Document:

exv10w60

 

EXHIBIT 10.60

SUTTON HILL PROPERTIES, LLC

SIDE LETTER REGARDING EFFECTIVE DATE OF SALE

September 19, 2005

Sutton Hill Capital L.L.C.

120 N. Robertson Boulevard

Los Angeles, California 90048

			
	Re:	 	1001-1007 Third Avenue, New York, New York 10022

Dear Sirs:

Notwithstanding contrary dates appearing on the documents relating to the transfer of the leasehold
estate of the above property (the “Transaction”) listed on Schedule A to this letter, it is agreed
that the effective date of transfer is today.

It is also understood that the Installment Sale Note in connection with the Transaction shall also
be deemed executed and delivered as of today’s date, and that the payment of interest detailed in
the second paragraph thereof shall be amended accordingly, such that interest due on October 1,
2005 shall be decreased to $24,750.00, and all subsequent payments of interest shall remain
unchanged.

[THE REMAINDER OF THIS PAGE HAS BEEN LEFT INTENTIONALLY BLANK]

500 CITADEL DRIVE, SUITE 300, COMMERCE, CALIFORNIA 90040

 

 

SUTTON HILL PROPERTIES, LLC

By:                                                               

          S. Craig Tompkins

          President

CITADEL CINEMAS, INC.

By:                                                               

          S. Craig Tompkins

          Vice Chairman

READING INTERNATIONAL, INC.

By:                                                               

          S. Craig Tompkins

          Director — Business Affairs

ACKNOWLEDGED AND AGREED AS OF THE DATE FIRST ABOVE WRITTEN:

SUTTON HILL CAPITAL L.L.C.

	 	 	 	 	 
	 
	 	 	 	 
	By:
	 	 	 	 
	 

	 	 

James J. Cotter

Manager
	 	     

Page 2 of 3

 

SCHEDULE A

	 	 	 
	1.

	 	Contract of Sale between Sutton Hill Capital L.L.C. and Sutton Hill Properties, LLC
	 
	 	 
	2.

	 	Installment Note
	 
	 	 
	3.

	 	Guaranty by Reading International, Inc.
	 
	 	 
	4.

	 	Assignment and Assumption of Lease between Sutton Hill Capital L.L.C. and Sutton Hill
Properties, LLC
	 
	 	 
	5.

	 	License and Option Agreement between Sutton Hill Properties, LLC and Sutton Hill Capital
L.L.C.
	 
	 	 
	6.

	 	Second Amendment to Amended and Restated Master Operating Lease

Page 3 of 3exv10w1

 

Exhibit 10.1

7,650,000 Shares

GENVEC, INC.

Shares of Common Stock

($0.001 par value)

 

PLACEMENT AGENT AGREEMENT

September 20, 2005

SG Cowen & Co., LLC

1221 Avenue of the Americas

New York, New York 10020

Ladies and Gentlemen:

     GenVec, Inc., a Delaware corporation (the “Company”), pursuant to the terms of this Placement
Agent Agreement (this “Agreement”) and the Purchase Agreements in the form of Exhibit A
attached hereto (the “Purchase Agreements”) entered into with the purchasers identified therein
(each a “Purchaser” and, collectively, the “Purchasers”), proposes to sell to the Purchasers an
aggregate of 7,650,000 shares of Common Stock, par value $0.001 per share, together with associated
stock purchase rights (the “Common Stock”) of the
Company. The aggregate of 7,650,000 shares of
Common Stock so proposed to be sold by the Company is hereinafter referred to as the “Stock.” The
Company hereby confirms its agreement with SG Cowen & Co., LLC (“SG Cowen” or the “Placement
Agent”) as follows (certain terms herein are defined in Section 13 hereof):

Section 1. Agreement To Act As Placement Agent. 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”). Until the Closing Date, the Company shall not, without the prior consent of
the Placement Agent, solicit or accept offers to purchase 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 agent of the Company 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.

 

 

     (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 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, without 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 Purchase Agreements by each of the parties thereto.

     (e) As compensation for services rendered, on the Closing Date (as defined below) the
Company shall pay or cause to be paid to the Placement Agent by wire transfer of immediately
available funds to an account or accounts designated by the Placement Agent, an amount equal
to six percent (6%) of the aggregate gross proceeds received by the Company from the sale of
the Stock on such Closing Date.

