of the
aggregate gross proceeds raised in the Placement; and
(b) The Company also agrees to reimburse the Placement Agent’s expenses (including legal fees
and with supporting invoices/receipts) up to a maximum of $20,000. Such reimbursement shall be
payable immediately upon (but only in the event of) the closing of the Placement.
SECTION 2. REGISTRATION STATEMENT.
The Company represents and warrants to, and agrees with, the Placement Agents that:
(A) The Company has filed with the Securities and Exchange Commission (the “Commission”) a
registration statement on Form S-3 (Registration File No. 333-123968) under the Securities Act of
1933, as amended (the “Securities Act”), which became effective on April 28, 2005, for the
registration under the
GenVec, Inc. December 19, 2006
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Securities Act of the Securities. At the time of such filing, the Company
met the requirements of Form S-3 under the Securities Act. Such registration statement meets the
requirements set forth in Rule 415(a)(1)(x) under the Securities Act and complies with said Rule.
The Company will file with the Commission pursuant to
Rule 424(b) under the Securities Act, and the rules and regulations (the “Rules and
Regulations”) of the Commission promulgated thereunder, a supplement to the form of prospectus
included in such registration statement relating to the placement of the Securities and the plan of
distribution thereof and has advised the Placement Agents of all further information (financial and
other) with respect to the Company required to be set forth therein. Such registration statement,
including the exhibits thereto, as amended at the date of this Agreement, is hereinafter called the
“Registration Statement;” such prospectus in the form in which it appears in the Registration
Statement is hereinafter called the “Base Prospectus;” and the supplemented form of prospectus, in
the form in which it will be filed with the Commission pursuant to Rule 424(b) (including the Base
Prospectus as so supplemented) is hereinafter called the “Prospectus Supplement.” Any reference in
this Agreement to the Registration Statement, the Base Prospectus or the Prospectus Supplement
shall be deemed to refer to and include the documents incorporated by reference therein (the
“Incorporated Documents”) pursuant to Item 12 of Form S-3 that were filed under the Securities
Exchange Act of 1934, as amended (the “Exchange Act”), on or before the date of this Agreement, or
the issue date of the Base Prospectus or the Prospectus Supplement, as the case may be; and any
reference in this Agreement to the terms “amend,” “amendment” or “supplement” with respect to the
Registration Statement, the Base Prospectus or the Prospectus Supplement shall be deemed to refer
to and include the filing of any document under the Exchange Act after the date of this Agreement
and prior to the time at which the Company enters into the last subscription agreement for the
Placement (the “Applicable Time”), or the issue date of the Base Prospectus or the Prospectus
Supplement, as the case may be, deemed to be incorporated therein by reference. All references in
this Agreement to financial statements and schedules and other information that is “contained,”
“included,” “described,” “referenced,” “set forth” or “stated” in the Registration Statement, the
Base Prospectus or the Prospectus Supplement (and all other references of like import) shall be
deemed to mean and include all such financial statements and schedules and other information that
is or is deemed to be incorporated by reference in the Registration Statement, the Base Prospectus
or the Prospectus Supplement, as the case may be, prior to the Applicable Time. No stop order
suspending the effectiveness of the Registration Statement or the use of the Base Prospectus or the
Prospectus Supplement has been issued, and no proceeding for any such purpose is pending or has
been initiated or, to the Company’s knowledge, is threatened by the Commission. For purposes of
this Agreement, “issuer free writing prospectus” has the meaning set forth in Rule 405 under the
Securities Act and the “Time of Sale Prospectus” means the preliminary prospectus, if any, together
with the issuer free writing prospectuses, if any, used in connection with the Placement, including
any documents incorporated by reference therein.
(B) The Registration Statement (and any further documents to be filed with the Commission
prior to the Applicable Time) contains all exhibits and schedules as required by the Securities
Act. Each of the Registration Statement and any post-effective amendment thereto, at the time it
became effective, complied in all material respects with the Securities Act and the Exchange Act
and the applicable Rules and Regulations and did not and, as amended or supplemented, if
applicable, will not as of the Applicable Time, contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to make the statements
therein not misleading. The Base Prospectus, the Time of Sale Prospectus, if any, and the
Prospectus Supplement, each as of its respective date, complies, or will comply, as the case may
be, in all material respects with the Securities Act and the Exchange Act and the applicable Rules
and Regulations. Each of the Base Prospectus, the Time of Sale Prospectus, if any, and the
Prospectus Supplement, as amended or supplemented, did not and will not, as the case may be,
contain as of the date thereof any untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein, in light of the circumstances under which
they were made, not misleading. The Incorporated Documents, when they were filed with the
Commission, conformed in all material respects to the requirements of the Exchange Act and the
applicable Rules and Regulations, and none of such documents, when they were filed with the
Commission and taken together with the other information in the
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Registration Statement, contained
any untrue statement of a material fact or omitted to state a material fact necessary to make the
statements therein (with respect to
Incorporated Documents incorporated by reference in the Base Prospectus or Prospectus
Supplement), in light of the circumstances under which they were made not misleading; and any
further documents so filed and incorporated by reference in the Base Prospectus prior to the
Applicable Time, the Time of Sale Prospectus, if any, or Prospectus Supplement, when such documents
are filed with the Commission and taken together with the other information in the Registration
Statement, will conform in all material respects to the requirements of the Exchange Act and the
applicable Rules and Regulations, as applicable, and will not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the statements therein, in light
of the circumstances under which they were made, not misleading. No post-effective amendment to the
Registration Statement reflecting any facts or events arising after the date thereof that
represent, individually or in the aggregate, a fundamental change in the information set forth
therein is required to be filed with the Commission. There are no documents required to be filed
with the Commission in connection with the transaction contemplated hereby that (x) have not been
filed as required pursuant to the Securities Act or (y) will not be filed within the requisite time
period. There are no contracts or other documents required to be described in the Base Prospectus,
the Time of Sale Prospectus, if any, or Prospectus Supplement, or to be filed as exhibits or
schedules to the Registration Statement, that have not been described or filed as required.
