NEOSE TECHNOLOGIES, INC.
1,250,000 Shares of Common Stock, $0.01 par value per share
FORM OF PLACEMENT AGENCY AGREEMENT
January , 1997
Vector Securities International, Inc.
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As Placement Agent
Dear Sir or Madam:
Neose Technologies, Inc., a Delaware corporation (the "Company"), proposes
to issue and sell 1,250,000 shares (the "Shares") of common stock, par value
$.01 per share (the "Common Stock"), to certain investors (collectively, the
"Investors"). The Company desires to engage you as its placement agent (the
"Placement Agent") in connection with such issuance and sale. The Common Stock,
is more fully described in the Registration Statement (as hereinafter defined).
The Company hereby confirms as follows its agreements with the Placement
Agent.
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, the Placement Agent agrees to act as the Company's exclusive
placement agent in connection with the issuance and sale, on a best efforts
basis, by the Company of the Shares to the Investors. The Company shall pay to
the Placement Agent ____% of the proceeds received by the Company from the sale
of the Shares as set forth on the cover page of the Prospectus (as hereinafter
defined).
2. Delivery and Payment. Concurrently with the execution and delivery of
this Agreement, the Company, the Placement Agent, and Citibank N.A., as escrow
agent (the "Escrow Agent"), shall enter into an Escrow Agreement substantially
in the form of Exhibit A attached hereto (the "Escrow Agreement"), pursuant to
which an escrow account will be established, at the Company's expense, for the
benefit of the Investors (the "Escrow Account"). Prior to the Closing Date
(defined below), (i) each of the Investors will deposit an amount equal
to the price per Share as shown on the cover page of the Prospectus (as
hereinafter defined) multiplied by the number of Shares purchased by it in the
Escrow Account, and (ii) the Escrow Agent will notify the Company and the
Placement Agent in writing whether the Investors have deposited in the Escrow
Account funds in the amount equal to the proceeds of the sale of all of the
Shares offered hereby (the "Requisite Funds") into the Escrow Account. At 10:00
a.m., New York City time, on January , 1997, or at such other time on such other
date as may be agreed upon by the Company and the Placement Agent but in no
event prior to the date on which the Escrow Agent shall have received all of the
Requisite Funds (such date is hereinafter referred to as the "Closing Date"),
the Escrow Agent will release the Requisite Funds from the Escrow Account for
collection by the Company and the Placement Agent as provided in the Escrow
Agreement and the Company shall deliver the Shares to the Investors, which
delivery may be made through the facilities of the Depository Trust Company. The
closing (the "Closing") shall take place at the office of Stroock & Stroock &
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Closing shall be deemed to have occurred simultaneously.
Certificates evidencing the Shares shall be in definitive form and shall be
registered in such names and in such denominations as the Placement Agent shall
request by written notice to the Company. For the purpose of expediting the
checking and packaging of certificates for the Shares, the Company agrees to
make such certificates available for inspection at least 24 hours prior to
delivery to the Investors.
3. Representations and Warranties of the Company. The Company represents
and warrants and covenants to the Placement Agent that:
(a) A registration statement (Registration No. 333-_______) on Form S-1
relating to the Shares, including a preliminary prospectus relating to the
Shares and such amendments to such registration statement as may have been
required to the date of this Agreement, has been prepared by the Company, under
the provisions of the Securities Act of 1933, as amended (the "Act"), and the
rules and regulations (collectively referred to as the "Rules and Regulations")
of the Securities and Exchange Commission (the "Commission") thereunder, and has
been filed with the Commission. The Commission has not issued any order
preventing or suspending the use of the Prospectus or the Preliminary Prospectus
(as defined below). The term "Preliminary Prospectus" as used herein means a
preliminary prospectus relating to the Shares as contemplated by Rule 430 or
Rule 430A ("Rule 430A") of the Rules and Regulations included at any time as
part of the registration statement. Copies of such registration statement and
amendments and of each related Preliminary Prospectus have been delivered to the
Placement Agent. If such registration statement has not become effective, a
further amendment to such registration statement, including a form of final
prospectus, necessary to permit such registration statement to become effective
will be filed promptly by the Company with the Commission. If such registration
statement has become effective, a final prospectus relating to the Shares
containing information permitted to be omitted at the time of effectiveness by
Rule 430A will be filed by the Company with the Commission in accordance with
Rule 424(b) of the Rules and Regulations promptly after execution and delivery
of this
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Agreement. The term "Registration Statement" means the registration statement as
amended at the time it becomes or became effective (the "Effective Date"),
including all material incorporated by reference therein and any information
deemed to be included by Rule 430A. The term "Prospectus" means the prospectus
relating to the Shares as first filed with the Commission pursuant to Rule
424(b) of the Rules and Regulations or, if no such filing is required, the form
of final prospectus relating to the Shares included in the Registration
Statement at the Effective Date, in either case, including all material, if any,
incorporated by reference therein.