     (f) No Stock which the Company shall have 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 therefor by such
Purchaser. If the Company shall default in its obligation to deliver Stock to a Purchaser
whose offer has been 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.

Section 2. Representations and Warranties of the Company. The Company represents and
warrants to, and agrees with, the Placement Agent and the Purchasers that:

2

 

     (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 S-3 (Registration File No. 333-123968), which became effective as of April 28, 2005
(the “Registration Statement”) for the registration under the Securities Act of the Stock.
The Registration Statement meets the requirements set forth in Rule 415(a)(1)(x) under the
Securities Act, and complies in all material respects with such Rule. The Company will file
with the Commission pursuant to Rule 424(b) under the Securities Act, and the rules and
regulations (the “Rules and Regulations”) of the Commission promulgated thereunder,
supplements 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 provided the
Placement Agent with copies of such supplement. The Registration Statement, including the
exhibits thereto, as amended at the date of this Agreement, is hereinafter called the
“Registration Statement”; the prospectus relating to the Stock to be sold by the Company in
the form in which it appears in the Registration Statement is hereinafter called the “Base
Prospectus”; and the supplemented form of a prospectus, in the form in which it will be
filed with the Commission pursuant to Rule 424(b) (including the Base Prospectus, as so
supplemented) is hereinafter called the “Prospectus Supplement.” Any reference 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 dates 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 further documents to be filed with the
Commission) contains all exhibits and schedules as required by the Securities Act. 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

3

 

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 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. The Base Prospectus and 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 Regulations, and none of such 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 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 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 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, the Prospectus Supplement, the Registration Statement, copies of
the documents incorporated by reference therein and any other materials permitted by the
Securities Act.

4

 

     (d) The Company has been duly organized and is validly existing as a corporation in
good standing (or the equivalent thereof, if any) under the laws of its
jurisdiction of incorporation, is duly qualified to do business and is in good standing
(or the equivalent thereof, if any) as a foreign corporation in each jurisdiction in which
its ownership or lease of property or the conduct of its business requires such
qualification, and has all power and authority necessary to own or hold its properties and
to conduct the businesses 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 (financial or otherwise),
results of operations, business, properties or prospects of the Company taken as a whole (a
“Material Adverse Effect”).

     (e) The Stock to be issued and sold by the Company hereunder and under the Purchase
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 in all
materials respects to the description thereof contained in the Base Prospectus and the
Prospectus Supplement.

     (f) The Company has an authorized and outstanding capitalization as set forth in the
Base Prospectus and the Prospectus Supplement, all of the issued and outstanding shares of
capital stock of the Company have been duly and validly authorized and issued, are fully
paid and non-assessable, have been issued in compliance with federal and state securities
laws, and conform to the description thereof contained in the Base Prospectus and the
Prospectus Supplement. None of the outstanding shares of Common Stock was issued in
violation of any preemptive rights, rights of first refusal or other similar rights to
subscribe for or purchase securities of the Company. There are no authorized or outstanding
options, warrants, preemptive rights, rights of first refusal or other rights to purchase,
or equity or debt securities convertible into or exchangeable or exercisable for, any
capital stock of the Company that has 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 Company has the full right, power and authority to enter into this Agreement,
the Purchase Agreements and the Escrow Agreement dated as of the date herewith by and
between the Company and the escrow agent thereto (the “Escrow Agreement”) and to perform and
to discharge its obligations hereunder and thereunder; and each of this Agreement and the
Purchase 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.

     (h) The execution, delivery and performance of this Agreement, the Purchase Agreements
and the Escrow Agreement by the Company and the consummation of the

5

 

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
material 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, nor will such actions result in any
violation of, the provisions of the charter or by-laws of the Company, any statute, law,
rule or regulation applicable to the Company or any judgment, order or decree of any court
or governmental agency or body having jurisdiction over the Company or any of its properties
or assets.

     (i) 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; and all statements summarizing any
such franchises, contracts, leases, instruments or other documents or legal matters
contained in the Registration Statement are accurate and complete in all material respects.
Other than as described in the Base Prospectus and the Prospectus Supplement, no material
contract has been suspended or terminated for convenience or default by the Company or any
of the other parties thereto, the Company has not sent or received any communication
regarding intent not to renew any such material contract, and the Company has not received
notice or any other knowledge of any such pending or threatened suspension, termination or
non-renewal, except for such pending or threatened suspensions, terminations or non-renewals
that would not reasonably be expected to, singularly or in the aggregate, have a Material
Adverse Effect.