(C) The Company is eligible to use issuer free writing prospectuses in connection with the
Placement pursuant to Rules 164 and 433 under the Securities Act. Any issuer free writing
prospectus that the Company is required to file pursuant to Rule 433(d) under the Securities Act
has been, or will be, filed with the Commission in accordance with the requirements of the
Securities Act and the applicable rules and regulations of the Commission thereunder. Each issuer
free writing prospectus that the Company has filed, or is required to file, pursuant to Rule 433(d)
under the Securities Act or that was prepared by or on behalf of or used by the Company complies or
will comply in all material respects with the requirements of the Securities Act and the applicable
rules and regulations of the Commission thereunder. The Company will not, without the prior
consent of the Placement Agents, prepare, use or refer to, any issuer free writing prospectus.
(D) The Company has delivered, or will as promptly as practicable deliver upon request, to the
Placement Agents complete conformed copies of the Registration Statement and of each consent and
certificate of experts, as applicable, filed as a part thereof, and conformed copies of the
Registration Statement (without exhibits), the Base Prospectus, the Time of Sale Prospectus, if
any, and the Prospectus Supplement, as amended or supplemented, in such quantities and at such
places as the Placement Agents reasonably request. Neither the Company nor any of its directors
and officers has distributed and none of them will distribute, prior to the Closing Date, any
offering material in connection with the offering and sale of the Securities other than the Base
Prospectus, the Time of Sale Prospectus, if any, the Prospectus Supplement, the Registration
Statement, copies of the documents incorporated by reference therein and any other materials
permitted by the Securities Act.
SECTION 3. REPRESENTATIONS AND WARRANTIES. Except as set forth in the Prospectus
Supplement or in the Disclosure Schedule attached hereto, and any amendment or supplement thereto,
the Company hereby makes the representations and warranties set forth below to the Placement
Agents:
(A) Organization and Qualification. The Company does not own, directly or indirectly,
any subsidiaries. The Company is an entity duly incorporated or otherwise organized, validly
existing and in good standing under the laws of the jurisdiction of its incorporation, with the
requisite power and authority to own and use its properties and assets and to carry on its business
as currently conducted. The Company is not in violation or default of any of the provisions of its
certificate of incorporation or bylaws. The Company is duly qualified to conduct business and is
in good standing as a foreign corporation or other entity in each jurisdiction in which the nature
of the business conducted or property owned by it makes such qualification necessary, except where
the failure to be so qualified or in good standing, as the case may be, would not have (i) a
material adverse effect on
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the legality, validity or enforceability of any Transaction Document,
(ii) a material adverse effect on the results of
operations, assets, business or condition (financial or otherwise) of the Company, or (iii) a
material adverse effect on the Company’s ability to perform in any material respect on a timely
basis its obligations under any Transaction Document (any of (i), (ii) or (iii), a “Material
Adverse Effect”) and no “Proceeding” (which for purposes of this Agreement shall mean
any action, claim, suit, investigation or proceeding (including, without limitation, an
investigation or partial proceeding, such as a deposition), whether commenced or threatened) has
been instituted in any such jurisdiction revoking, limiting or curtailing or seeking to revoke,
limit or curtail such power and authority or qualification.
(B) Authorization; Enforcement. The Company has the requisite corporate power and
authority to enter into and to consummate the transactions contemplated by each of the Transaction
Documents and otherwise to carry out its obligations hereunder and thereunder. The execution and
delivery of each of the Transaction Documents by the Company and the consummation by it of the
transactions contemplated thereby have been duly authorized by all necessary action on the part of
the Company and no further action is required by the Company, its board of directors or its
stockholders in connection therewith other than in connection with the “Required Approvals”
(as defined in subsection 3(D) below). Each Transaction Document has been (or upon delivery will
have been) duly executed by the Company and, when delivered in accordance with the terms hereof and
thereof, will constitute the valid and binding obligation of the Company enforceable against the
Company in accordance with its terms except (i) as limited by general equitable principles and
applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application
affecting enforcement of creditors’ rights generally, (ii) as limited by laws relating to the
availability of specific performance, injunctive relief or other equitable remedies and (iii)
insofar as indemnification and contribution provisions may be limited by applicable law.
