Exhibit 1.1
3,379,000 Shares
VICAL INCORPORATED
Shares of
Common Stock
($.01 par value)
PLACEMENT AGENT AGREEMENT
March 23, 2004
SG COWEN
SECURITIES CORPORATION
1221 Avenue of the Americas
New York, New York 10020
Dear Sirs:
Vical
Incorporated, a Delaware corporation (the “Company”), proposes to sell to the
Purchasers (defined below), 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”), an aggregate of 3,379,000
shares of Common Stock, $.01 par value (the “Common Stock”), of the
Company. The aggregate of 3,379,000 shares
so proposed to be sold is hereinafter referred to as the “Stock.” The Company hereby
confirms its agreement with SG Cowen Securities Corporation (“SG Cowen”) as follows (certain terms used
herein are defined in Section 13 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 SG Cowen
to act as its exclusive agent (in such capacity, the “Placement Agent”) to solicit offers for the
purchase of all or part of the Stock from the Company in connection with the
proposed offering of the Stock (the “Offering”).
So long as this Agreement shall remain in effect, the Company shall not,
without the prior consent of the Placement Agent, solicit or accept offers to
purchase the Stock otherwise than through the Placement Agent.
(b) The Placement Agent agrees, as agent
of the Company, to use its commercially reasonable efforts to solicit offers to
purchase the Stock from the Company on the terms and subject to the conditions
set forth in the Base Prospectus (as defined below) and the Prospectus
Supplement (as defined below). The Placement Agent shall make commercially
reasonable efforts to assist the Company in obtaining performance by each
Purchaser whose offer to purchase Stock has been solicited by the Placement
Agent and accepted by the Company, but the Placement Agent shall not, except as
otherwise provided in this Agreement, 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 Agent be obligated to purchase any Stock for its own account and, in
soliciting purchases of Stock, the Placement Agent shall act solely as the
Company’s agent and not as principal. Notwithstanding the foregoing and except
as otherwise provided in Section 1(c), it is understood and agreed that
the Placement Agent (or its affiliates) may, solely at its discretion and
without any obligation to do so, purchase Stock as principal, provided that the
fact that the Placement Agent (or its affiliate) is a Purchaser is disclosed to
the Company and the Company approves such purchase of Stock in accordance with Section
1(c).
(c) Subject to the provisions of this Section
1, offers for the purchase of Stock may be solicited by the Placement Agent
as agent for the Company at such times and in such amounts as the Placement
Agent deems advisable. The Placement Agent shall communicate to the Company,
orally or in writing, each reasonable offer to purchase Stock received by it as
agent of the Company. The Company shall have the sole right to accept offers to
purchase the Stock and may reject any such offer, in whole or in part. The
Placement Agent shall have the right, in its discretion reasonably exercised,
subject to providing prior notice to the Company, to reject any offer to
purchase Stock 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 Stock 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 (as defined below) the Company shall pay to the
Placement Agent by wire transfer of immediately available funds to an account
or accounts designated by the Placement Agent, an amount equal to six percent
(6.0%) of the gross proceeds received by the Company from the sale of the Stock
on such Closing Date.
(f) No Stock 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 Stock shall have
been delivered to the Purchaser thereof against payment by such Purchaser. If
the Company shall default in its obligations to deliver Stock to a Purchaser
whose offer it has accepted, the Company shall indemnify and hold the Placement
Agent harmless against any loss, claim or damage arising from or as a result of
such default by the Company.
2. REPRESENTATIONS
AND WARRANTIES OF THE COMPANY. The
Company represents and warrants to, and agrees with, the Placement Agent and
the Purchasers that:
(a) The Company meets the requirements for use of Form S-3
under the Securities Act of 1933, as amended (the “Securities Act”), and has filed with the Securities and
Exchange Commission (the “Commission”)
a registration statement on such Form (Registration File No. 333-107986), which
became effective as of December 9, 2003, for the registration under the
Securities Act of Common Stock, including the Stock. 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
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thereunder, a supplement to the
form of prospectus included in such registration statement relating to the
placement of the Stock and the plan of distribution thereof and has advised the
Placement Agent 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 a “Prospectus Supplement.” Any reference
herein 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, which 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 herein 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, 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 which is “contained,” “included,” “described,” “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
which 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. 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.
(b) The Registration Statement (and any post-effective
amendment thereto to be filed with the Commission on or prior to the Closing
Date) 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, 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 and the Prospectus Supplement, each as of its
respective date, comply in all material respects with the Securities Act and
the Exchange Act and the applicable Rules and Regulations. Each of the Base
Prospectus and the Prospectus Supplement, as amended or supplemented, did not
and will not 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
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Regulations, and none of such
Incorporated Documents, when they were filed with the Commission, contained any
untrue statement of a material fact or omitted to state a material fact
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 Base Prospectus or Prospectus Supplement, when
such documents are filed with the Commission, 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. Notwithstanding the foregoing, the Company makes no representations
or warranties as to information, if any, contained in or omitted from the
Prospectus Supplement or any amendment thereof or supplement thereto in reliance upon and in conformity with
information furnished in writing to the Company by or on behalf of the
Placement Agent specifically for use in the Registration Statement or the
Prospectus Supplement, which information the parties hereto agree is limited to
the Placement Agent’s Information as defined in Section 15. No post-effective amendment to the
Registration Statement reflecting any facts or events arising after the date
thereof which 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 or Prospectus Supplement, or to be filed as exhibits or schedules to
the Registration Statement, which have not been described or filed as required.
(c) The Company has delivered, or will as promptly as
practicable deliver, to the Placement Agent complete conformed copies of the
Registration Statement and of each consent and certificate of experts filed as
a part thereof, and conformed copies of the Registration Statement (without
exhibits) and the Base Prospectus and the Prospectus Supplement, as amended or
supplemented, in such quantities and at such places as the Placement Agent
reasonably requests. Neither the
Company nor any of its directors and officers has distributed and none of them
will distribute, prior to the completion of the distribution of Stock, any
offering material in connection with the offering and sale of the Stock other
than the Base Prospectus and the Prospectus Supplement or, from and after
delivery of the Base Prospectus and the Prospectus Supplement, the Registration
Statement and copies of the documents incorporated by reference therein and any
other materials permitted by the Securities Act.
(d) The Company has been duly organized
and is validly existing as a corporation and is 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 the ownership or lease of property or the conduct of its business
requires such qualification, and has all power and corporate 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, singularly or in the aggregate, a
material adverse effect on the condition
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(financial or
otherwise), results of operations, business, properties or prospects of the
Company (a “Material Adverse Effect”).
The Company has no subsidiaries.
(e) The Stock to be issued and sold by the Company hereunder
and under the Subscription Agreements has been duly and validly authorized and,
when issued and delivered against payment therefor as provided herein, will be
duly and validly issued, fully paid and nonassessable and free of any preemptive
or similar rights. The Stock conforms
to the description thereof contained in the Base Prospectus and the Prospectus
Supplement.
(f) The Company has an authorized capitalization as set forth
in the Base Prospectus and the Prospectus Supplement, all of the issued and
outstanding shares of Common 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 Base Prospectus and the Prospectus
Supplement. There are no outstanding options, warrants, or other rights to
purchase, or equity or debt securities convertible into or exchangeable or
exercisable for, any capital stock of the Company that have been granted by the
Company other than those accurately described in the Base Prospectus and the
Prospectus Supplement. 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 Base Prospectus and the Prospectus Supplement accurately and fairly
present the information required to be shown with respect to such plans,
arrangements, options and rights.
(g) The Stock when issued and sold by the Company against
payment therefor as provided herein, will be free and clear of any claim,
security interest, defect or restriction of any kind (“Liens”).
(h) The Company has the full right, power and corporate
authority to enter into this Agreement and 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 enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors’ rights
generally, and by general principles, 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.
(i) 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 for such breach, violation or default which would not reasonably be
likely to have a 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, judgment, order or decree of
5
any court or governmental
agency or body having jurisdiction over the Company or any of its properties or
assets.
(j) 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 Base Prospectus and the Prospectus
Supplement, or to be filed as an exhibit to the Registration Statement, which
is not described or filed as required.
All statements summarizing any franchises, contracts, leases,
instruments or other documents or legal matters contained in the Registration
Statement are accurate and complete in all material respects. No franchise, contract, lease, instrument or
other document described in the Base Prospectus and the Prospectus Supplement
has been suspended or terminated for convenience or default by the Company or
any of the other parties thereto, and the Company has not received notice or
any other knowledge of any such pending or threatened suspension or termination
by any of such other parties thereto, except, in either case, as described in
the Base Prospectus and the Prospectus Supplement, and except for such pending
or threatened suspensions or terminations that would not reasonably be likely
to, singularly or in the aggregate, have a Material Adverse Effect.