     (j) All existing minute books of the Company since January 1, 2002, including all
existing records of all meetings and actions of the board of directors (including, Audit,
Compensation, Nomination/Corporate Governance and other board committees) and stockholders
of the Company 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
transactions, agreements or other actions of the Company that are not properly approved
and/or recorded in the Corporate Records.

     (k) 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 Purchase Agreements and the Escrow Agreement, except such as
have been obtained or made under the Securities Act or the Exchange Act and such as may be
required by 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.

     (l) The Common Stock is registered pursuant to Section 12(g) of the Exchange Act and is
listed on the Nasdaq National Market, and the Company has taken no action designed to
terminate, or reasonably likely to have the effect of terminating, the

6

 

registration of the
Common Stock under the Exchange Act or delisting the Common Stock from the Nasdaq National
Market, and the Company has received no written notice
from Nasdaq relating to the delisting of the Common Stock on the Nasdaq National
Market. The Company has filed, or promptly following the execution of this Agreement will
file, a Notification Form for Listing of Additional Shares with the Nasdaq National Market
with respect to the Stock.

     (m) Except as described in the Base Prospectus and the Prospectus Supplement, (i) no
person has the right, contractual or otherwise, to cause the Company to issue or sell to it
any shares of Common Stock or shares of any other capital stock or other equity interests of
the Company, (ii) no person has any preemptive rights, resale rights, rights of first
refusal or other rights to purchase any shares of Common Stock or shares of any other
capital stock or other securities of the Company, except persons who have waived said rights
or who have been given timely and proper notice and have failed to exercise such rights and
(iii) except as provided herein, no person has the right to act as an underwriter, placement
agent or financial advisor to the Company in connection with and as a result of the offer
and sale of the Stock, in the case of each of the foregoing clauses (i), (ii) and (iii),
whether as a result of the filing or effectiveness of the Registration Statement or the sale
of the Stock as contemplated thereby or otherwise. Except as described in the Base
Prospectus and the Prospectus Supplement, no person has the right, contractual or otherwise,
to cause the Company to register under the Securities Act any shares of Common Stock or
shares of any other capital stock or other securities of the Company, or to include any such
shares or interests in the Registration Statement or the offering contemplated thereby,
whether as a result of the filing or effectiveness of the Registration Statement or the sale
of the Stock as contemplated thereby 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 for a period of
at least 90 days after the date hereof.

     (n) As of the dates specified, the consolidated financial statements of the Company,
together with related notes and schedules, included or incorporated by reference in the
Registration Statement, the Base Prospectus or the Prospectus Supplement complied and will
comply in form in all material respects with Regulation S-X promulgated by the Commission
with respect thereto. Such financial statements and related notes and schedules have been
prepared in accordance with United States generally accepted accounting principles,
consistently applied, during the period involved (except (i) as may be otherwise indicated
in such financial statements or notes thereto, or (ii) in the case of unaudited interim
statements, to the extent they may not include footnotes or may be condensed or summary
statements) and fairly present in all material respects the consolidated financial position
of the Company as of the dates thereof and its results of operations and cash flows for the
periods then ended (subject, in the case of unaudited statements, to normal year-end audit
adjustments).

7

 

     (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 is required to be described in the
Base Prospectus or the Prospectus Supplement and is not described therein, or which,
singularly or in the aggregate, if determined adversely to the Company would reasonably be
expected to have a Material Adverse Effect or would prevent or materially and 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) Except as described in the Registration Statement, the Base Prospectus and the
Prospectus Supplement, the Company has good and marketable title to all property (real and
personal), free and clear of any claim, lien, encumbrance, security interest, defect or
restriction upon voting or transfer or any other claim of any kind (“Liens”), except for
those Liens that do not materially interfere with the use made or proposed to be made of
such property by the Company or that would not have a Material Adverse Effect.

     (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, as applicable, (including, without limitation, those administered by
the Food and Drug Administration of the U.S. Department of Health and Human Services (the
“FDA”) or by any foreign, federal, state or local governmental or regulatory authority
performing functions similar to those performed by the FDA), except, with respect to clauses
(ii) and (iii), any violations or defaults which, singularly or in the aggregate, would not
have a Material Adverse Effect.