(C) No Conflicts. The execution, delivery and performance of the Transaction
Documents by the Company, the issuance and sale of the Securities and the consummation by the
Company of the other transactions contemplated hereby and thereby do not and will not (i) conflict
with or violate any provision of the Company’s certificate or articles of incorporation, bylaws or
other organizational or charter documents, or (ii) conflict with, or constitute a default (or an
event that with notice or lapse of time or both would become a default) under, result in the
creation of any Lien upon any of the properties or assets of the Company, or give to others any
rights of termination, amendment, acceleration or cancellation (with or without notice, lapse of
time or both) of, any agreement, credit facility, debt or other instrument (evidencing a Company
debt or otherwise) or other understanding to which the Company is a party or by which any property
or asset of the Company is bound or affected, or (iii) subject to the Required Approvals, conflict
with or result in a violation of any law, rule, regulation, order, judgment, injunction, decree or
other restriction of any court or governmental authority to which the Company is subject (including
federal and state securities laws and regulations), or by which any property or asset of the
Company is bound or affected; except in the case of each of clauses (ii) and (iii), such as would
not have a Material Adverse Effect.
(D) Filings, Consents and Approvals. The Company is not required to obtain any
consent, waiver, authorization or order of, give any notice to, or make any filing or registration
with, any court or other federal, state, local or other governmental authority or other
“Person” (defined as an individual or corporation, partnership, trust, incorporated or
unincorporated association, joint venture, limited liability company, joint stock company,
government (or an agency or subdivision thereof) or other entity of any kind, including, without
limitation, any Trading Market) in connection with the execution, delivery and performance by the
Company of the Transaction Documents, other than such filings as are required to be made under
applicable Federal and state securities laws or with The NASDAQ Stock Market (collectively, the
“Required Approvals”).
(E) Issuance of the Securities; Registration. The Securities are duly authorized and,
when issued and paid for in accordance with the applicable Transaction Documents, the Shares and
the shares of Common Stock issuable upon exercise of the warrants, if any, will be duly and validly
issued, fully paid and nonassessable, free and clear of all “Liens” (which for purposes of this
Agreement shall mean a lien, charge, security interest,
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encumbrance, right of first refusal,
preemptive right or other restriction) imposed by the Company other than restrictions on transfer
provided for in the Transaction Documents. The Company has reserved from its duly authorized
capital stock the maximum number of shares of Common Stock issuable pursuant to the Transaction
Documents. The Securities are being issued pursuant to the Registration Statement and the issuance
of the Securities has been registered by the Company under the Securities Act. The Registration
Statement is effective and available for the issuance of the Securities thereunder and the Company
has not received any notice that the Commission has issued or intends to issue a stop-order with
respect to the Registration Statement or that the Commission otherwise has suspended or withdrawn
the effectiveness of the Registration Statement, either temporarily or permanently, or intends or
has threatened in writing to do so. The “Plan of Distribution” section under the Registration
Statement permits the issuance and sale of the Securities hereunder. Upon receipt of the
Securities, the Purchasers will have good and marketable title to such Securities and the Shares
will be freely tradable on the “Trading Market” (which, for purposes of this Agreement
shall mean The NASDAQ Global Market of The NASDAQ Stock Market).
(F) Capitalization. The authorized capitalization of the Company is as set forth in
or as incorporated by reference into the Registration Statement, the Base Prospectus or the
Prospectus Supplement. The Company has not issued any capital stock since its most recently filed
periodic report under the Exchange Act, other than pursuant to the exercise of employee stock
options under the Company’s stock option plans (“Employee Options”), the issuance of shares
of Common Stock to employees pursuant to the Company’s employee stock purchase plan and pursuant to
the conversion or exercise of securities exercisable, exchangeable or convertible into Common Stock
(“Common Stock Equivalents”). No Person has any right of first refusal, preemptive right,
right of participation, or any similar right to participate in the transactions contemplated by the
Transaction Documents. Except as a result of the purchase and sale of the Securities, the Employee
Options or the issuance of shares of Common Stock to employees pursuant to the Company’s employee
stock purchase plan, there are no outstanding options, warrants, script rights to subscribe to,
calls or commitments of any character whatsoever relating to, or securities, rights or obligations
convertible into or exercisable or exchangeable for, or giving any Person any right to subscribe
for or acquire, any shares of Common Stock, or contracts, commitments, understandings or
arrangements by which the Company is or may become bound to issue additional shares of Common Stock
or Common Stock Equivalents. The issuance and sale of the Securities will not obligate the Company
to issue shares of Common Stock or other securities to any Person (other than the Purchasers) and
will not result in a right of any holder of Company securities to adjust the exercise, conversion,
exchange or reset price under such securities. All of the outstanding shares of capital stock of
the Company are validly issued, fully paid and nonassessable, have been issued in compliance with
all federal and state securities laws, and none of such outstanding shares was issued in violation
of any preemptive rights or similar rights to subscribe for or purchase securities. No further
approval or authorization of any stockholder, the Board of Directors of the Company or others is
required for the issuance and sale of the Securities, except for final approval by the Board of
Directors or a pricing committee thereof of the issue price of the Shares. Except as disclosed in
the SEC Reports, there are no stockholders agreements, voting agreements or other similar
agreements with respect to the Company’s capital stock to which the Company is a party or, to the
knowledge of the Company, between or among any of the Company’s stockholders.