(b) On the date that any Preliminary Prospectus was filed with the
Commission, the date the Prospectus is first filed with the Commission pursuant
to Rule 424(b) (if required), at all times subsequent to and including the
Closing Date and when any post-effective amendment to the Registration Statement
becomes effective or any amendment or supplement to the Prospectus is filed with
the Commission, the Registration Statement, each Preliminary Prospectus and the
Prospectus (as amended or as supplemented if the Company shall have filed with
the Commission any amendment or supplement thereto), including the financial
statements included in the Prospectus, did or will comply with all applicable
provisions of the Act and the Rules and Regulations and did or will contain all
statements required to be stated therein in accordance with the Act and the
Rules and Regulations. On the Effective Date and when any post-effective
amendment to the Registration Statement becomes effective, no part of the
Registration Statement or any such amendment did or will contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements therein not
misleading. At the Effective Date, at the date the Prospectus or any amendment
or supplement to the Prospectus is filed with the Commission and at the Closing
Date the Prospectus did not or will not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading. The Company has not distributed any offering material in connection
with the offering or sale of the Common Stock, other than the Registration
Statement, the Preliminary Prospectus and the Prospectus.
(c) The Company is, and at the Closing Date will be, duly organized,
validly existing and in good standing under the laws of Delaware. The Company
has, and at the Closing Date will have, full power and authority to conduct all
the activities conducted by it, to own or lease all the assets owned or leased
by it and to conduct its business as described in the Registration Statement and
the Prospectus (or, if the Prospectus is not in existence, in the most recent
Preliminary Prospectus). The Company is, and at the Closing Date will be, duly
licensed or qualified to do business and in good standing as a foreign
organization in all jurisdictions in which the nature of the activities
conducted by it or the character of the assets owned or leased by it makes such
licensing or qualification necessary, except where the failure to be so licensed
or qualified will not have a material adverse effect on the ability of the
Company or its Subsidiaries to carry on its business as presently conducted.
Except as disclosed or incorporated by reference into the Registration
Statement, the Company does not own, and at the Closing Date will not own,
directly or indirectly, any shares of stock or any
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other equity or long-term debt securities of any corporation or have any equity
interest in any firm, partnership, joint venture, association or other entity.
Complete and correct copies of the articles or certificate of incorporation and
of the bylaws of the Company and all amendments thereto have been delivered to
the Placement Agent, and no changes therein will be made subsequent to the date
hereof and prior to the Closing Date.
(d) The issued and outstanding shares of capital stock of the Company
have been validly issued, are fully paid and nonassessable and, other than as
set forth in the Registration Statement, are not subject to any preemptive or
similar rights. Except as set forth in the Registration Statement and the
Prospectus such shares are not subject to any preemptive or similar rights. The
Company has an authorized, issued and outstanding capitalization as set forth
in the Prospectus as of the dates referred to therein. The description of the
securities of the Company in the Registration Statement and the Prospectus is,
and at the Closing Date will be, complete and accurate in all respects. Except
as set forth in the Registration Statement and the Prospectus, the Company does
not have outstanding, and at the Closing Date will not have outstanding, any
options to purchase, or any rights or warrants to subscribe for, or any
securities or obligations convertible into, or exchangeable for, or any
contracts or commitments to issue or sell, any shares of capital stock or other
securities.
(e) This Agreement has been duly authorized and validly executed and
delivered by the Company and is a legal, valid and binding agreement of the
Company enforceable against the Company in accordance with its terms, subject to
the effect of applicable bankruptcy, insolvency or similar laws affecting
creditors' rights generally and equitable principles of general applicability.
The Escrow Agreement has been duly authorized and validly executed and delivered
by the Company and is a legal, valid and binding agreement of the Company
enforceable against the Company in accordance with its terms, subject to the
effect of applicable bankruptcy, insolvency or similar laws affecting creditors'
rights generally and equitable principles of general applicability.