     (r) The Company does not have any employee benefit “plan” as defined in Section 3(3) of
the United States Employee Retirement Income Security Act of 1974 (“ERISA”), that is subject
to Section 302 of ERISA or Title IV of ERISA.

     (s) The Company carries, or is covered by, insurance in such amounts and covering such
risks as it reasonably believes is adequate for the conduct of its businesses and the value
of its properties and as is customary for companies engaged in similar businesses in similar
industries.

     (t) 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

8

 

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 the Company has not received any actual
notice of any proceeding relating to revocation or modification of any such Permit, except
as described in the Base Prospectus and the Prospectus Supplement; and the Company is in
compliance in all material respects with all laws and regulations relating to the conduct of
its business as conducted as of the date hereof.

     (u) KPMG LLP, who have certified certain financial statements of the Company and
delivered their report with respect to the audited financial statements and schedules
included in the Base Prospectus, the Prospectus Supplement or the Registration Statement, or
incorporated by reference therein, as the case may be, are independent registered public
accountants with respect to the Company within the meaning of the Securities Act and the
Rules and Regulations.

     (v) 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, 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,
except as set forth in the Base Prospectus and the Prospectus Supplement.

     (w) 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 in all material
respects. 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 controls. The Company is otherwise in compliance in all material
respects with all applicable effective provisions of the Sarbanes-Oxley Act and the rules
and regulations promulgated by the Commission with respect thereto.

9

 

     (x) The Company maintains a system of internal accounting controls sufficient to
provide reasonable assurance that (i) transactions are executed in accordance with
management’s general or specific authorizations; (ii) transactions are recorded as necessary
to permit preparation of financial statements in conformity with generally accepted
accounting principles and to maintain accountability of assets; (iii) access to assets is
permitted only in accordance with management’s general or specific authorization; and (iv)
the recorded accountability for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any differences.

     (y) The Company (i) is in compliance in all material respects with any and all
applicable foreign, federal, state and local laws and regulations relating to the protection
of human health and safety, the environment or hazardous or toxic substances or wastes,
pollutants or contaminants (“Environmental Laws”), (ii) has received and is in compliance
with all permits, licenses or other approvals required of it under applicable Environmental
Laws to conduct its business and (iii) has not received notice of any actual or potential
liability for the investigation or remediation of any disposal or release of hazardous or
toxic substances or wastes, pollutants or contaminants, except where such non-compliance
with Environmental Laws, failure to receive required permits, licenses or other approvals,
or liability would not, individually or in the aggregate, have a Material Adverse Effect,
whether or not arising from transactions in the ordinary course of business, except as set
forth in or contemplated by the Base Prospectus and the Prospectus Supplement.

     (z) Except as described in the Base Prospectus and the Prospectus Supplement, the
Company owns, is licensed to use or otherwise possesses adequate right to use the patents,
patent rights, licenses, inventions, trademarks, service marks, trade names, copyrights and
know-how, including trade secrets and other unpatented and/or unpatentable proprietary or
confidential information, systems, processes or procedures (collectively, the “Intellectual
Property”) reasonably necessary to carry on the business conducted by it, except to the
extent that the failure to own, be licensed to use or otherwise possess adequate rights to
use such Intellectual Property would not reasonably be expected to have a Material Adverse
Effect; except as described in the Base Prospectus and the Prospectus Supplement, the
Company has not received any notice of infringement of or conflict with, and the Company has
no knowledge of any infringement of or conflict with, asserted rights of others with respect
to its Intellectual Property which could reasonably be expected to result in a Material
Adverse Effect; except as described in the Base Prospectus and the Prospectus Supplement,
the discoveries, inventions, products or processes of the Company referred to in the Base
Prospectus and the Prospectus Supplement do not, to the knowledge of the Company, infringe
or conflict with any right or patent of any third party, or any discovery, invention,
product or process which is the subject of a patent application filed by any third party,
which infringement or conflict could reasonably be expected to have a Material Adverse
Effect; except as described in the Base Prospectus and the Prospectus Supplement, the
Company is not obligated to pay a royalty, grant a license or provide other consideration to
any third party in connection with its patents, patent rights, licenses, inventions,
trademarks, service

10

 

marks, trade names, copyrights and know-how; and no third party, including any academic
or governmental organization, possesses rights to the Intellectual Property which, if
exercised would reasonably be expected to have a Material Adverse Effect.