(G) SEC Reports; Financial Statements. The Company has complied in all material
respects with requirements to file all reports, schedules, forms, statements and other documents
required to be filed by it under the Securities Act and the Exchange Act, including pursuant to
Section 13(a) or 15(d) thereof, for the two years preceding the date hereof (the foregoing
materials, including the exhibits thereto and documents incorporated by reference therein, being
collectively referred to herein as the “SEC Reports”) on a timely basis or has received a
valid extension of such time of filing and has filed any such SEC Reports prior to the expiration
of any such extension. As of their respective dates, the SEC Reports complied in all material
respects with the requirements of the Securities Act and the Exchange Act and the rules and
regulations of the Commission promulgated thereunder, and none of the SEC Reports, when filed,
contained any untrue statement of a material fact or omitted to state a material fact required to
be stated therein or necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. The financial statements of the
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Company included in the SEC Reports comply in all material respects with applicable accounting requirements
and the rules and regulations of the
Commission with respect thereto as in effect at the time of filing. Such financial statements
have been prepared in accordance with United States generally accepted accounting principles
applied on a consistent basis during the periods involved (“GAAP”), except as may be
otherwise specified in such financial statements or the notes thereto and except that unaudited
financial statements may not contain all footnotes required by GAAP, and fairly present in all
material respects the financial position of the Company as of and for the dates thereof and the
results of operations and cash flows for the periods then ended, subject, in the case of unaudited
statements, to normal, immaterial, year-end audit adjustments.
(H) Material Changes; Undisclosed Events, Liabilities or Developments. Since the date
of the latest audited financial statements included within the SEC Reports, except as specifically
disclosed in the SEC Reports or the Prospectus Supplement, (i) there has been no event, occurrence
or development that has had or that would reasonably be expected to result in a Material Adverse
Effect, (ii) the Company has not incurred any liabilities (contingent or otherwise) other than (A)
trade payables and accrued expenses incurred in the ordinary course of business consistent with
past practice and (B) liabilities not required to be reflected in the Company’s financial
statements pursuant to GAAP or required to be disclosed in filings made with the Commission, (iii)
the Company has not altered its method of accounting, (iv) the Company has not declared or made any
dividend or distribution of cash or other property to its stockholders or purchased, redeemed or
made any agreements to purchase or redeem any shares of its capital stock and (v) the Company has
not issued any equity securities to any officer, director or “Affiliate” (defined as any
Person that, directly or indirectly through one or more intermediaries, controls or is controlled
by or is under common control with a Person, as such terms are used in and construed under Rule 144
under the Securities Act), except pursuant to existing Company stock option plans. Except for the
issuance of the Securities contemplated by this Agreement or as set forth on Schedule 3(H), no
event, liability or development has occurred or exists with respect to the Company or its business,
properties, operations or financial condition, that would be required to be disclosed by the
Company under applicable securities laws at the time this representation is made that has not been
publicly disclosed one Trading Day prior to the date that this representation is made.
(I) Litigation. There is no action, suit, inquiry, notice of violation, Proceeding or
investigation pending or, to the knowledge of the Company, threatened against or affecting the
Company or any of its properties before or by any court, arbitrator, governmental or administrative
agency or regulatory authority (federal, state, county, local or foreign) (collectively, an
“Action”) that (i) adversely affects or challenges the legality, validity or enforceability
of any of the Transaction Documents or the Securities or (ii) would, if there were an unfavorable
decision, reasonably be expected to result in a Material Adverse Effect. Neither the Company nor
any director or officer thereof, is or has been the subject of any Action involving a claim of
violation of or liability under federal or state securities laws or a claim of breach of fiduciary
duty. There has not been, and to the knowledge of the Company, there is not pending or
contemplated, any investigation by the Commission involving the Company or any current or former
director or officer of the Company. The Commission has not issued any stop order or other order
suspending the effectiveness of any registration statement filed by the Company under the Exchange
Act or the Securities Act.
(J) Labor Relations. No material labor dispute exists or, to the knowledge of the
Company, is imminent with respect to any of the employees of the Company that would result in a
Material Adverse Effect. None of the Company’s employees is a member of a union that relates to
such employee’s relationship with the Company, and the Company is not a party to a collective
bargaining agreement, and the Company believes that its relationships with its employees are good.
No executive officer, to the knowledge of the Company, is, or is now expected to be, in violation
of any material term of any employment contract, confidentiality, disclosure or proprietary
information agreement or non-competition agreement, or any other contract or agreement or any
restrictive covenant, and the continued employment of each such executive officer does not subject
the Company to any liability with respect to any of the foregoing matters. The Company is in
compliance with all U.S. federal, state, local and foreign laws and regulations relating to
employment and employment practices, terms and
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conditions of employment and wages and hours, except
where the failure to be in compliance would not, individually or in the aggregate, have a Material
Adverse Effect.
(K) Compliance. The Company (i) is not in default under or in violation of (and no
event has occurred that has not been waived that, with notice or lapse of time or both, would
result in a default by the Company under), nor has the Company received notice of a claim that it
is in default under or that it is in violation of, any indenture, loan or credit agreement or any
other agreement or instrument for indebtedness for money borrowed to which it is a party or by
which it or any of its properties is bound (whether or not such default or violation has been
waived), (ii) is not in violation of any order of any court, arbitrator or governmental body, or
(iii) is not or has not been in violation of any statute, rule or regulation of any governmental
authority, including without limitation all foreign, federal, state and local laws applicable to
its business and all such laws that affect the environment, except in each case as would not have a
Material Adverse Effect.