(f) The issuance and sale of the Shares have been duly authorized by the
Company, and the Shares, when issued and paid for in accordance with this
Agreement, will be duly and validly issued, fully paid and nonassessable and
will not be subject to preemptive or similar rights. The holders of the Shares
will not be subject to personal liability by reason of being such holders. The
Shares, when issued, will conform to the description thereof set forth in the
Prospectus.
(g) The financial statements and the related notes and schedules
included in the Registration Statement and the Prospectus present fairly the
financial condition of the Company as of the dates thereof and the results of
operations, stockholders' equity (deficit) and cash flows of the Company at the
dates and for the periods covered thereby, all in conformity with generally
accepted accounting principles ("GAAP") applied on a consistent basis throughout
the entire period involved, except as otherwise disclosed therein. No other
financial statements or schedules of the Company or any other entity are
required by the Act or the Rules and Regulations to be included in the
Registration Statement or the Prospectus.
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▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP (the "Accountants"), who have reported on such financial
statements and schedules, are independent accountants with respect to the
Company as required by the Act and the Rules and Regulations. The financial
statements of the Company and the related notes and schedules included in the
Registration Statement and the Prospectus have been prepared in conformity with
the requirements of the Act and the Rules and Regulations and present fairly the
information shown therein.
(h) 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 authorization; (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to
maintain accountability for assets; (iii) access to assets is permitted only in
accordance with management's general or specific authorization; and (iv) the
recorded accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(i) Subsequent to the respective dates as of which information is given
in the Registration Statement and the Prospectus and prior to the Closing Date,
except as set forth in or contemplated by the Registration Statement and the
Prospectus, (i) there has not been and will not have been any change in the
capitalization of the Company other than non-material changes in the ordinary
course of business, or any material adverse change in the business, properties,
business prospects, condition (financial or otherwise) or results of operations
of the Company arising for any reason whatsoever, (ii) the Company has not
incurred nor will it incur any material liabilities or obligations, direct or
contingent, nor has the Company entered into nor will it enter into any material
transactions other than pursuant to this Agreement, the Registration Statement
and the transactions referred to herein and therein and (iii) the Company has
not and will not have paid or declared any dividends or other distributions of
any kind on any class of its capital stock.
(j) Any real property and buildings held under lease to the Company are
held or leased by the Company under valid, binding and enforceable leases
conforming to the description thereof set forth in or incorporated by reference
into the Registration Statement and the Prospectus), with such exceptions as do
not interfere with the use made and proposed to be made of such property and
buildings by the Company.
(k) The Company is not an "investment company" or an "affiliated person"
of, or "promoter" or "principal underwriter" for, an "investment company," as
such terms are defined in the Investment Company Act of 1940, as amended (the
"Investment Company Act").
(l) Except as set forth in the Registration Statement and the
Prospectus, there are no actions, suits or proceedings pending or to the
Company's best knowledge, threatened against or affecting the Company or any of
its officers in their capacity as such, before or by any Federal or state court,
commission, regulatory body, administrative
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agency or other governmental body, domestic or foreign, wherein an unfavorable
ruling, decision or finding would reasonably be likely to materially adversely
affect the business, properties, prospects, condition (financial or otherwise)
or results of operations of the Company taken as a whole.
(m) The Company has, and at the Closing Date will have, (i) all
governmental licenses, permits, consents, orders, approvals and other
authorizations necessary to carry on its business as presently conducted except
where the failure to have such governmental licenses, permits, consents, orders,
approvals and other authorizations would not have a material adverse effect on
the business, properties, prospects, condition (financial or otherwise) or
results of operation of the Company, (ii) complied with all laws, regulations
and orders applicable to either it or its business, where the failure to so
comply would have a material adverse effect on the business, properties,
prospects, condition (financial or otherwise) or results of operations of the
Company, and (iii) performed all its obligations required to be performed, and
is not, and at the Closing Date will not be, to the Company's best knowledge, in
default, under any indenture, mortgage, deed of trust, voting trust agreement,
loan agreement, bond, debenture, note agreement, lease, contract or other
agreement or instrument (collectively, a "contract or other agreement") to which
it is a party or by which its property is bound or affected, except as otherwise
set forth in the Registration Statement and the Prospectus and except where such
default would not have a material adverse effect on the business, properties,
prospects, condition (financial or otherwise) or results of operations of the
Company, and, to the Company's best knowledge, no other party under any contract
or other agreement to which it is a party is in default in any respect
thereunder. The Company is not in violation of any provision of its
organizational or governing documents.