(k) All existing minute books of the Company, including all
existing records of all meetings and actions of the board of directors
(including, Audit, Compensation, Stock Plan, Nominating/Corporate Governance
and other board committees) and stockholders of the Company from
January 1, 1999 through the date of the latest meeting and action
(collectively, the “Corporate Records”) have been made
available to the Placement Agent and counsel for the Placement Agent. All such Corporate Records are complete and
accurately reflect, in all material respects, all transactions referred to in
such Corporate Records. There are no
material transactions, agreements or other actions of the Company for the
period covered by the Corporate Records that are not properly approved and/or
recorded in the Corporate Records.
(l) 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 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
Stock by the Company in the manner contemplated herein and in the Base
Prospectus and the Prospectus Supplement.
(m) Except as described in the Base
Prospectus and the Prospectus Supplement, no person or entity has the right to
require registration of shares of Common Stock or other securities of the
Company because of the filing or effectiveness of the Registration Statement or
otherwise, except for persons and entities who have expressly waived such right
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 (other than any registration statement on Form S-8
filed by the Company in connection with the proposed increase in shares
reserved for issuance under the Company’s Amended and Restated Stock Incentive
Plan as described in the
6
Company’s
proxy statement for its 2004 annual meeting of stockholders) for a period of at
least 90 days after the date hereof.
(n) The financial statements, together with the related notes
and schedules, of the Company included in the Base Prospectus, the Prospectus
Supplement 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 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. 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 Base Prospectus, the Prospectus Supplement or the Registration Statement,
or incorporated by reference therein, as the case may be.
(o) Except as set forth in the Base Prospectus and the
Prospectus Supplement, 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, singularly or in the aggregate, if determined adversely
to the Company, would be likely to 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 Company’s knowledge, no such proceedings are threatened
or contemplated by governmental authorities or threatened by others.
(p) The Company has good and marketable title in fee simple
to, or valid rights to lease or otherwise use, all items of real or personal
property (other than intellectual property) which are material to the business
of the Company, in each case free and clear of all Liens that would be likely
to result in a Material Adverse Effect.
(q) The Company is not (i) in violation
of any provision of its charter or bylaws, (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 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 (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 clause (ii), any violations or defaults which, singularly or in the
aggregate, would not have a Material Adverse Effect.
(r) The contracts described in the
Company’s periodic reports on Forms 10-Q, 10-K, and 8-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 neither the
Company nor, to the Company’s knowledge, any other
7
party to such
contracts is in breach of or default under any of such contracts which would
have a Material Adverse Effect, except in either case as described in the Base
Prospectus and the Prospectus Supplement.
(s) No labor problem or dispute with the employees of the
Company exists or, to the Company’s knowledge, is threatened or imminent, which
would be likely to have a Material Adverse Effect.
(t) The Company has fulfilled its obligations, if any, under
the minimum funding standards of Section 302 of the United States 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 “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 be likely 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) or to any such plan under
Title IV of ERISA. 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 is so qualified in all material respects and
nothing has occurred, whether by action or by failure to act, which would be
likely to cause the loss of such qualification.
(u) 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 business in which it is engaged; all policies of insurance
and fidelity or surety bonds insuring the Company and its business, assets,
employees, officers and directors are in full force and effect; the Company is
in compliance with the terms of such policies and instruments in all material
respects; and there are no claims by the Company under any such policy or
instrument as to which any insurance company is denying liability or defending
under a reservation of rights clause; the Company has not been refused any
insurance coverage sought or applied for; and 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 at a cost that would not have a
Material Adverse Effect, except as set forth in the Base Prospectus or the
Prospectus Supplement.
(v) 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 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 (collectively,
“Permits”),
except for such Permits which the failure to obtain would not have a Material
Adverse Effect, and is in compliance in all material respects with the terms
and conditions of all such Permits; all of such Permits held by the Company are
valid and in full force and effect; there is
8
no
pending or, to the Company’s knowledge, threatened action, suit, claim or
proceeding which may cause any such 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 Permit which, singly 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 Base Prospectus or the Prospectus Supplement.
(w) KPMG LLP, who have certified certain financial statements
of the Company and delivered their report with respect to the audited financial
statements and schedules for the years ended December 31, 2003 and 2002
included in the Base Prospectus, the Prospectus Supplement or the Registration
Statement, or incorporated by reference therein, as the case may be, are
independent public accountants with respect to the Company within the meaning
of the Securities Act and the Rules and Regulations.
(x) 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 Base Prospectus and the
Prospectus Supplement) 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, or except as set forth in the Base Prospectus and the
Prospectus Supplement.
(y) The principal executive officer and principal financial
officer of the Company have made all certifications required by the
Sarbanes-Oxley Act of 2002 and the rules and regulations promulgated in
connection therewith (the “Sarbanes-Oxley Act”),
and the statements contained in any such certification are complete and
correct. 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 financial officer, as
appropriate to allow timely decisions regarding required disclosure. The
Company does not have any material weaknesses in internal controls, and 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. The Company is otherwise in compliance in all respects
with all applicable effective provisions of the Sarbanes-Oxley Act and the
rules and regulations promulgated by the Commission (and intends to comply with
all applicable provisions that are not yet effective upon effectiveness).
(z) The Company maintains a system of internal accounting
controls sufficient to provide reasonable assurance that (i) transactions are
executed in accordance with
9
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.
(aa) Neither the Company nor any of its officers, directors or,
to the Company’s knowledge, its affiliates, has taken or will take, directly or
indirectly, any action designed or intended to stabilize or manipulate the
price of any security of the Company, or which caused or resulted in, or which
might in the future reasonably be expected to cause or result in, stabilization
or manipulation of the price of any security of the Company.
(bb) 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. The
Company has not been named as a “potentially
responsible party” under the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended.
(cc) 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
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, singularly or in the aggregate with
all such violations and remedial actions, a Material Adverse Effect; there has
been no material spill, discharge, leak, emission, 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, singularly 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.
(dd) In the ordinary course of its business, the Company
periodically reviews the effect of Environmental Laws on the business,
operations and properties of the Company, in the course of which it identifies
and evaluates associated costs and liabilities (including, without limitation,
any capital or operating expenditures
10
required for clean-up, closure
of properties or compliance with Environmental Laws, or any permit, license or
approval, any related constraints on operating activities and any potential
liabilities to third parties). On the
basis of such review, the Company has reasonably concluded that such associated
costs and liabilities would not, singly or in the aggregate, have a Material
Adverse Effect.
(ee) Except as set forth in the Base Prospectus and the
Prospectus Supplement, the Company owns, possesses, licenses or has other
rights to use all foreign and domestic patents, patent applications, trade and
service marks, trade and service mark registrations, trade names, copyrights,
licenses, inventions, trade secrets, technology, Internet domain names,
know-how and other intellectual property (collectively, the “Intellectual
Property”) necessary for the conduct of the Company’s business as
now conducted or as proposed in the Base Prospectus and the Prospectus
Supplement to be conducted. Except as
set forth in the Base Prospectus and the Prospectus Supplement, (a) there
are no rights of third parties to any such Intellectual Property; (b) to the
Company’s knowledge, there is no material infringement by third parties of any
such Intellectual Property; (c) there is no pending or, to the Company’s
knowledge, threatened action, suit, proceeding or claim by others challenging
the Company’s rights in or to any such Intellectual Property, and the Company
is unaware of any facts which would form a reasonable basis for any such claim;
(d) there is no pending or, to the Company’s knowledge, threatened action,
suit, proceeding or claim by others challenging the validity or scope of any
such Intellectual Property; (e) there is no pending or, to the Company’s
knowledge, threatened action, suit, proceeding or claim by others that the
Company infringes or otherwise violates any patent, trademark, copyright, trade
secret or other proprietary rights of others, and to the Company’s knowledge
there are no other facts which would form a reasonable basis for any material
claim; (f) to the Company’s knowledge, there is no third-party U.S. patent or
published U.S. patent application which contains claims for which an
Interference Proceeding could be commenced against any patent or patent
application described in the Base Prospectus and the Prospectus Supplement as
being owned by or licensed to the Company; and (g) the Company has taken all
steps reasonably determined by the Company to be necessary to perfect its ownership
of, other rights to or interest in the Intellectual Property.
(ff) 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 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). The descriptions of the results
of such studies and tests contained in the Base Prospectus and the Prospectus
Supplement are accurate and complete in all material respects and fairly
present the published data derived from such studies and tests. 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 or tests requiring the termination or suspension of such studies or
tests.
11
(gg) The Company has adopted a Code of Business Conduct and Ethics
that establishes policies and procedures for the conduct of the Company’s
business in a legal, ethical and responsible manner.
(hh) 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 material required filing,
declaration, listing, registration, report or submission; all such filings,
declarations, listings, registrations, reports or submissions were in
compliance in all material respects with applicable laws when filed 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.
(ii) No relationship, direct or indirect, exists between or
among the Company on the one hand and the directors, officers, stockholders,
customers or suppliers of the Company on the other hand which is required to be
described in the Base Prospectus and the Prospectus Supplement and which is not
so described.
(jj) Neither the Company nor any other person associated with
or acting on behalf of the Company including, without limitation, any director,
officer, agent or employee of the Company, has, directly or indirectly, while
acting on behalf of the Company (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.