(L) Regulatory Permits. The Company possesses adequate certificates, authorizations
and permits issued by the appropriate federal, state, local or foreign regulatory authorities
necessary to conduct their respective businesses as described in the SEC Reports, except where the
failure to possess such permits would not have result in a Material Adverse Effect (“Material
Permits”), and the Company has not received any notice of proceedings relating to the
revocation or modification of any Material Permit.
(M) Title to Assets. The Company does not own any real property. Any real property
and facilities held under lease by the Company are held by it under valid, subsisting and
enforceable leases of which the Company is in material compliance.
(N) Patents and Trademarks. The Company has, or has rights to use, all patents,
patent applications, trademarks, trademark applications, service marks, trade names, trade secrets,
inventions, copyrights, licenses and other similar intellectual property currently employed by them
in connection with the business currently operated by them, that are necessary for use in the
conduct of businesses as described in the SEC Reports except where the failure to so have would not
have a Material Adverse Effect (collectively, the “Intellectual Property Rights”). The
Company has not received any written notice that the Intellectual Property Rights used by the
Company violates or infringes upon the rights of any Person.
(O) Insurance. The Company is insured by insurers of recognized financial
responsibility against such losses and risks and in such amounts as are prudent and customary in
the businesses in which the Company is engaged, including, but not limited to, directors and
officers insurance coverage. The Company has no reason to believe that it will not be able to
renew its existing insurance coverage as and when such coverage expires or to obtain similar
coverage from similar insurers as may be necessary to continue its business without a significant
increase in cost.
(P) Transactions With Affiliates and Employees. Except as set forth in the SEC
Reports, none of the officers or directors of the Company and, to the knowledge of the Company,
none of the employees of the Company
is presently a party to any transaction with the Company (other than for services as
employees, officers and directors), including any contract, agreement or other arrangement
providing for the furnishing of services to or by, providing for rental of real or personal
property to or from, or otherwise requiring payments to or from any officer, director or such
employee or, to the knowledge of the Company, any entity in which any officer, director, or any
such employee has a substantial interest or is an officer, director, trustee or partner, other than
(i) for payment of salary or consulting fees for services rendered, (ii) reimbursement for expenses
incurred on behalf of the Company and (iii) for other employee benefits, including awards under any
equity incentive plan of the Company.
(Q) ▇▇▇▇▇▇▇▇-▇▇▇▇▇. The Company is in material compliance with all provisions of the
▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002 that are applicable to it as of the date hereof and of the closing date
of the Placement.
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(R) Certain Fees. Except as otherwise provided in this Agreement, no brokerage or
finder’s fees or commissions are or will be payable by the Company to any broker, financial advisor
or consultant, finder, placement agent, investment banker, bank or other Person with respect to the
transactions contemplated by the Transaction Documents.
(S) Trading Market Rules. The issuance and sale of the Securities hereunder does not
contravene the rules and regulations of the Trading Market.
(T) Investment Company. The Company is not, and is not an Affiliate of, and
immediately after receipt of payment for the Securities, will not be or be an Affiliate of, an
“investment company” within the meaning of the Investment Company Act of 1940, as amended.
(U) Registration Rights. No Person has any right to cause the Company to effect the
registration under the Securities Act of any securities of the Company, which rights are currently
not satisfied.
(V) Listing and Maintenance Requirements. The Company’s Common Stock is registered
pursuant to Section 12(b) or 12(g) of the Exchange Act, and the Company has taken no action
designed to, or which to its knowledge is likely to have the effect of, terminating the
registration of the Common Stock under the Exchange Act nor has the Company received any
notification that the Commission is contemplating terminating such registration. The Company has
not, in the 12 months preceding the date hereof, received notice from any Trading Market on which
the Common Stock is or has been listed or quoted to the effect that the Company is not in
compliance with the listing or maintenance requirements of such Trading Market. The Company is,
and has no reason to believe that it will not in the foreseeable future continue to be, in
compliance with all such listing and maintenance requirements.
(W) Intentionally Reserved.
(X) Absence of Certain Proceedings. The Company has no knowledge of any facts or
circumstances that lead it to believe that it will file for reorganization or liquidation under the
bankruptcy or reorganization laws of any jurisdiction within one year from the Closing Date.
(Y) Tax Status. Except for matters that would not, individually or in the aggregate,
have or reasonably be expected to result in a Material Adverse Effect, the Company has filed all
necessary federal, state and foreign income and franchise tax returns and has paid or accrued all
taxes shown as due thereon, and the Company has no knowledge of a tax deficiency that has been
asserted or threatened against the Company.