(n) The Company has all corporate power and authority to enter into this
Agreement and the Escrow Agreement, and to carry out the provisions and
conditions hereof and thereof, and all consents, authorizations, approvals and
orders required in connection herewith and therewith have been obtained.
(o) Neither (i) the issuance, offering and sale of the Shares pursuant
hereto, nor (ii) the compliance by the Company with the other provisions hereof
require the consent, approval, authorization, registration or qualification of
or with any governmental authority, except such as have been obtained, such as
may be required under state securities or Blue Sky laws or the bylaws and rules
of the National Association of Securities Dealers, Inc. (the "NASD") and, if the
Registration Statement is not effective under the Act as of the time of
execution hereof, such as may be required (and shall be obtained as provided in
either this Agreement) under the Act.
(p) Neither the execution of this Agreement or the Escrow Agreement, nor
the issuance, offering or sale of the Shares, nor the consummation of any of the
transactions contemplated herein or in the Escrow Agreement, nor the compliance
by the Company with the terms and provisions hereof or thereof will conflict
with, or will result in a breach of, any of the terms and provisions of, or has
constituted or will constitute a default
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under, or has resulted in or will result in the creation or imposition of any
lien, charge or encumbrance upon any property or assets of the Company pursuant
to the terms of any contract or other agreement to which the Company may be
bound or to which any of the property or assets of the Company is subject,
except such conflicts, breaches or defaults as may have been waived; nor will
such action result in any violation of the provisions of the Company's
organizational or governing documents, or any statute or any order, rule or
regulation applicable to the Company or of any court or of any federal, state or
other regulatory authority or other government body having jurisdiction over the
Company.
(q) There is no document or contract of a character required to be
described in the Registration Statement or the Prospectus or to be filed as an
exhibit to the Registration Statement which is not described or filed as
required. All such contracts to which the Company is a party have been duly
authorized, executed and delivered by the Company, constitute valid and binding
agreements of the Company, and are enforceable against the Company in accordance
with the terms thereof, subject to the effect of applicable bankruptcy,
insolvency or similar laws affecting creditors' rights generally and equitable
principles of general applicability.
(r) No statement, representation or warranty made by the Company in this
Agreement or made in any certificate or document required by this Agreement or
the Escrow Agreement to be delivered to the Placement Agent, the Investors or
the Escrow Agent was or will be, when made, inaccurate, untrue or incorrect in
any material respect.
(s) The Company and its directors, officers or controlling persons have
not taken, directly or indirectly, any action intended, or which might
reasonably be expected, to cause or result, under the Act or otherwise, in, or
which has constituted, stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the Common Stock.
(t) No holder of securities of the Company has rights to the
registration of any securities of the Company as a result of the filing of the
Registration Statement, other than rights which are not exercisable due to the
Placement Agent's determination to include only securities sold directly from
the Company, except for such rights as have been waived which have been
disclosed to the Placement Agent.
(u) The Common Stock is currently listed on the Nasdaq National Market
(the "NNM").
(v) The Company is not involved in any material labor dispute nor is any
such dispute threatened.
(w) Neither the Company nor any of its employees or agents has made any
payment of funds of the Company received, or retained any funds in violation of
any law, rule or regulation of a character required to be disclosed in the
Prospectus.
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(x) The Company is insured as described in the Prospectus. The Company
has no reason to believe that its current insurance arrangements are
insufficient for the Company to carry on its business as presently conducted.
(y) Except as set forth in the Registration Statement and the
Prospectus, the business, operations and properties of the Company has been and
is being conducted in compliance with all applicable laws, ordinances, rules,
regulations, licenses, permits, approvals, plans, authorizations or requirements
relating to occupational safety and health, or pollution, or protection of
health or the environment (including, without limitation, those relating to
emissions, discharges, releases or threatened releases of pollutants,
contaminants or hazardous or toxic substances, materials or wastes into ambient
air, surface water, groundwater or land, or relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport or
handling of chemical substances, pollutants, contaminants or hazardous or toxic
substances, materials or wastes, whether solid, gaseous or liquid in nature) of
any governmental department, commission, board, bureau, agency or
instrumentality of the United States, any state or political subdivision
thereof, or any foreign jurisdiction, and all applicable judicial or
administrative agency or regulatory decrees, awards, judgments and orders
relating thereto, except where the failure to be in such compliance will not,
individually or in the aggregate, have a material adverse effect on the ability
of the Company to carry on its business as presently conducted; and the Company
has not received any notice from any governmental instrumentality or any third
party alleging any material violation thereof or liability thereunder
(including, without limitation, liability for costs of investigating or
remediating sites containing hazardous substances and/or damages to natural
resources).