(kk) The Company is not and, after giving effect to the offering
and sale of the Stock and the application of the proceeds thereof as described
in the Base Prospectus and the Prospectus Supplement, will not become an “investment company” as defined in the
Investment Company Act of 1940, as amended.
(ll) No forward-looking statement (within the meaning of
Section 27A of the Securities Act and Section 21E of the Exchange Act)
contained in the Base Prospectus and the Prospectus Supplement has been made or
reaffirmed without a reasonable basis or has been disclosed other than in good
faith.
(mm) Other than as provided by this Agreement, the Company is not a
party to any contract, agreement or understanding with any person that would
give rise to a valid claim against the Company or the Placement Agent for a
brokerage commission, finder’s fee or like payment in connection with the
offering and sale of the Stock.
(nn) The Company has not sustained, since the date of the latest
audited financial statements included in the Base Prospectus, the Prospectus
Supplement 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
12
or other calamity, whether or
not covered by insurance, or from any labor dispute or court or governmental
action, order or decree; and, since such date, there has not been any change in
the capital stock or long-term debt of the Company or any material adverse
change, or any development involving a prospective material adverse 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 the Base Prospectus and the Prospectus
Supplement.
(oo) The Stock is registered under the Exchange Act and is duly
listed and admitted and authorized for trading, subject to official notice of
issuance, on the Nasdaq National Market (“Nasdaq”)
and the Company has taken no action designed to, or likely to have the effect
of terminating the registration of the Common Stock under the Exchange Act or
delisting or suspending from trading the Common Stock 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.
(pp) There are no affiliations with the NASD among the Company’s
officers, directors or, to the best of the knowledge of the Company, any five
percent or greater stockholder of the Company, except as set forth in the Base
Prospectus, the Prospectus Supplement or the Registration Statement or
otherwise disclosed in writing to the Placement Agent.
(qq) The Company has taken all necessary actions to ensure that,
upon and at all times after the Nasdaq National Market shall have approved the
Stock for inclusion, it will be in compliance with all applicable corporate
governance requirements set forth in the Nasdaq National 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 National Marketplace Rules not currently in effect upon and all
times after the effectiveness of such requirements.
Any certificate signed by any
officer of the Company and delivered to the Placement Agent or counsel for the
Placement Agent in connection with the offering of the Stock shall be deemed a
representation and warranty by the Company, as to the matters covered thereby,
to the Placement Agent and the Purchasers.
3. THE
CLOSING.
The time and date of closing and delivery of the documents required to
be delivered to the Placement Agent pursuant to Section 6 hereof shall
be at 12:00 P.M., local time, on March 26, 2004 (the “Closing Date”) at the office of Cooley
Godward LLP, 4401 Eastgate Mall, San Diego, California.
4. FURTHER
AGREEMENTS OF THE COMPANY.
The Company agrees with the Placement Agent and the Purchasers:
(a) (i) to make no further
amendment or supplement prior to the Closing Date to the Registration Statement
or any amendment or supplement to the Prospectus Supplement, which shall be
reasonably disapproved by the Placement Agent in good faith promptly after
reasonable notice thereof; (ii) for so long as the delivery of a prospectus is
required in connection with the offering or sale of the Stock, to advise the
Placement Agent promptly after it receives notice thereof, of the time when any
amendment to the Registration Statement has been filed or becomes effective or
any
13
supplement to the Prospectus
Supplement or any amended Prospectus Supplement has been filed and to furnish
the Placement Agent with copies thereof; (iii) to use its reasonable efforts to
file promptly 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 Supplement and for so long as the delivery of a prospectus is
required in connection with the offering or sale of the Stock; (iv) to advise
the Placement Agent, promptly after it receives notices thereof, (x) of any
request by the Commission to amend the Registration Statement or to amend or
supplement the Prospectus Supplement 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 the Base Prospectus or
the Prospectus Supplement or any amendment or supplement thereto, of the
suspension of the qualification of the Stock for offering or sale in any
jurisdiction, or of the institution or threatening of any proceeding for any
such purpose; and (v) in the event of the issuance of any stop order or of any
order preventing or suspending the use of the Base Prospectus or Prospectus
Supplement or suspending any such qualification, promptly to use its reasonable
efforts to obtain the withdrawal of such order.
(b) To comply with the Securities Act and the Exchange Act,
and the Rules and Regulations thereunder, so as to permit the completion of the
distribution of the Stock as contemplated in this Agreement and the Prospectus
Supplement. If during the period in which a prospectus is required by law to be
delivered by a Placement Agent or a dealer in connection with the distribution
of Stock contemplated by the Prospectus Supplement, any event shall occur as a
result of which, in the judgment of the Company or in the reasonable opinion of
the Placement Agent or counsel for the Placement Agent, it becomes necessary to
amend or supplement the Prospectus Supplement in order to make the statements
therein, in the light of the circumstances existing at the time the Prospectus
Supplement is delivered to a purchaser, not misleading, or, if it is necessary
at any time to amend or supplement the Prospectus Supplement to comply with any
law, the Company promptly will prepare and file with the Commission, and
furnish at its own expense to the Placement Agent and to dealers an appropriate
amendment to the Registration Statement or supplement to the Prospectus
Supplement so that the Prospectus Supplement as so amended or supplemented will
not, in the light of the circumstances when it is so delivered, be misleading,
or so that the Prospectus Supplement will comply with such law. Before amending
the Registration Statement or supplementing the Base Prospectus in connection
with the Offering, the Company will furnish the Placement Agent with a copy of
such proposed amendment or supplement and will not file such amendment or
supplement to which the Placement Agent reasonably objects.
(c) To furnish promptly to the Placement Agent and to counsel
for the Placement Agent a copy of the Registration Statement as originally
filed with the Commission, and each amendment thereto filed with the
Commission, including all consents and exhibits filed therewith.
(d) To deliver promptly to the Placement Agent such number of
the following documents as the Placement Agent shall reasonably request: (i) conformed copies of
14
the Registration Statement as
originally filed with the Commission and each amendment thereto (in each case
excluding exhibits), (ii) the Base Prospectus, (iii) the Prospectus Supplement
(not later than 10:00 A.M., New York time, on the Business Day following the
execution and delivery of this Agreement) and any amendment or supplement
thereto (not later than 10:00 A.M., New York City time, on the Business Day
following the date of such amendment or supplement); and (iv) any document
incorporated by reference in the Base Prospectus or Prospectus Supplement. The Company will pay the expenses of
printing or other production of all documents relating to the Offering.
(e) To make generally available to its stockholders 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) complying with Section 11(a) of the Securities Act and the Rules and
Regulations (including, at the option of the Company, Rule 158).
(f) To promptly take from time to time such actions as the
Placement Agent may reasonably request to qualify the Stock for offering and
sale under the securities, or blue sky, laws of such jurisdictions (including
without limitation any post -filing requirements) as the Placement Agent may
designate and to continue such qualifications in effect for so long as required
for the distribution of the Stock, 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.
(g) Not to directly or indirectly offer, sell, issue, assign,
transfer, pledge, contract to sell, or otherwise dispose of any shares of
Common Stock or securities convertible into or exercisable or exchangeable for
Common Stock for a period of 90 days from the date of the Prospectus Supplement
without the prior written consent of SG Cowen, other than the Company’s sale of
the Stock, the issuance of shares or options to purchase shares pursuant to
qualified stock option plans or currently outstanding options, warrants or
rights or in connection with any corporate partnership or strategic alliance,
merger or acquisition transaction involving the Company. The Company will cause each of the
individuals listed on Exhibit B attached hereto to furnish to the
Placement Agent, prior to the Closing Date, a letter, substantially in the form
of Exhibit C attached hereto, pursuant to which each such person shall
agree not to directly or indirectly offer, sell, assign, transfer, pledge,
contract to sell, or otherwise dispose of any shares of Common Stock or securities
convertible into or exercisable or exchangeable for Common Stock for a period
of 90 days from the date of the Prospectus Supplement, without the prior
written consent of SG Cowen. If (i) the
Company issues an earnings release or material news or a material event
relating to the Company occurs during the last 17 days of the lock-up period,
or (ii) prior to the expiration of the lock-up period, the Company announces
that it will release earnings results during the 16-day period beginning on the
last day of the lock-up period, the restrictions imposed by this Section
4(g) shall continue to apply until the expiration of the 18-day period
beginning on the issuance of the earnings release or the occurrence of the
material news or material event.
15
(h) Prior to the Closing Date, to furnish to the Placement
Agent, as soon as they have been prepared, copies of any unaudited interim
financial statements of the Company for any periods subsequent to the periods covered
by the financial statements appearing or incorporated by reference in the Base
Prospectus, the Prospectus Supplement or the Registration Statement.
(i) 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 in the ordinary course of business and consistent with the past
practices of the Company and of which the Placement Agent is notified), without
the prior written consent of the Placement Agent, unless in the judgment of the
Company and its counsel, and after notification to the Placement Agent, such press
release or communication is required by law.
In such event, the Company shall consult with the Placement Agent as to
the contents of such press release.
(j) To apply the net proceeds from the sale of the Stock as
set forth in the Prospectus Supplement under the heading “Use of Proceeds.”