     (aa) Since the respective dates as of which information is given in the Base Prospectus
and the Prospectus Supplement, the studies, tests and preclinical and clinical trials
conducted by or on behalf of the Company that are described in the Base Prospectus and the
Prospectus Supplement were and, if still pending, are being conducted in all material
respects in accordance with experimental protocols, procedures and controls pursuant to,
where applicable, accepted professional scientific standards; the descriptions of the
results of such studies, tests and trials contained in the Base Prospectus and the
Prospectus Supplement are accurate in all material respects; except as described in the Base
Prospectus and the Prospectus Supplement, the Company has not received any notices or
correspondence from the FDA or any foreign, state or local governmental body exercising
comparable authority requiring the termination, suspension or material modification of any
studies, tests or preclinical or clinical trials conducted by or on behalf of the Company
which termination, suspension or material modification would reasonably be expected to have
a Material Adverse Effect.

     (bb) The Company has not failed to file with the applicable regulatory authorities
(including, without limitation, the FDA or any foreign, federal, state or local governmental
or regulatory authority performing functions similar to those performed by the FDA) any
filing, declaration, listing, registration, report or submission; all such filings,
declarations, listings, registrations, reports or submissions were in compliance 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.

     (cc) 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 by the Securities Act to be described in the Base
Prospectus and the Prospectus Supplement which is not so described.

     (dd) The Company is not nor, 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 it become an “investment company” as defined in the Investment
Company Act of 1940, as amended.

     (ee) 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.

11

 

     (ff) Other than as contemplated 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.

     (gg) 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 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.

     (hh) Except as set forth in or as otherwise contemplated by the Registration Statement,
the Base Prospectus or the Prospectus Supplement, subsequent to the respective dates as of
which information is given in the Registration Statement, the Base Prospectus and the
Prospectus Supplement, there has not been (i) any Material Adverse Effect, or any
development that would reasonably be expected to result in a material adverse change, in the
business, properties, management, financial condition or results of operations of the
Company taken as a whole, (ii) any transaction which is material to the Company taken as a
whole, (iii) any obligation, direct or contingent (including any off-balance sheet
obligations), incurred by the Company outside the ordinary course of business, which is
material to the Company taken as a whole, (iv) any change in the capital stock (other than
the issuance of shares of Common Stock upon the exercise of stock options and warrants
disclosed as outstanding in the Registration Statement, the Base Prospectus and the
Prospectus Supplement and the grant of options under existing stock option plans described
in the Registration Statement, the Base Prospectus and the Prospectus Supplement) or
outstanding indebtedness of the Company or (v) any dividend or distribution of any kind
declared, paid or made on the capital stock of the Company.

     (ii) Any statistical and market-related data included in the Registration Statement,
the Base Prospectus or the Prospectus Supplement are based on or derived from sources that
the Company believes to be reliable and accurate.

     (jj) The Stock is registered under the Exchange Act and is duly listed on the Nasdaq
National Market (“Nasdaq”) and the Company has taken no action designed to terminate, or
reasonably 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.

     (kk) The Company nor any of its officers, directors or affiliates has taken or will
take, directly or indirectly, any action designed or intended to stabilize or manipulate the
price of any security of the Company, 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.

12

 

     (ll) The Company nor any of its officers, directors or affiliates has offered, or
caused any Placement Agent to offer, Stock to any person with the intent to influence
unlawfully (i) a customer or supplier of the Company to alter the customer’s or supplier’s
level or type of business with the Company, or (ii) a trade journalist or publication to
write or publish favorable information about the Company or any of its respective products
or services.

     (mm) There are no affiliations with the NASD among the Company’s officers, directors
or, to the best of the Company’s knowledge, 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.

     (nn) The Company satisfies the pre-1992 eligibility requirements for the use of a
Registration Statement on Form S-3 in connection with the Offering contemplated thereby (the
pre-1992 eligibility requirements for the use of the Registration Statement on Form S-3
include (i) having a non-affiliate, public common equity float of at least $150 million or a
non-affiliate, public common equity float of at least $100 million and annual trading volume
of at least three million shares and (ii) having been subject to the Exchange Act reporting
requirements for a period of 36 months).