(z) The Company is not aware of any infringement as to any of its
patents, either issued or allowed in the United States or Europe, nor is it
aware of any infringement of any confidentiality or non-compete agreement.
(aa) Each officer and director of the Company listed on Exhibit B
hereto has delivered to the Placement Agent an agreement in the form of
Attachment A hereto to the effect that he or she will not, for a period of 90
days after the date hereof, without the prior written consent of the Placement
Agent, offer to sell, sell, contract to sell, grant any option to purchase or
otherwise dispose (or announce any offer, sale, grant of any option to purchase
or other disposition) of any shares of capital stock of the Company or
securities convertible into, or exchangeable or exercisable for, shares of
capital stock of the Company.
(bb) The Company has delivered to the Placement Agent an agreement
in the form of Attachment B hereto to the effect that it will not, for a period
of 180 days after the date hereof, without the prior written consent of the
Placement Agent, offer to sell, sell, contract to sell, grant any option to
purchase or otherwise dispose (or announce any offer, sale, grant of any option
to purchase or other disposition) of any shares of capital stock of the Company
or securities convertible into, or exchangeable or exercisable for, shares of
capital stock of the Company, except with respect to the issuance of shares of
Common Stock upon the exercise of stock options and warrants outstanding as of
the date hereof and upon the conversion of shares
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of Preferred Stock outstanding as of the date hereof and the issuance of Common
Stock or stock options under any benefit plan of the Company.
4. Agreements of the Company. The Company covenants and agrees with the
Placement Agent as follows:
(a) The Company will not, either prior to the Effective Date or
thereafter during such period as the Prospectus would be required by law to be
delivered in connection with sales of the Shares by an underwriter or dealer,
file any amendment or supplement to the Registration Statement or the
Prospectus, unless a copy thereof shall first have been submitted to the
Placement Agent within a reasonable period of time prior to the filing thereof
and the Placement Agent shall not have objected thereto in good faith.
(b) The Company will use its best efforts to cause the Registration
Statement to become effective, and will notify the Placement Agent promptly, and
will confirm such advice in writing, (1) when the Registration Statement has
become effective and when any post-effective amendment thereto becomes
effective, (2) of any request by the securities or other governmental authority
(including, without limitation, the Commission) of any jurisdiction for
amendments or supplements to the Registration Statement or the Prospectus or for
additional information, (3) of the issuance by any securities or other
governmental authority (including, without limitation, the Commission) of any
jurisdiction of any stop order suspending the effectiveness of the Registration
Statement or the initiation of any proceedings for that purpose or the threat
thereof, (4) of the happening of any event during the period mentioned in the
second sentence of Section 4(c) that in the judgment of the Company makes any
statement made in the Registration Statement or the Prospectus untrue or that
requires the making of any changes in the Registration Statement or the
Prospectus in order to make the statements therein, in light of the
circumstances in which they are made, not misleading and (5) of receipt by the
Company or any representative or attorney of the Company of any other
communication from the securities or other governmental authority (including,
without limitation, the Commission) of any jurisdiction relating to any of the
Registration Statement, any Preliminary Prospectus or the Prospectus. If at any
time any securities or other governmental authority (including, without
limitation, the Commission) of any jurisdiction shall issue any order suspending
the effectiveness of the Registration Statement, the Company will make every
reasonable effort to obtain the withdrawal of such order at the earliest
possible moment. If the Company has omitted any information from the
Registration Statement, pursuant to Rule 430A, it will use its best efforts to
comply with the provisions of and make all requisite filings with the Commission
pursuant to said Rule 430A and to notify the Placement Agent promptly of all
such filings.