(k) To comply in all material respects with all applicable
securities and other applicable laws, rules and regulations, including, without
limitation, the Sarbanes-Oxley Act, and use its best efforts to cause the Company’s
directors and officers, in their capacities as such, to comply with such laws,
rules and regulations, including, without limitation, the provisions of the
Sarbanes-Oxley Act.
(l) To engage and maintain, at its expense, a registrar and
transfer agent for the Stock.
(m) To not take any action prior to the Closing Date which
would require the Prospectus Supplement to be amended or supplemented pursuant
to Section 4(b).
(n) To supply the Placement Agent with copies of all
correspondence to and from, and all documents issued to and by, the Commission
in connection with the registration of the Stock under the Securities Act.
(o) The Company will use its best efforts to ensure that the
Stock is quoted on the Nasdaq National Market at the Closing Date.
5. PAYMENT OF EXPENSES. The Company agrees with the Placement Agent
to pay (a) the costs incident to the authorization, issuance, sale, preparation
and delivery of the Stock to the Purchasers and any taxes payable in that
connection; (b) the costs incident to the Registration of the Stock under the
Securities Act; (c) the costs incident to the preparation, printing and
distribution of the Registration Statement, Base Prospectus and Prospectus
Supplement and any amendments and exhibits thereto or any document incorporated
by reference therein, and the costs of printing, reproducing and distributing,
this Agreement by mail, telex or other means of communication; (d) the fees and
expenses (including related reasonable fees and actual out-of-pocket expenses of
counsel for the Placement Agent) incurred in connection with filings, if any,
made with the NASD, if applicable; (e) any applicable listing or other fees;
(f) the fees and expenses of qualifying the Stock under the securities laws of
the several jurisdictions as provided in Section 4(f) and of preparing,
16
printing and distributing Blue
Sky Memoranda (including related reasonable fees and actual out-of-pocket
expenses of counsel to the Placement Agent); (g) all fees and expenses of the
registrar and transfer agent of the 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 Agent on
the Company’s behalf (which will be promptly reimbursed)); provided
that, except as otherwise provided in this Section 5 and in Sections
7 and 9, the Placement Agent shall pay its own costs and expenses,
including the fees and expenses of its counsel.
6. Conditions
to the Obligations of the Placement Agent and the Purchasers, and the Sale of
the Stock.
The respective obligations of the Placement Agent and the Purchasers,
and the closing of the sale of the Stock 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 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 accordance with Section 4(a) shall have been timely filed
with the Commission.
(b) The Placement Agent shall not have discovered on or prior
to the Closing Date that the Registration Statement, the Base Prospectus or the
Prospectus Supplement or any amendment or supplement thereto contains an untrue
statement of a fact which, in the opinion of counsel for the Placement Agent,
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 (in the case of the Base Prospectus and the Prospectus
Supplement in light of the circumstances under which they were made) not
misleading.
(c) All corporate proceedings and other legal matters incident
to the authorization, form, execution, delivery and validity of each of this
Agreement, the Stock, 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 each of (i)
Cooley Godward LLP, counsel for the Company and (ii) Sterne, Kessler, Goldstein
& Fox, patent counsel for the Company, such counsel’s written opinion and
statement, addressed to the Placement Agent and dated as of the Closing Date,
in form and substance
17
reasonably satisfactory to the
Placement Agent substantially as set forth in Exhibits D-1, and D-2
attached hereto, respectively.
(e) The Placement Agent shall have received from Brown Raysman
Millstein Felder & Steiner LLP, such opinion or opinions, dated the Closing
Date and addressed to the Placement Agent, with respect to the issuance and
sale of the Stock, the Registration Statement, the Base Prospectus, the
Prospectus Supplement (together with any supplement thereto) and other related
matters as the Placement Agent 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.
(f) The Company shall have furnished to the Placement Agent
and the Purchasers a certificate, dated as of the Closing Date, executed by its
Chief Executive Officer and President and its Vice President and Chief
Financial Officer stating that (i) such officers have carefully examined the
Registration Statement, the Base Prospectus and the Prospectus Supplement and,
in their opinion, the Registration Statement (including the Base Prospectus) as
of its effective date and the Prospectus Supplement, as of each such effective
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 (in the case of the Base Prospectus and the Prospectus
Supplement in light of the circumstances under which they were made) not
misleading, (ii) since the effective date of the Registration Statement no
event has occurred which should have been set forth in a supplement or
amendment to the Registration Statement, the Base Prospectus or the Prospectus
Supplement, (iii) to the best of their knowledge after reasonable
investigation, as of the Closing Date, the representations and warranties of
the Company in this Agreement are true and correct and the Company has complied
with 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, (iv) subsequent to the date of the most recent financial
statements included or incorporated by reference in the Base Prospectus and the
Prospectus Supplement, there has been no change in the financial position or results
of operation of the Company that would have a Material Adverse Effect, or any
change, or any development including a prospective change, in or affecting the
condition (financial or otherwise), results of operations, business or
prospects of the Company, except as set forth in the Base Prospectus and the
Prospectus Supplement and (v) the Registration Statement became effective on
December 9, 2003, and to its 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 Stock.
(g) On the date of the execution of this Agreement, the
Placement Agent shall have received from KPMG LLP a letter, addressed to the
Placement Agent and dated such date, in form and substance reasonably
satisfactory to the Placement Agent (i) confirming that they are independent
certified public accountants with respect to the Company within the meaning of
the Securities Act and the Rules and Regulations and
18
(ii) stating the conclusions
and findings (or cold comfort) of such firm with respect to the financial
statements and certain financial information contained or incorporated by
reference in the Base Prospectus and the Prospectus Supplement.
(h) On the Closing Date, the Placement Agent shall have
received a letter (the “bring-down letter”)
from KPMG LLP addressed to the Placement Agent and the Purchasers 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 Base Prospectus and
the Prospectus Supplement as of a date not more than three Business Days prior
to the date of the bring-down letter), the conclusions and findings (or cold
comfort) of such firm with respect to the financial information and other
matters covered by its letter delivered to the Placement Agent concurrently
with the execution of this Agreement pursuant to Section 6(g).
(i) (i) The Company shall not have sustained since the date
of the latest audited financial statements included or incorporated by
reference in the Base Prospectus and the Prospectus Supplement 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 the Prospectus Supplement, 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, 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 Stock on the terms and in the manner contemplated by the Base Prospectus
and the Prospectus Supplement.
(j) The Stock is registered under the Exchange Act and, as of
the Closing Date, shall be listed and admitted and authorized for trading on
the Nasdaq National 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 Stock under the Exchange Act
or delisting or suspending from trading the Stock from Nasdaq, nor has the
Company received any information suggesting that the Commission or Nasdaq is
contemplating terminating such registration or listing.
(k) At the Execution Time, the Company shall have furnished to
the Placement Agent a letter substantially in the form of Exhibit C
hereto from each individual listed on Exhibit B attached hereto.
(l) 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 National 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
19
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 current hostilities, or 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 or delivery of the Stock on the terms and in the
manner contemplated by the Base Prospectus and the Prospectus Supplement.
(m) 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 Stock or materially 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 Stock or materially and adversely affect the business or operations
of the Company.
(n) 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.
(o) The Company shall have entered into Subscription
Agreements with each of the Purchasers and such agreements shall be in full
force and effect.
(p) Prior to the Closing Date, the Company shall have
furnished to the Placement Agent such further information, certificates and
documents as the Placement Agent 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 Agent.
7. Indemnification and Contribution.
(a) The Company shall indemnify and hold harmless the
Placement Agent, its officers, employees, representatives and agents and each
person, if any, who controls the Placement Agent 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 or liability, joint or several, or any action
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, liability or action arises out of, is based upon or is in connection
with (i) any untrue statement or alleged untrue statement of a material fact
contained in the Base Prospectus, the Registration Statement or the Prospectus
Supplement or in any amendment or supplement thereto, (ii) the omission or
alleged omission to state in the
20
Base Prospectus, the
Registration Statement or the Prospectus Supplement or in any amendment or
supplement thereto 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 the Placement Agent
in connection with, or relating in any manner to, the Stock or the Offering
contemplated hereby, and which is included as part of or referred to in any
loss, claim, damage, liability or action 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, 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 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 connection with any
such loss, claim, damage, liability or action as such 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, liability or action 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 or the
Prospectus Supplement or any such amendment or supplement solely in reliance
upon and in conformity with written information furnished to the Company by or
on behalf of the Placement Agent specifically for use therein, which
information the parties hereto agree is limited to the Placement Agent’s
Information (as defined in Section 15).