     (oo) No approval of the stockholders of the Company under the rules and regulations of
any trading market (including Rule 4350 of the Nasdaq National Marketplace Rules), and no
approval of the stockholders of the Company thereunder is required for the Company to issue
and deliver to the Purchasers the Stock, including such as may be required pursuant to Rule
4350 of the Nasdaq National Marketplace Rules.

     (pp) The Company has no subsidiaries.

     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 each of the Purchasers as to the matters covered thereby.

Section 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
10:00 A.M., local time, on September 26, 2005 (the “Closing Date”) at the office of Arnold & Porter
LLP, 555 Twelfth Street, NW, Washington, DC 20004

Section 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 without
the consent of the Placement Agent, which consent shall not be unreasonably withheld; (ii)
for so long as the delivery of a prospectus is required in

13

 

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 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 commercially practicable 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 dates 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 for so
long as the delivery of a prospectus is required in connection with the offering or sale of
Stock, (x) of any request by the Commission to amend the Registration Statement or to amend
or supplement the Prospectus Supplement or for additional information related thereto 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, of the institution or threatening of any proceeding for any such
purpose, or of any request by the Commission for the amending or supplementing of the
Registration Statement or Prospectus Supplement or for additional information related
thereto; 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 commercially reasonable best efforts to obtain the
withdrawal of such order.

     (b) To comply with the Securities Act and the Exchange Act, and the Rules and
Regulations, 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 the 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 are 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.

14

 

     (c) To deliver promptly to the Placement Agent such number of the following documents
as the Placement Agent shall reasonably request: (i) the Base Prospectus, (ii) 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 (iii) 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.

     (d) 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 Company 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).

     (e) 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.

     (f) Not to directly or indirectly offer, sell, assign, transfer, pledge, contract to
sell, or otherwise dispose of any share of Common Stock or securities convertible into or
exercisable or exchangeable for Common Stock for a period of ninety (90) days from the date
of the Prospectus Supplement without the prior written consent of SG Cowen, other than (i)
the Company’s sale of the Stock and shares or options to purchase shares pursuant to
qualified stock option plans, currently outstanding options, warrants or rights and (ii)
securities issued to a collaborative partner of the Company solely in connection with a
corporate partnering transaction approved by the Board of Directors of the Company;
provided, however, that before issuing any shares to a collaborative partner, the Company
shall obtain from such collaborative partner an agreement to be bound by a letter
substantially in the form of Exhibit B, pursuant to which such collaborative partner
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 the Lock-Up Period (as defined in the form
of agreement attached as Exhibit B hereto), without the prior written consent of the
Placement Agent. The Company will cause each of its executive officers and directors to

15

 

furnish to the Placement Agent, at the Execution Time, a letter, substantially in the
form of Exhibit B 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 the Lock-Up Period (as defined in the form
of agreement attached as Exhibit B hereto) without the prior written consent of the
Placement Agent. 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(f) 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.

     (g) Prior to the Closing Date, to furnish to the Placement Agent, as soon as they have
been prepared, copies of any unaudited interim consolidated financial statements of the
Company for any periods subsequent to the periods covered by the financial statements
appearing or incorporated by reference in the Base Prospectus, the Prospectus Supplement or
the Registration Statement.

     (h) 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.

     (i) To apply the net proceeds from the sale of the Stock as set forth in the Prospectus
Supplement under the heading “Use of Proceeds.”

     (j) To maintain, at its expense, a registrar and transfer agent for the Stock.

     (k) 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).

     (l) 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.

     (m) To use commercially reasonably efforts as requested to permit the Stock to be
continued to be quoted on the Nasdaq National Market at the Closing Date.

16

 

Section 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 fees and 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(e) and of
preparing, printing and distributing Blue Sky Memoranda (including related fees and expenses of
counsel to the Placement Agent); (g) all fees and expenses of the registrar and transfer agent of
the Stock; (h) reasonable fees and expenses of counsel for the Placement Agent not to exceed
$100,000 without the Company’s prior written consent; and (i) 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.

Section 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 and disclosed to the Company on or
prior to the Closing Date that the Registration Statement, the Base Prospectus or the
Prospectus Supplement or any 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 not misleading.