(Z) Foreign Corrupt Practices. To the knowledge of the Company, neither the Company
nor any agent or other person acting on behalf of the Company, has (i) directly or indirectly, used
any funds for unlawful contributions, gifts, entertainment or other unlawful expenses related to
foreign or domestic political activity, (ii) made any unlawful payment to foreign or domestic
government officials or employees or to any foreign or domestic
political parties or campaigns from corporate funds, (iii) failed to disclose fully any
contribution made by the Company (or made by any person acting on its behalf of which the Company
is aware) which is in violation of law, or (iv) violated in any material respect any provision of
the Foreign Corrupt Practices Act of 1977, as amended.
(AA) Accountants. To the knowledge of the Company, KPMG LLP, who the Company expects
will express their opinion with respect to the financial statements to be included in the Company’s
next Annual Report on Form 10-K, are a registered public accounting firm as required by the
Securities Act.
(BB) Regulation M Compliance. The Company has not, and to its knowledge no one acting
on its behalf has, (i) taken, directly or indirectly, any action designed to cause or to result in
the stabilization or manipulation of the price of any security of the Company to facilitate the
sale or resale of any of the Securities,
GenVec, Inc. December 19, 2006
Page 9
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(ii) sold, bid for, purchased, or, paid any compensation
for soliciting purchases of, any of the Securities (other than for the placement agents’ placement
of the Securities), or (iii) paid or agreed to pay to any person any compensation for soliciting
another to purchase any other securities of the Company.
(CC) Approvals. The issuance and listing on The Nasdaq Global Market of the Shares
requires no further approvals, including but not limited to, the approval of shareholders.
(DD) NASD Affiliations. There are no affiliations with any NASD member firm among the
Company’s officers, directors or, to the knowledge of the Company, any five percent (5%) or greater
stockholder of the Company, except as set forth in the Base Prospectus.
SECTION 4. INDEMNIFICATION. The Company agrees to the indemnification and
other agreements set forth in the Indemnification Provisions (the “Indemnification”)
attached hereto as Addendum A, the provisions of which are incorporated herein by reference and
shall survive the termination of this Agreement.
SECTION 5. ENGAGEMENT TERM. The Placement Agent’s engagement hereunder will be for
the period of 60 days. The engagement may be terminated by either the Company or the Placement
Agent at any time upon 10 days’ written notice. Notwithstanding anything to the contrary contained
herein, the provisions concerning confidentiality, indemnification, contribution and the Company’s
obligations to pay fees and reimburse expenses contained herein and the Company’s obligations
contained in the Indemnification Provisions will survive any expiration or termination of this
Agreement. The Placement Agent agrees not to use any confidential information concerning the
Company provided to it by the Company for any purposes other than those contemplated under this
Agreement.
SECTION 6. PLACEMENT AGENT’S INFORMATION. The Company agrees that any information
or advice rendered by the Placement Agent in connection with this engagement is for the
confidential use of the Company only in their evaluation of the Placement and, except as otherwise
required by law, the Company will not disclose or otherwise refer to the advice or information in
any manner without the Placement Agent’s prior written consent.
SECTION 7. NO FIDUCIARY RELATIONSHIP. This Agreement does not create, and shall
not be construed as creating rights enforceable by any person or entity not a party hereto, except
those entitled hereto by virtue of the Indemnification Provisions hereof. The Company acknowledges
and agrees that the Placement Agents is not and shall not be construed as, a fiduciary of the
Company and shall have no duties or liabilities to the equity holders or the creditors of the
Company or any other person by virtue of this Agreement or the retention of the Placement Agent
hereunder, all of which are hereby expressly waived.
SECTION 8. CLOSING. The obligations of the Placement Agent is 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 their
obligations hereunder, and to each of the following additional terms and conditions:
(A) No stop order suspending the effectiveness of the Registration Statement shall have been
issued and no proceedings for that purpose shall have been initiated or threatened by the
Commission, and any request for additional information on the part of the Commission (to be
included in the Registration Statement, the Base Prospectus or the Prospectus Supplement or
otherwise) shall have been complied with to the reasonable satisfaction of the Placement Agent.
Any filings required to be made by the Company in shall have been timely filed with the Commission.
(B) The Placement Agent shall not have discovered and disclosed to the Company on or prior to
the Closing Date that the Registration Statement, the Base Prospectus or the Prospectus Supplement
or any
GenVec, Inc. December 19, 2006
Page 10
Page 10
amendment or supplement thereto contains an untrue statement of a fact that, in the opinion
of counsel for the Placement Agent, is material or omits to state any fact that, 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, and the Company shall not have filed a further Prospectus
Supplement that resolves such objections.
(C) All corporate proceedings and other legal matters incident to the authorization, form,
execution, delivery and validity of each of this Agreement, the Securities, the Registration
Statement, the Base Prospectus and the Prospectus Supplement and all other legal matters relating
to this Agreement and the transactions contemplated hereby shall be reasonably satisfactory in all
material respects to counsel for the Placement Agent, and the Company shall have furnished to such
counsel all documents and information that they may reasonably request to enable them to pass upon
such matters.
(D) The Placement Agent shall have received from outside counsel to the Company such counsel’s
written opinion, addressed to the Placement Agent (and to the extent required by any agreement with
the Purchasers, the Purchasers) dated as of the Closing Date, in form and substance reasonably
satisfactory to the Placement Agent.