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) The Placement Agent 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 or liability,
joint or several, or any action 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, is
based upon or is in connection with (i) any untrue statement or alleged untrue
statement of a material fact contained in the Base Prospectus, the Registration
Statement or the Prospectus Supplement or in any amendment or supplement
thereto, (ii) the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, 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 the Placement Agent specifically for use therein, or (iii) any act
or failure to act, or any alleged act or failure to act, by the Placement Agent
in connection with, or relating in any manner to, the Stock or the Offering
contemplated hereby to the extent that it is determined in a final judgment by
a court of competent jurisdiction that such loss, claim, damage, liability or
action resulted directly from any
21
such act or failure to act
undertaken or omitted to be taken by such Placement Agent through its gross
negligence or willful misconduct, 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, liability or action as such expenses are incurred; provided that
the parties hereto hereby agree that such written information provided by or on
behalf of the Placement Agent consists solely of the Placement Agent’s
Information. This indemnity agreement
is not exclusive and will be in addition to any liability, which the Placement
Agent and the Purchasers 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
the 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 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
22
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 Placement Agent, 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 reasonable fees
and actual out-of-pocket 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 Agent on the other from the offering of the Stock 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 of the Company on
the one hand and the Placement Agent 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 Agent 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 Stock purchased under this
Agreement (before deducting expenses) received by the Company bears to the
total compensation received by the Placement Agent with respect to the Stock
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 Agent on the other, the intent of
the parties and their relative knowledge,
23
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 Placement Agent for use in the Prospectus Supplement consists
solely of the Placement Agent’s Information.
The Company and the Placement Agent 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), the
Placement Agent shall not be required to contribute any amount in excess of (x)
the total price at which the Stock was offered and sold to the public, less (y)
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.
8. Termination. The
obligations of the Placement Agent and the Purchasers hereunder and under the
Subscription Agreements may be terminated by the Placement Agent, in its
absolute discretion by notice given to the Company prior to delivery (including
electronic delivery) of and payment for the Stock if, prior to that time, any
of the events described in Sections 6(i) or 6(l) have occurred or
if the Purchasers shall decline to purchase the Stock for any reason permitted
under this Agreement.
9. Reimbursement of
the Placement Agent’s Expenses. If the sale of the Stock provided for
herein is not consummated because any condition to the obligations of the
Placement Agent 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, 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 Agent, the Company will reimburse the Placement
Agent upon demand for all out-of-pocket expenses (including reasonable fees and
disbursements of counsel and any expenses advanced by the Placement Agent on
the Company’s behalf) that shall have been incurred by the Placement Agent in
connection with this Agreement and the proposed purchase and sale of the Stock
and, upon demand, the Company shall pay the full amount thereof to SG Cowen.
10. Successors; Persons
Entitled to Benefit of Agreement. This Agreement shall inure to the benefit
of and be binding upon the Placement Agent, the Purchasers, 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 contained in this Agreement shall also be for the
benefit of the Placement Agent Indemnified Parties, and the
24
indemnities of the Placement
Agent shall also be for the benefit of the Company Indemnified Parties. It is understood that the Placement Agent’s
responsibilities to the Company are solely contractual in nature and the
Placement Agent does 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
the Placement Agent, as set forth in this Agreement or otherwise made by them
pursuant to this Agreement, shall remain in full force and effect, regardless
of any investigation made by or on behalf of the Placement Agent, the
Purchasers, the Company, or any person controlling any of them and shall
survive delivery of and payment for the Stock.
12. Notices. All statements, requests, notices and
agreements hereunder shall be in writing, and:
(a) if to the Placement Agent, shall be delivered or sent by
mail, telex or facsimile transmission to SG Cowen Securities Corporation, 1221
Avenue of the Americas, New York, New York 10020, Attention: Veronica Iuliano,
Esq. (Fax: 212-278-7995), with a copy to: Brown Raysman Millstein Felder &
Steiner LLP, 900 Third Avenue, New York, New York 10022, Attention: Stuart
Bressman, Esq. (Fax: 212-895-2900).
(b) if to the Company shall be delivered or sent by mail,
telex or facsimile transmission to Vical Incorporated, 10390 Pacific Center
Court, San Diego, California 92121, Attention: Vijay B. Samant (Fax:
858-646-1150), with a copy to: Cooley Godward LLP, 4401 Eastgate Mall, San
Diego, California 92121, Attention: L. Kay Chandler, Esq. (Fax: 858-550-6420).
13. 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
National 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. § 135.
“To the Company’s knowledge, aware” and words of similar import
shall mean that which the officers or directors of the Company know or should
have known using the exercise of reasonable due diligence.
14. Governing
Law. This
Agreement shall be governed by and construed in accordance with the laws of the
State of New York.
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15. Placement Agent’s Information. The parties hereto acknowledge and agree
that, for all purposes of this Agreement, the Placement Agent’s Information consists
solely of the statements concerning the Placement Agent contained in the third
paragraph under the heading “Plan of Distribution” in the Prospectus
Supplement.
16. 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.
17. 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 Agent.
18. 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.
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If the foregoing is in
accordance with your understanding of the agreement between the Company and the
Placement Agent, kindly indicate your acceptance in the space provided for that
purpose below.
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Very truly
yours,
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VICAL
INCORPORATED
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By:
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/s/ VIJAY B.
SAMANT
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Name: Vijay B. Samant
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Title: President, CEO
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Accepted as
of
the date first above written:
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SG COWEN
SECURITIES CORPORATION
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By:
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/s/ RICHARD
E. GORMLEY
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Name: Richard E. Gormley
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Title: Managing Director
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27
Exhibit A
Form of Subscription Agreement
SUBSCRIPTION AGREEMENT
Vical Incorporated
10390 Pacific Center Court
San Diego, California 92121
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 Vical Incorporated, a Delaware
corporation (the “Company”), and
the Investor.
2. The
Company has authorized the sale and issuance to certain investors of up to
3,379,000 shares (the “Shares”)
of its Common Stock, par value $.01 per share (the “Common Stock”), subject to adjustment by the Company’s Board
of Directors, or a committee thereof, for a purchase price of $5.50 per share
(the “Purchase Price”).
3. The
offering and sale of the Shares (the “Offering”)
are being made pursuant to an effective Registration Statement on Form S-3
(including the Prospectus contained therein (the “Base Prospectus”), the “Registration
Statement”) filed by the Company with the Securities and Exchange
Commission (the “Commission”) 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 to the Investor.
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 of Common Stock
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 Mellon Investor Services, 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:
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THE CITIBANK
PRIVATE BANK
153 East 53rd Street
New York, NY 10043
ABA # 021-000-089
Account Name: Vical Incorporated
Account Number: 74689402
– OR –
[____] 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 SG
Cowen Securities Corporation 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 SG COWEN
SECURITIES CORPORATION OF THE ACCOUNT OR ACCOUNTS AT SG COWEN SECURITIES
CORPORATION TO BE CREDITED WITH THE SHARES BEING PURCHASED BY SUCH INVESTOR,
AND
(II) CONFIRM THAT THE ACCOUNT
OR ACCOUNTS AT SG COWEN SECURITIES CORPORATION 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.
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 BY WAY OF DWAC OR DVP 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 any of its affiliates and (b) it has no direct or indirect
affiliation or association with any NASD member. Exceptions:
(If no exceptions, write “none.” If left blank, response will be deemed
to be “none.”)
7. The
Investor represents that it has received the final Base Prospectus, dated
December 9, 2003, which is a part of the Company’s Registration Statement,
prior to or in connection with the receipt of this Agreement.
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Number of
Shares:
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Purchase
Price Per Share: $
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Aggregate
Purchase Price: $
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Please confirm
that the foregoing correctly sets forth the agreement between us by signing in
the space provided below for that purpose.
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Dated as of:
,
2004
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INVESTOR
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By:
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Print Name:
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Title:
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Address:
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Agreed and
Accepted
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this
day of
,
2004:
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Vical Incorporated
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By:
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Title:
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3
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 Agent.
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”)
and expects to complete sales of Shares to them. 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 SG Cowen Securities Corporation (the “Placement Agent”) 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 that may
be relied upon by the Investor. 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 Agent, and
of which the Investors will be notified in advance by the Placement Agent. 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 Stock Certificate 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 accuracy of the representations and
4
warranties made by the Company
and the fulfillment of those undertakings of the Company to be fulfilled prior
to the Closing Date, including, without limitation, those contained in the
Placement Agreement (collectively, the “Company
Closing Conditions”). 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 Agent pursuant to the terms
of that certain Escrow Agreement (the “Escrow
Agreement”) dated as of March 23, 2004, by and among the Company,
the Placement Agent and Brown Raysman Millstein Felder & Steiner LLP (the “Escrow Agent”):
THE CITIBANK
PRIVATE BANK
153 East 53rd Street
New York, NY 10043
ABA # 021-000-089
Account Name: Vical Incorporated
Account Number: 74689402
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 Agent, of the Company Closing Conditions. The Placement Agent shall have no rights in
or to any of the escrowed funds, unless the Placement Agent 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 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 Agent 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).
Investor
acknowledges that the Escrow Agent acts as counsel to the Placement Agent, and
shall have the right to continue to represent the Placement Agent, in any
action, proceeding, claim, litigation, dispute, arbitration or negotiation in
connection with the Offering, and Investor hereby consents thereto and waives
any objection to the continued representation of the Placement Agent by the
Escrow Agent in connection therewith based upon
5
the services of the Escrow
Agent under the Escrow Agreement, without waiving any duty or obligation the
Escrow Agent may have to any other person.