17

 

     (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) Arnold & Porter LLP,
corporate counsel for the Company and (ii) Leydig, Voit & Mayer, Ltd, intellectual property
counsel for the Company, such counsel’s written opinion, addressed to the Placement Agent
and the Purchasers and dated as of the Closing Date, in form and substance reasonably
satisfactory to the Placement Agent as set forth in Exhibits C-1 and C-2
attached hereto, respectively.

     (e) The Company’s corporate counsel shall also have furnished to the Placement Agent a
written statement, addressed to the Placement Agent and the Purchasers and dated the Closing
Date, in form and substance satisfactory to the Placement Agent, to the effect that (x) such
counsel has acted as counsel to the Company in connection with the preparation of the
Registration Statement, (y) based on such counsel’s examination of the Registration
Statement and such counsel’s investigations made in connection with the preparation of the
Registration Statement and conferences with certain officers and employees of and with
auditors for and counsel to the Company, such counsel has no reason to believe that (I) the
Registration Statement, as of its 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 contain 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 or (II) any document incorporated by reference in the Base Prospectus or the
Prospectus Supplement or any further amendment or supplement to any such incorporated
document made by the Company prior to the Closing Date, when they became effective or were
filed with the Commission, as the case may be, contained, in the case of a registration
statement which became effective under the Securities Act, 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, in the case of other
documents which were filed under the Exchange Act with the Commission, any untrue statement
of a material fact or omitted to state any material fact necessary in order to make the
statements therein, in light of the circumstances under which they were made, not
misleading; it being understood that such counsel need express no opinion as to the
financial statements or other financial data contained in the Registration Statement, the
Base Prospectus or the Prospectus Supplement.

18

 

     (f) 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 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.

     (g) 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 its
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 not misleading, (ii) since the effective
dates 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 could 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 taken as a whole,
except as set forth in the Base Prospectus and the Prospectus Supplement, and (v) the
Registration Statement became effective as of April 28, 2005, and to the best of their
knowledge, as of the Closing Date (I) no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that purpose have been
commenced or are pending before or are contemplated by the Commission and (II) no action has
been taken by any governmental agency, body or official, and no injunction, restraining
order or order of any nature by any federal or state court has been issued, which would
prevent the sale and issuance of the Stock.

     (h) At the time 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 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 (ii) stating the conclusions and
findings 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.

19

 

     (i) 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 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 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(h).

     (j) 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, otherwise than as set forth in or contemplated by
the Base Prospectus and the Prospectus Supplement, the effect of which, in any such case
described in clause (i) or (ii), is, in the judgment of the Placement Agent, so material and
adverse as to make it impracticable or inadvisable to proceed with the sale or delivery of
the Stock on the terms and in the manner contemplated by the Base Prospectus and the
Prospectus Supplement.

     (k) The Stock is registered under the Exchange Act and, as of the Closing Date, the
Stock shall be listed and authorized for trading on the Nasdaq National Market.

     (l) At the Execution Time, the Placement Agent shall have received a letter
substantially in the form of Exhibit B hereto from each executive officer and
director of the Company and certain affiliated entities of HealthCare Ventures LLC.

     (m) 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 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, 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

20

 

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.

     (n) 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 or potentially and adversely affect the business or operations of the Company; and no
injunction, restraining order or order of any other nature by any federal or state court of
competent jurisdiction shall have been issued as of the Closing Date which would prevent the
issuance or sale of the Stock or materially and adversely affect or potentially and
adversely affect the business or operations of the Company.

     (o) Not more than one Business Day after the Execution Time, 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.

     (p) The Company shall have entered into Purchase Agreements with each of the Purchasers
and such agreements shall be in full force and effect.

     (q) 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.

     (r) The Company, the Placement Agent and Brown Raysman Millstein Felder & Steiner LLP
shall have entered into the Escrow Agreement and such agreement shall be in full force and
effect.

     (s) All preemptive rights, rights of first refusal, demand registration rights or other
similar rights in connection with the Offering shall have been waived by the holders at such
rights.

     All opinions, letters, evidence and certificates mentioned above or elsewhere in this
Agreement shall be deemed to be in compliance with the provisions hereof only if they are in form
and substance reasonably satisfactory to counsel for the Placement Agent.

Section 7. Indemnification and Contribution.