(E) The Company shall not have sustained since the date of the latest audited financial
statements included or incorporated by reference in the Base 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 Base Prospectus 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
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, otherwise than as set forth in or contemplated by the Base Prospectus or the
Prospectus Supplement, the effect of which, in any such case described in clause (i) or (ii), is,
in the judgment of the Placement Agent, so material and adverse as to make it impracticable or
inadvisable to proceed with the sale or delivery of the Securities on the terms and in the manner
contemplated by the Base Prospectus, the Time of Sale Prospectus, if any, and the Prospectus
Supplement.
(F) The Common Stock is 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 Placement Agent. The Company
shall have taken no action designed to, or likely to have the effect of terminating the
registration of the Common Stock under the Exchange Act or delisting or suspending from trading the
Common Stock from The NASDAQ
Global Market, nor has the Company received any information suggesting that the Commission or
The NASDAQ Global Market is contemplating terminating such registration or listing.
(G) 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 Stock 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 in which it is not currently engaged, the subject
of an act of terrorism, there shall have been an escalation in hostilities involving the United
States, or there shall have been a declaration of a national emergency or war by the United States,
or (iv) there shall have occurred 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 sole judgment of the Placement Agent, impracticable
or inadvisable to proceed with the sale
GenVec, Inc. December 19, 2006
Page 11
Page 11
or delivery of the Securities on the terms and in the
manner contemplated by the Base Prospectus and the Prospectus Supplement.
(H) 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 that would, as of the Closing Date,
prevent the issuance or sale of the Securities 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 that would prevent the issuance or sale of the Securities
or materially and adversely affect or potentially and adversely affect the business or operations
of the Company.
(I) The Company shall have prepared and filed with the Commission a Current Report on Form 8-K
with respect to the Placement, including as an exhibit thereto this Agreement.
(J) The Company shall have entered into subscription agreements with each of the Purchasers
and such agreements shall be in full force and effect and shall contain representations and
warranties of the Company as agreed between the Company and the Purchasers.
(K) If required in the reasonable judgment of the Placement Agent, the Company shall make or
authorize the Placement Agent’s counsel to make on the Company’s behalf, an Issuer Filing with the
NASDR, Inc. Corporate Financing Department pursuant to NASD Rule 2710 with respect to the
Registration Statement and pay all filing fees required in connection therewith, and the NASDR
shall have issued a “no objections” letter prior to the Closing Date.
All opinions, letters, evidence and certificates mentioned above or elsewhere in this
Agreement shall be deemed to be in compliance with the provisions hereof only if they are in form
and substance reasonably satisfactory to counsel for the Placement Agent.
SECTION 9. Governing Law. This Agreement will be governed by, and construed in
accordance with, the laws of the State of New York applicable to agreements made and to be
performed entirely in such State. This Agreement may not be assigned by either party without the
prior written consent of the other party. This Agreement shall be binding upon and inure to the
benefit of the parties hereto, and their respective successors and permitted assigns. Any right to
trial by jury with respect to any dispute arising under this Agreement or any transaction or
conduct in connection herewith is waived. Any dispute arising under this Agreement may
be brought into the courts of the State of New York or into the Federal Court located in New York,
New York and, by execution and delivery of this Agreement, the Company hereby accepts for itself
and in respect of its property, generally and unconditionally, the jurisdiction of aforesaid
courts. Each party hereto hereby irrevocably waives personal service of process and consents to
process being served in any such suit, action or proceeding by delivering a copy thereof via
overnight delivery (with evidence of delivery) to such party at the address in effect for notices
to it under this Agreement and agrees that such service shall constitute good and sufficient
service of process and notice thereof. Nothing contained herein shall be deemed to limit in any
way any right to serve process in any manner permitted by law. If either party shall commence an
action or proceeding to enforce any provisions of a Transaction Document, then the prevailing party
in such action or proceeding shall be reimbursed by the other party for its attorneys fees and
other costs and expenses incurred with the investigation, preparation and prosecution of such
action or proceeding.
SECTION 10. Entire Agreement/Misc. This Agreement (including the attached
Indemnification Provisions) embodies the entire agreement and understanding between the parties
hereto and supersedes all prior agreements and understandings relating to the subject matter
hereof. If any provision of this Agreement is determined to be invalid or unenforceable in any
respect, such determination will not affect such provision in any other respect or any other
provision of this Agreement, which will remain in full force and effect.
GenVec, Inc. December 19, 2006
Page 12
Page 12
This Agreement may not be
amended or otherwise modified or waived except by an instrument in writing signed by both the
Placement Agent and the Company. The representations, warranties, agreements and covenants
contained herein shall survive the closing of the Placement and delivery of the Securities for a
period of two years. This Agreement may be executed in two or more counterparts, all of which when
taken together shall be considered one and the same agreement and shall become effective when
counterparts have been signed by each party and delivered to the other party, it being understood
that both parties need not sign the same counterpart. In the event that any signature is delivered
by facsimile transmission or a .pdf format file, such signature shall create a valid and binding
obligation of the party executing (or on whose behalf such signature is executed) with the same
force and effect as if such facsimile signature page were an original thereof.