(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 SG Cowen Securities Corporation
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 Mellon Investor Services, 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 Agent. 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 SG Cowen Securities Corporation of the account or accounts at SG
Cowen Securities Corporation 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
SG Cowen Securities Corporation identified by Investor and simultaneously
therewith payment shall be made from such account(s) to the Company through
DTC.
6
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, (b)
the Investor has answered all questions on the Signature Page 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 and (c) the Investor, in connection with its decision to purchase the
number of Shares set forth on the Signature Page, relied only upon the Base
Prospectus, the Prospectus Supplement, the Company’s regular reports on Forms
10-K, 10-Q and 8-K, which are incorporated by reference therein, as filed by
the Company with the Commission, and the representations and warranties of the
Company contained herein.
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 Agent is not
authorized to make and has 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 Base Prospectus
or the Prospectus Supplement.
4.3 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 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 Investor represents,
warrants and agrees that it has not engaged in any short selling of the
Company's securities, or established or increased any "put equivalent
7
position" as defined in
Rule 16(a)-1(h) under the Securities Exchange Act of 1934 with respect to the
Company's securities, within the past 10 trading days.
5. Survival
of Representations, Warranties and Agreements.
Notwithstanding any investigation made by any party to this
Agreement or by the Placement Agent, 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.
6. 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, (iv) if delivered by facsimile,
upon electric confirmation of receipt and will be delivered as addressed as
follows:
(a) if to the Company,
to:
Vical
Incorporated
10390 Pacific Center Court
San Diego, California 92121
Attention: Vijay B. Samant
Phone: 858-646-1100
Telecopy: 858-646-1150
with copies
to:
Cooley Godward
LLP
4401 Eastgate Mall
San Diego, California 92121
Attention: L. Kay Chandler, Esq.
Phone: 858-550-6014
Telecopy: 858-550-6420
(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.
7. Changes. This Agreement may not be modified or
amended except pursuant to an instrument in writing signed by the Company and
the Investor.
8. 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.
9. 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.
10. 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.
11. 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.
12. Termination. In the event that the Placement Agent
Agreement is terminated by the Placement Agent pursuant to the terms thereof,
this Agreement shall terminate without any further action on the part of the
parties hereto.
8
EXHIBIT A
VICAL INCORPORATED
STOCK CERTIFICATE QUESTIONNAIRE
Pursuant to Section
3 of Annex I to the Agreement, please provide us with the following
information:
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1.
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The exact
name that your Shares are to be registered in (this is the name that will
appear on your stock certificate(s)). You may use a nominee name if
appropriate:
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2.
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The
relationship between the Investor and the registered holder listed in
response to item 1 above:
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3.
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The mailing
address of the registered holder listed in response to item 1 above:
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4.
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The Social
Security Number or Tax Identification Number of the registered holder listed
in the response to item 1 above:
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5.
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Name of DTC
Participant (broker-dealer at which the account or accounts to be credited
with the Shares are maintained)
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6.
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DTC
Participant Number
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Name of
Account at DTC Participant being credited with the Shares
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Account
Number at DTC Participant being credited with the Shares
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9
Exhibit B
Individuals Subject to Lock-Up Agreements
Vijay B. Samant
David C. Kaslow, M.D.
Martha J. Demski
Alan E. Dow, J.D., Ph.D.
Kevin R. Bracken
Alain P. Rolland
Robert H. Campbell
R. Gordon Douglas, M.D.
M. Blake Ingle, Ph.D.
Patrick F. Latterell
Gary A. Lyons
Robert C. Merton, Ph.D.
Exhibit C
Form of Lock-Up Agreement
Lock-Up Agreement
March , 2004
SG Cowen Securities Corporation
1221 Avenue of the Americas
New York, New York 10020
Re:
Vical Incorporated – Offering of Common Stock
Dear Sirs:
In order to induce SG Cowen
Securities Corporation (“SG Cowen”)
to enter into a certain placement agent agreement with Vical Incorporated, a
Delaware corporation (the “Company”),
with respect to the offering of shares of the Company’s Common Stock, par value
$.01 per share (“Common Stock”),
the undersigned hereby agrees that for a period of 90 days following the date
of the final prospectus (the “Final
Prospectus”) filed by the Company with the Securities and Exchange
Commission in connection with such offering, the undersigned will not, without
the prior written consent of SG Cowen, directly or indirectly, (i) offer, sell,
assign, transfer, pledge, contract to sell, or otherwise dispose of, any shares
of Common Stock (including, without limitation, Common Stock which may be
deemed to be beneficially owned by the undersigned in accordance with the rules
and regulations promulgated under the Securities Act of 1933 (the “Securities Act”) and the Securities
Exchange Act of 1934, as the same may be amended or supplemented from time to
time (such shares, the “Beneficially Owned
Shares”)) or securities convertible into or exercisable or
exchangeable for Common Stock, (ii) enter into any swap, hedge or similar
agreement or arrangement that transfers in whole or in part, the economic risk
of ownership of the Beneficially Owned Shares or securities convertible into or
exercisable or exchangeable in Common Stock or (iii) engage in any short
selling of the Common Stock.
Notwithstanding the foregoing,
nothing contained herein will be deemed to restrict or prohibit the transfer of
shares of Common Stock, Beneficially Owned Shares or securities convertible
into or exercisable or exchangable for shares of Common Stock (i) as a bona
fide gift, (ii) as a distribution to partners, retired partners or the estates
of such partners or retired partners or shareholders of the undersigned or
(iii) to a trust for the direct or indirect benefit of the undersigned or the
immediate family of the undersigned, provided in each of cases (i), (ii) and
(iii) that the donees, distributees or transferees thereof agree in writing to
be bound by the terms hereof. For
purposes of this Agreement, “immediate family” shall mean any relationship by
blood, marriage or adoption, not more remote than first cousin. In addition, the foregoing shall not be
deemed to restrict or prohibit the sale of shares of Common Stock pursuant to,
or the entry into or modification of, a so-called “10b5-1” plan at any time
(other than the entry into or modification of such a plan in such a manner as
to cause the sale of shares of Common Stock within the lock-up period).
If (i) the Company issues an
earnings release or material news or a material event relating to the Company
occurs during the last 17 days of the lock-up period, or (ii) prior to the
expiration of the lock-up period, the Company announces that it will release
earnings results during the 16-day period beginning on the last day of the
lock-up period, the restrictions imposed by this Agreement shall continue to
apply until the expiration of the 18-day period beginning on the issuance of
the earnings release or the occurrence of the material news or material event.
Anything contained herein to
the contrary notwithstanding, any person to whom shares of Common Stock or
Beneficially Owned Shares are transferred from the undersigned from and after
the date hereof shall be bound by the terms of this Agreement.
It is understood that, if the
Company notifies the undersigned that it does not intend to proceed with the
offering contemplated hereby, the undersigned shall be released from its
obligations under this Agreement. In
addition, this Agreement shall lapse and become null and void if such offering shall
not have occurred on or before June 30, 2004.
In addition, the undersigned
hereby confirms that the undersigned does not have the right to request or
demand registration pursuant to the Securities Act of any shares of Common
Stock that are registered in the name of the undersigned or that are
Beneficially Owned Shares. In order to
enable the aforesaid covenants to be enforced, the undersigned hereby consents
to the placing of legends and/or stop-transfer orders with the transfer agent
of the Common Stock with respect to any shares of Common Stock or Beneficially
Owned Shares.
SIGNATURE BLOCK FOR A NATURAL PERSON
SIGNATURE BLOCK FOR A CORPORATION, PARTNERSHIP, TRUST
OR OTHER ENTITY
Name of corporation, partnership, trust or other entity, including type
of entity and jurisdiction of organization:
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By:
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Name:
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Title:
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Date:
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[Signature Page to Lock-Up Agreement]
Exhibit D-1
Legal Opinion of Cooley Godward LLP
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March 26, 2004
SG Cowen Securities Corporation
1221 Avenue of the Americas
New York, New York 10020
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ATTORNEYS AT LAW
4401 Eastgate Mall
San Diego, CA
92121-1909
Main 858 550-6000
Fax 858 550-6420
www.cooley.com
L. KAY CHANDLER
(858) 550-6014
kchandler@cooley.com
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Broomfield, CO
720 566-4000
Palo Alto, CA
650 843-5000
Reston, VA
703 456-8000
San Francisco, CA
415 693-2000
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Ladies and Gentlemen:
We have acted as counsel for Vical
Incorporated, a Delaware corporation (the “Company”), in connection with the sale by
the Company to the Purchasers listed on Exhibit A hereto (the “Purchasers”) of up
to 3,379,000 shares (the “Shares”) of the Company’s common stock, $0.01 par value
(the “Common Stock”),
pursuant to that certain Placement Agent Agreement, dated as of March 23, 2004
(the “Placement Agent
Agreement”), by and between the Company and you, as placement
agent (the “Placement
Agent”), and the Subscription Agreements, each dated as of March
23, 2004 (the “Subscription
Agreements”), by and among the Company and each of the
purchasers listed on Exhibit A (the
“Purchasers”). We are rendering this opinion pursuant to
Section 6(d) of the Placement Agent Agreement.