     (a) The Company shall indemnify and hold harmless the Placement Agent, its members,
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

21

 

respect thereof, to which the 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 or is based upon (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 and (ii) the omission or
alleged omission to state in the 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, 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 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 “Indemnified
Parties” and each a “Indemnified Party”) against any loss, claim, damage or liability, joint
or several, or any action in respect thereof, to which the Indemnified Parties may become
subject, under the Securities Act or otherwise, insofar as such loss, claim, damage,
liability or action arises out of or is based upon (i) any untrue statement or alleged
untrue statement of a material fact contained in the Base Prospectus, the Registration
Statement or the Prospectus Supplement or in any amendment or supplement thereto or (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 the Placement Agent specifically for use therein, and shall reimburse the
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 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

22

 

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 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), together with any amounts owed or indebted
under Section 7(d), 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 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, by the Company if the
indemnified parties under this Section 7 consist of any Indemnified Parties. Each
indemnified party, as a condition of the indemnity agreements contained in

23

 

Sections 7(a) and 7(c) shall use all reasonable efforts to cooperate
with the indemnifying party in the defense of any such action or claim. Subject to the
provisions of Section 7(d) below, no indemnifying party shall be liable for any settlement,
compromise or consent to the entry of judgment in connection with any such action effected
without its written consent (which consent shall not be unreasonably withheld), but if
settled with its written consent or if there be a final judgment for the plaintiff in any
such action (other than a judgment entered with the consent of such indemnified party), the
indemnifying party agrees to indemnify and hold harmless any indemnified party from and
against any loss or liability by reason of such settlement or judgment.

     (d) If at any time an indemnified party shall have requested that an indemnifying party
reimburse the indemnified party for fees and expenses of counsel, such indemnifying party
agrees that it shall be liable for any settlement of the nature contemplated by this
Section 7 effected without its written consent if (i) such settlement is entered
into more than 60 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 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, 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)

24

 

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 total compensation
received by such Placement Agent in accordance with Section 1(e) less the amount of
any damages which such Placement Agent has otherwise paid or become liable to pay by reason
of any untrue or alleged untrue statement or omission or alleged omission. No person guilty
of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation.

Section 8. Termination. The obligations of the Placement Agent and the Purchasers
hereunder and under the Purchase 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(j) or 6(m) have occurred or if the Purchasers shall decline to purchase
the Stock for any reason permitted under this Agreement or the Purchase Agreements.

Section 9. Reimbursement of 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 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 the Placement Agent.

Section 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 and 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 indemnities of the Placement Agent shall also be for the benefit of
the 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.

25

 

Section 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 made by them respectively, pursuant to
this Agreement, shall remain in full force and effect, regardless of any investigation made by or
on behalf of the Placement Agent, the Company, and the Purchasers or any person controlling any of
them and shall survive delivery of and payment for the Stock.

Section 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 & Co., LLC, 1221 Avenue of the Americas, New York, New York 10020,
Attention: Veronica Iuliano (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 GenVec, Inc., 65 West Watkins Mill Road, Gaithersburg, MD 20878, Attention:
Jeffrey W. Church, CFO (Fax: (240) 632-0735), with a copy to: Arnold & Porter, LLP, 555
Twelfth St., NW, Washington, DC 20004, Attention: Richard E. Baltz (Fax: 202-942-5999).

Section 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 knowledge of the Company” or “to the Company’s knowledge” and words of similar import
shall mean that which the Company’s senior management knows or should have known using the exercise
of reasonable due diligence.

Section 14. Governing Law. This Agreement shall be governed by and construed in accordance
with the 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.

26

 

Section 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.

Section 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.

Section 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.

Section 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.

[Signature Pages Follow]

27

 

     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.

	 	 	 	 	 
	 	Very truly yours,

GENVEC, INC.

	 
	 	By:  	/s/
Jeffrey W. Church 	 
	 	 	Name:  	Jeffrey W. Church 	 
	 	 	Title:  	Chief Financial Officer, Treasurer and Corporate
Secretary	 
	 

Accepted as of

the date first above written:

	 	 	 	 	 
	SG COWEN & CO., LLC

	 	 
	By:  	/s/
Richard E. Gormley	 	 
	 	Name:  	Richard E. Gormley	 	 
	 	Title:  	Managing Director	 	 
	 

28

 

Exhibit A

Form of Purchase Agreements

29

 

Exhibit B

Form of Lock-Up Agreement

30

 

Exhibit C-1

Form of Corporate Counsel Opinion

31

 

Exhibit C-2

Form of IP Counsel Opinion

32

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