SECTION 11. Notices. Any and all notices or other communications or deliveries
required or permitted to be provided hereunder shall be in writing and shall be deemed given and
effective on the earliest of (a) the date of transmission, if such notice or communication is
delivered via facsimile at the facsimile number specified on the signature pages attached hereto
prior to 6:30 p.m. (New York City time) on a business day, (b) the next business day after the date
of transmission, if such notice or communication is delivered via facsimile at the facsimile number
on the signature pages attached hereto on a day that is not a business day or later than 6:30 p.m.
(New York City time) on any business day, (c) the business day following the date of mailing, if
sent by U.S. nationally recognized overnight courier service, or (d) upon actual receipt by the
party to whom such notice is required to be given. The address for such notices and communications
shall be as set forth on the signature pages hereto.
GenVec, Inc. December 19, 2006
Page 13
Page 13
Please confirm that the foregoing correctly sets forth our agreement by signing and returning to
R&R the enclosed copy of this Agreement.
| Very truly yours, | ||||||
| ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, LLC | ||||||
| By: | ||||||
| Title: | ||||||
| Address for notice: | ||||||
| ▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ | ||||||
| New York, NY, 10020 | ||||||
Accepted and Agreed to as of
the date first written above:
the date first written above:
| GENVEC, INC. | ||||
By: |
||||
Chief Financial Officer, Treasurer and Corporate Secretary: |
||||
Address for notice:
▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇,▇▇ ▇▇▇▇▇:
▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇,▇▇ ▇▇▇▇▇:
GenVec, Inc.
Indemnification Provisions
December 19, 2006
Indemnification Provisions
December 19, 2006
ADDENDUM A
INDEMNIFICATION PROVISIONS
In connection with the engagement of ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, LLC, the placement agent
(“R&R”), (the “Placement Agent”) by GenVec, Inc. (the “Company”) pursuant
to a letter agreement dated December 19, 2006, between the Company and the Placement Agent, as it
may be amended from time to time in writing (the “Agreement”), the Company hereby agrees as
follows:
| 1. | To the extent permitted by law, the Company will indemnify the Placement Agent and its respective affiliates, stockholders, directors, officers, employees and controlling persons (within the meaning of Section 15 of the Securities Act of 1933, as amended, or Section 20 of the Securities Exchange Act of 1934) against all losses, claims, damages, expenses and liabilities, as the same are incurred (including the reasonable fees and expenses of counsel), relating to, or arising out of, the Placement Agent’s activities pursuant to the Agreement, except to the extent that any losses, claims, damages, expenses or liabilities (or actions in respect thereof) are found in a final judgment by a court of law to have resulted primarily and directly from Placement Agent’s willful misconduct or gross negligence in performing the services described herein. | |
| 2. | Promptly after receipt by Placement Agent of notice of any claim or the commencement of any action or proceeding with respect to which Placement Agent is entitled to indemnity hereunder, Placement Agent will notify the Company in writing of such claim or of the commencement of such action or proceeding, and the Company will assume the defense of such action or proceeding and will employ counsel reasonably satisfactory to Placement Agent and will pay the fees and expenses of such counsel. Notwithstanding the preceding sentence, the Placement Agent will be entitled to employ counsel separate from counsel for the Company and from any other party in such action if counsel for Placement Agent reasonably determines in writing that it would be inappropriate under the applicable rules of professional responsibility for the same counsel to represent both the Company and the Placement Agent. In such event, the reasonable fees and disbursements of no more than one such separate counsel will be paid by the Company. The Company will have the exclusive right to settle the claim or proceeding provided that the Company will not settle any such claim, action or proceeding without the prior written consent of the Placement Agent, which will not be unreasonably withheld. | |
| 3. | The Company agrees to notify the Placement Agent promptly of the assertion against it or any other person of any claim or the commencement of any action or proceeding relating to a transaction contemplated by the Agreement. | |
| 4. | If for any reason the foregoing indemnity is unavailable to the Placement Agent, or insufficient to hold the Placement Agent harmless, then the Company shall contribute to the amount paid or payable by the Placement Agent as a result of such losses, claims, damages or liabilities in such proportion as is appropriate to reflect not only the relative benefits received by the Company on the one hand and the Placement Agent on the other, but also the relative fault of the Company on the one hand and the Placement Agent on the other that resulted in such losses, claims, damages or liabilities, as well as any relevant equitable considerations. The amounts paid or payable by a party in respect of losses, claims, damages and liabilities referred to above shall be deemed to include any legal or other fees and expenses incurred in defending any litigation, proceeding or other action or claim. Notwithstanding the provisions hereof, the Placement Agent’s share of the liability hereunder shall not be in excess of the amount of fees actually received, or to be received, by the Placement Agent under the Agreement (excluding any amounts received as reimbursement of expenses incurred by the Placement Agent). |
GenVec, Inc.
December 19, 2006
Indemnification Provisions
December 19, 2006
Indemnification Provisions
| 5. | These Indemnification Provisions shall remain in full force and effect whether or not the transaction contemplated by the Agreement is completed and shall survive the termination of the Agreement, and shall be in addition to any liability that the Company might otherwise have to any indemnified party under the Agreement or otherwise. |
| ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, LLC | ||||||
| By: | ||||||
President |
||||||
Accepted and Agreed to as of
the date first written above:
the date first written above:
| GENVEC, INC. | ||||
By: |
||||
| Chief Financial Officer, Treasurer, Secretary | ||||