Except as otherwise defined herein, capitalized terms used but not
defined herein have the respective meanings given to them in the Placement
Agent Agreement.
In connection with this opinion, we have examined and relied upon the
representations and warranties as to factual matters contained in, and made
pursuant to, the Placement Agent Agreement and Subscription Agreements by the
various parties, and have examined and relied upon the originals or copies of
such records, documents, certificates, opinions, memoranda and other
instruments as in our judgment are necessary or appropriate to enable us to
render the opinions expressed below, including the Registration Statement on
Form S-3 (No. 333-107986) relating to the Shares (the “Registration Statement”),
originally filed with the Securities and Exchange Commission (the “Commission”) under
the Securities Act of 1933, as amended (the “Securities Act”), on August 14, 2003, the
prospectus included within the Registration Statement (the “Base Prospectus”),
and the supplemented form of prospectus relating to the Shares (the “Prospectus Supplement”),
dated March 23, 2004 and filed with the Commission pursuant to Rule 424(b) of
the Rules and Regulations of the Securities Act.
As to certain factual matters, we have relied upon a certificate
executed by an officer of the Company and have not sought to independently
verify such matters. Where we render an
opinion “to our knowledge” or concerning an item “known to us” or our opinion
otherwise refers to our knowledge, it is based solely upon (i) an inquiry of
attorneys within this firm who perform legal services for the Company; (ii) an
examination of a certificate executed by an officer of the Company covering
such matters; and (iii) such other investigation, if any, that we
specifically set forth herein.
In rendering this opinion, we have assumed the genuineness and
authenticity of all signatures on original documents; the authenticity of all
documents submitted to us as originals; the conformity
to originals of all documents submitted to us as copies; the accuracy,
completeness and authenticity of certificates of public officials; and the due
authorization, execution and delivery of all documents (except the due
authorization, execution and delivery by the Company of the Placement Agent
Agreement and Subscription Agreements) where authorization, execution and
delivery are prerequisites to the effectiveness of such documents. We have also assumed that all individuals
executing and delivering documents had the legal capacity to so execute and
deliver; that you and the Purchasers have received all documents you or they
were to receive under the Placement Agent Agreement and Subscription
Agreements, as applicable; that the Placement Agent Agreement and Subscription
Agreements are obligations binding on the Placement Agent and each of the Purchasers,
as applicable; and that there are no extrinsic agreements or understandings
between the various parties to the Placement Agent Agreement or Subscription
Agreements that would modify or interpret the terms thereof or the respective
rights or obligations of the parties thereunder.
Our opinion is expressed only with respect to the laws of the State of
California, the General Corporation Law of the State of Delaware (the “DGCL”) and the
federal securities laws of the United States.
We express no opinion as to whether the laws of any particular
jurisdiction apply, and we express no opinion to the extent that the laws of
any jurisdiction other than those identified above are applicable to the
subject matter hereof. We are not rendering any opinion as to compliance
with any tax, insolvency or antitrust law, rule or regulation. We are not rendering any opinion and, except
as set forth in the penultimate paragraph herein, we are not providing any
assurance, as to compliance with any antifraud law, rule or regulation. Furthermore, we express no opinion
with respect to any consents, approvals or filings with the National
Association of Securities Dealers, Inc. (the “NASD”) and any consents, approvals or
filings as may required under state securities laws in connection with the
purchase and distribution of the Shares.
With respect to our opinion in paragraph 1
below, as to the Company’s good standing as a foreign corporation under the
laws of the State of California, we have relied solely upon an examination of a
certificate of good standing issued by the Secretary of State of the State of
California. We have undertaken no
independent verification with respect thereto, and we have made no further
investigation.
With respect to our opinion in Paragraph 3 below, as to full payment
for the Shares, we have assumed full payment by the Purchasers for the Shares
in accordance with the terms of the Placement Agent Agreement and Subscription
Agreements.
With respect to our opinion in Paragraph 4 below, as to the Material
Agreements (as defined below), we have relied solely upon the list of material
agreements and instruments filed as exhibits to the Company’s Annual Report on
Form 10-K for the year ended December 31, 2003 or to the
Company’s Current Report on Form 8-K filed on March 24, 2004 (collectively, the
“Material Agreements”). We have undertaken no independent
verification with respect thereto,
2
and we have made no further investigation. We have assumed that there are no amendments or modifications to
the Material Agreements in the form filed as exhibits that would modify or
interpret the terms thereof or the respective rights or obligations of the
parties thereunder.
With respect to our opinion in paragraph 6 below, as to conflicts
with, breaches or violations of or defaults under the Material Agreements, we
have relied solely upon (i) our review of such Material Agreements, (ii) an
examination of a certificate executed by an officer of the Company and (iii) an
inquiry of attorneys within this firm who perform legal services for the
Company. We have undertaken no
independent verification with respect thereto, and we have made no further
investigation. We express no opinion
with respect to applicable laws, rules or regulations which may limit the
availability of indemnity or contribution under the Placement Agent Agreement
or otherwise.
With regard to paragraph 7 below, our opinion is based solely upon oral
advice from the staff of the Commission that the Registration Statement was
declared effective under the Securities Act at 12:00 p.m. Eastern time on
December 9, 2003, and that no stop order suspending the effectiveness of the
Registration Statement has been issued and that no proceedings for that purpose
have been initiated or are pending or contemplated by the Commission. We have made no further investigation.
With respect to our opinion in paragraph 11
below, as to legal or governmental proceedings, we have relied solely upon
(i) an examination of a certificate executed by an officer of the Company
and (ii) an inquiry of attorneys within this firm who perform
legal services for the Company. We have undertaken no independent
verification with respect thereto, and we have made no further investigation.
With respect to our opinion in paragraph 13 below, we have based
our opinion, to the extent we consider appropriate, on Rule 3a-8 under the
Investment Company Act of 1940, as amended (the “Investment Company Act”), and an examination
of a certificate executed by an officer of the Company as to the Company’s
compliance with each of the requirements necessary to comply with Rule
3a-8. We have undertaken no independent
verification with respect thereto, and we have made no further
investigation. The Company has not
filed an application requesting an order granting exemption pursuant to Section
3(b)(2) of the Investment Company Act and, to our knowledge, has no intent to
do so.
With respect to our opinion in paragraph 14 below, we have relied
solely upon (i) an examination of a certificate executed by an officer of the
Company and (ii) an inquiry of
attorneys within this firm who perform legal services for the Company. We have
undertaken no independent verification with respect thereto, and we have made
no further investigation.
3
On the basis of the foregoing and in reliance thereon, and with the
foregoing qualifications, we are of the opinion that:
1. The
Company has been duly incorporated and is validly existing as a corporation in
good standing under the laws of the State of Delaware, is duly qualified to do
business and is in good standing as a foreign corporation under the laws of the
State of California, and has the corporate power and authority necessary to own
or lease its properties and to conduct its business as described in the Base
Prospectus and Prospectus Supplement.
2. The
Company has authorized capital stock as set forth in the Base Prospectus.
3. The
Shares have been duly authorized and, when issued and delivered to the
Purchasers against payment therefor, as described in the Placement Agent
Agreement and the Subscription Agreements, will be duly and validly issued,
fully paid and non-assessable.
4. There
are no preemptive or similar rights to subscribe for or to purchase, nor any
restriction upon the voting or transfer of, any of the Shares pursuant to the
Company’s certificate of incorporation or by-laws or any of the Material
Agreements.
5. The
Placement Agent Agreement and the Subscription Agreements have been duly
authorized, executed and delivered by the Company.
6. The
execution, delivery and performance of the Placement Agent Agreement and the
Subscription Agreements by the Company and the issuance and sale of the Shares
to the Purchasers pursuant thereto 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 of the Material Agreements, nor will such actions result in any
violation of the provisions of the certificate of incorporation or by-laws of
the Company or the DGCL, any United States federal or California state statute,
law, rule or regulation applicable to the Company or any judgment, order or
decree known to us of any court or governmental agency or body in the United
States specifically naming the Company or any of its properties.
7. The
Registration Statement is effective under the Securities Act, and no stop order
suspending the effectiveness of the Registration Statement has been issued and,
to our knowledge, no proceeding for that purpose is pending or threatened by
the Commission.
8. Except
for the registration of the Shares under the Securities Act and such consents,
approvals, authorizations, registrations or qualifications as may be required
under the Exchange Act and applicable state securities laws or the rules and
regulations of the NASD in connection with the purchase and distribution of the
Shares, no consent, approval, authorization or order of, or filing or
registration with, any such court or governmental agency or body is required
for the
4
execution, delivery and performance of the Placement Agent Agreement by
the Company and the consummation by the Company of the transactions contemplated
thereby.
9. To
our knowledge, no person or entity has the right to require registration of
shares of Common Stock or other securities of the Company because of the filing
or effectiveness of the Registration Statement, the completion of the Offering
or otherwise, except for persons and entities who have expressly waived such
right or who have been given proper notice and have failed to exercise such
right within the time or times required under the terms and conditions of such
right.
10. The
statements in the Base Prospectus under the heading “Description of Capital
Stock,” to the extent that they purport to constitute a summary of the terms of
the Common Stock, fairly present the matters described therein in all material
respects.
11. To
our knowledge and other than as set forth or referred to in the Base Prospectus
and the Prospectus Supplement, there are no legal or governmental proceedings
(including any such proceedings relating to the Company’s intellectual
property) pending to which the Company is a party or of which any property of
the Company is the subject, which singularly or in the aggregate could
reasonably be expected to have a Material Adverse Effect on the Company or
would prevent or adversely affect the ability of the Company to perform its
obligations under the Placement Agent Agreement.
12. The
Registration Statement (including the Base Prospectus), as of its effective
date, and the Prospectus Supplement, as of its effective date, and any further
amendments or supplements thereto, as of their respective effective dates, made
by the Company prior to the Closing Date (other than the financial statements,
related schedules, other financial data and statistical data derived therefrom
contained or referred to therein, as to which we express no opinion) complied
as to form in all material respects with the requirements of the Securities Act
and the Rules and Regulations, and the documents incorporated by reference in
the Base Prospectus and the Prospectus Supplement and any further amendment or
supplement to any such incorporated document made by the Company prior to the
Closing Date (other than the financial statements, related schedules, other
financial data and statistical data derived therefrom contained or referred to
therein, as to which we express no opinion), when they became effective or were
filed with the Commission, as the case may be, complied as to form in all
material respects with the requirements of the Securities Act or the Exchange
Act, as applicable, and the rules and regulations of the Commission thereunder.
13. The
Company is not, and after giving effect to the offering and sale of the Shares
and the application of the proceeds thereof as described in the Base Prospectus
and the Prospectus Supplement, will not be, subject to registration as an
“investment company” as defined in the
5
Investment Company Act of 1940, as amended, and the rules and
regulations of the Commission promulgated thereunder.
14. To
our knowledge, there are no agreements or instruments of a character which are
required to be filed as exhibits to the Registration Statement or incorporated
therein by reference that have not been so filed or incorporated by reference.
*****
In connection with the preparation of the Prospectus Supplement, we
have participated in conferences with officers and representatives of the
Company and the Company’s certified public accountants, as well as with the
Placement Agent and counsel to the Placement Agent. Although we have not independently verified, and accordingly,
except as otherwise set forth in paragraphs 2 and 10 above, are not
confirming and do not assume responsibility for the accuracy, completeness or
fairness of the statements contained in the Registration Statement, Base
Prospectus or Prospectus Supplement, on the basis of the foregoing, nothing has
come to our attention that has caused us to believe that the Registration
Statement, as of the Effective Date, contained any untrue statement of a
material fact or omitted to state any material fact required to be stated
therein or necessary in order to make the statements therein not misleading, or
that the Base Prospectus or the Prospectus Supplement contains any untrue
statement of a material fact or omits to state any material fact required to be
stated therein or necessary in order to make the statements therein, in light
of the circumstances under which they were made, not misleading; provided,
however, that we express no belief as to the financial statements, related
schedules, other financial or accounting data or statistical data derived
therefrom contained in the Registration Statement, the Base Prospectus or the
Prospectus Supplement.
This opinion is furnished to you as Placement Agent and is solely for
your benefit and may not be made available to or relied upon by any other
person, firm or entity without our prior written consent.
Very truly yours,
Cooley Godward llp
6
Exhibit A
PURCHASERS
Exhibit D-2
Legal Opinion of Sterne, Kessler, Goldstein
& Fox
March 26, 2004
SG Cowen Securities Corporation
1221 Avenue of the Americas
New York, New York 10020
Re: Vical Incorporated 3,379,000 Shares of
Common Stock
Dear Sirs:
We have acted as patent counsel
for Vical Incorporated, a Delaware corporation (the “Company”), in certain
Intellectual Property matters for which the sale by the Company has requested
consultation. This opinion is being
furnished pursuant to Section 6(d) of the Placement Agent Agreement, dated
March 23, 2004 (the “Placement Agent Agreement”), by and between the Company
and SG Cowen Securities Corporation.
All defined terms not defined herein shall have the meanings ascribed to
them in the Placement Agent Agreement.
We are familiar with the
technology used by the Company in its business and the manner of its use
thereof and we have read the Registration Statement, the Base Prospectus, the
Prospectus Supplement and the documents incorporated by reference therein,
under the captions “Risk Factors—Our patents and proprietary rights may not
provide us with any benefit and the patents of others may prevent us from
commercializing our products” and “Risk Factors—The legal proceedings to obtain
and defend patents, and litigation of third-party claims of intellectual
property infringement, could require us to spend money and could impair our
operations” and we have read the Company’s Annual Report on Form 10-K for
the year ended December 31, 2003, as filed with the Securities and
Exchange Commission on March 11, 2004, under the caption “Intellectual
Property” (collectively, the “Intellectual Property Sections”).
We are of the opinion that:
1. To
the best of our knowledge, the statements in the Intellectual Property Sections
are accurate and fair summaries of the legal matters referred to therein.
subject to the following. As we do not
represent the Company for all Intellectual Property matters referred to in the
Intellectual Property Sections, we cannot verify: 1) that the statements
concerning the number of pending patent applications, the number of issued
patents, and their expiration dates, are correct; and 2) that the statements
concerning Aventis Pasteur, the University of Texas, Merck & Co., Inc., the
University of Michigan, the Wisconsin Alumni Research Foundation (WARF), and
Corautus Genetics are correct.
Although, we have no reason to doubt the accuracy of the Company’s
statements.
2. To
the best of our knowledge, the Company owns or co-owns all patents, patent
applications and trademarks handled on behalf of the Company by our
firm, which are described in the Registration Statement, the Base Prospectus,
the Prospectus Supplement and the documents incorporated by reference therein
as being owned or co-owned by it.
3. Subject
to the following, to the best of our knowledge, there are no pending or
threatened actions, suits or proceedings against or affecting any patents,
patent applications, or trademarks (“Intellectual Property”) owned or used by
the Company or necessary to conduct the business now or proposed to be
conducted by it as described in the Registration Statement, the Base
Prospectus, the Prospectus Supplement and the documents incorporated by
reference therein, to which the Company is a party or to which any of the
properties of the Company is subject, except as disclosed in the Registration
Statement, the Base Prospectus, the Prospectus Supplement and the documents
incorporated by reference therein. The
Company has just received notice that European Patent EP1032428 has been
opposed. To the best of our knowledge,
the opposition documents were filed at the European Patent Office by one or
more opponent on March 17, 2004.
4. To
the best of our knowledge, the Company has not received any notice of
infringement or alleged infringement by the Company or conflict with asserted
rights of others with respect to any Intellectual Property, except as disclosed
in the Registration Statement, the Base Prospectus, the Prospectus Supplement
and the documents incorporated by reference therein.
5. To
the best of our knowledge, all pending patent applications handled on behalf of
the Company by our firm, referred to in the Registration Statement, the Base
Prospectus, the Prospectus Supplement and the documents incorporated by
reference therein have been duly and properly filed with the U.S. Patent and
Trademark Office.
6. Nothing
has come to our attention that causes us to believe that the Intellectual
Property Sections in the (a) Registration Statement or any amendment thereof,
at the time the Registration Statement became effective, contained any untrue
statement of material fact or omitted to state any material fact required to be
stated therein to make the statements therein not misleading, or (b) the Base Prospectus
or the Prospectus Supplement, as amended or supplemented as of their respective
dates and as of the date hereof, included any untrue statement of material fact
or omitted to state a material fact necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading.
With respect
to patents and patent applications discussed in the Registration Statement, the
Base Prospectus, the Prospectus Supplement and the documents incorporated by
reference therein that were filed and prosecuted by our firm, we have relied on
information provided to us by or on behalf of the named inventors concerning
matters such as their knowledge of prior art, the disclosure required to enable
others to make and use the respective inventions, and the best mode
contemplated by the named inventors for carrying out their respective
inventions. We have endeavored to notify the named inventors of their duty of
candor toward the U.S. Patent and Trademark Office, but we have not made, nor are
we in a position to make, an independent investigation of such technical
information provided to us by the inventors. In only a few instances was a
preliminary patentability search performed at or around the time the invention
was first disclosed to this firm, and those cases where such a search was
performed, it was only a
limited search. We make no
representations as to the completeness of these searches. No further search for
prior art references has been conducted at this time in connection with the
rendering of the present opinion. Relevant prior art references may exist which
could affect the patentability of the patents and patent applications described
in the Registration Statement, the Base Prospectus, the Prospectus Supplement
and the documents incorporated by reference therein. There is no assurance that
patents will ultimately be granted from these applications or that, if patents
are granted, they will ultimately be upheld in litigation if challenged or that
they will have commercially significant scope.
The
information provided in this letter is current as of the present date. We
assume no obligation to provide you with information that may hereafter be
brought to our attention, whether or not deemed material.
Very truly yours,