(c) If, at any time when a Prospectus relating to the Shares is required
to be delivered under the Act, any event occurs as a result of which the
Prospectus, as then amended or supplemented, would, in the judgment of counsel
to the Company or counsel to the Placement Agent, include any untrue statement
of a material fact or omit to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which
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they were made, not misleading, or the Registration Statement, as then amended
or supplemented, would, in the judgment of counsel to the Company or counsel to
the Placement Agent, include any untrue statement of a material fact or omit to
state a material fact necessary to make the statements therein not misleading,
or if for any other reason it is necessary, in the judgment of counsel to the
Company or counsel to the Placement Agent, at any time to amend or supplement
the Prospectus or the Registration Statement to comply with the Act or the Rules
and Regulations, the Company will promptly notify the Placement Agent and,
subject to Section 4(a) hereof, will promptly prepare and file with the
Commission, at the Company's expense, an amendment to the Registration Statement
or an amendment or supplement to the Prospectus that corrects such statement or
omission or effects such compliance and will deliver to the Placement Agent,
without charge, such number of copies thereof as the Placement Agent may
reasonably request. The Company consents to the use of the Prospectus or any
amendment or supplement thereto by the Placement Agent.
(d) The Company will furnish to the Placement Agent and its counsel,
without charge, (i) two signed copies of the registration statement described in
Section 3(a) hereof and each pre-effective amendment thereto, including
financial statements and schedules, and all exhibits thereto and (ii) so long as
a prospectus relating to the Shares is required to be delivered under the Act,
as many copies of each Preliminary Prospectus or the Prospectus or any amendment
or supplement thereto as the Placement Agent may reasonably request.
(e) The Company will comply with all the undertakings contained in the
Registration Statement.
(f) Prior to the sale of the Shares to the Investors, the Company will
cooperate with the Placement Agent and its counsel in connection with the
registration or qualification of the Shares for offer and sale under the state
securities or Blue Sky laws of such jurisdictions as the Placement Agent may
request; provided, that in no event shall the Company be obligated to qualify to
do business in any jurisdiction where it is not now so qualified or to take any
action which would subject it to general service of process in any jurisdiction
where it is not now so subject.
(g) During the period of five years commencing on the Effective Date,
the Company will furnish to the Placement Agent copies of such financial
statements and other periodic and special reports as the Company may from time
to time distribute generally to the holders of any class of its capital stock,
and will furnish to the Placement Agent a copy of each annual or other report it
shall be required to file with the Commission.
(h) The Company will make generally available to holders of its
securities, as soon as may be practicable, but in no event later than the last
day of the fifteenth full calendar month following the calendar quarter in which
the Effective Date falls, a consolidated earnings statement (which need not be
audited but shall be in reasonable detail) for a period of 12 months ended
commencing after the Effective Date, and satisfying the
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provisions of Section 11(a) of the Act (including Rule 158 of the Rules and
Regulations).
(i) The Company will not at any time, directly or indirectly, take any
action intended, or which might reasonably be expected, to cause or result in,
or which will constitute, stabilization of the price of the Shares to facilitate
the sale or resale of any of the Shares.
(j) The Company will apply the net proceeds from the offering and sale
of the Shares in the manner set forth in the Prospectus under the caption "Use
of Proceeds."
5. Expenses. Whether or not the transactions contemplated by this Agreement
are consummated or this Agreement is terminated, the Company will pay all costs
and expenses incident to the performance of the obligations of the Company under
this Agreement, including but not limited to costs and expenses of or relating
to (1) the preparation, printing and filing of the Registration Statement
(including each pre- and post-effective amendments thereto) and exhibits
thereto, each Preliminary Prospectus, the Prospectus and any amendment or
supplement to the Prospectus, including all fees, disbursements and other
charges of counsel to the Company, (2) the preparation and delivery of
certificates representing the Shares, (3) furnishing (including costs of
shipping and mailing) such copies of the Registration Statement (including all
pre- and post-effective amendments thereto), the Prospectus and any Preliminary
Prospectus, and all amendments and supplements to the Prospectus, as may be
requested for use in connection with the direct placement of the Shares, (4) the
listing of the Common Stock on the NMS, (5) any filings required to be made by
the Placement Agent with the NASD, and the fees, disbursements and other charges
of counsel for the Placement Agent in connection therewith, (6) the registration
or qualification of the Shares for offer and sale under the securities or Blue
Sky laws of such jurisdictions designated pursuant to Section 4(f), including
the reasonable fees, disbursements and other charges of counsel to the Placement
Agent in connection therewith and the preparation and printing of preliminary,
supplemental and final Blue Sky memoranda, (7) fees, disbursements and other
charges of counsel to the Company and (8) the fees of the Escrow Agent. The
Company shall reimburse the Placement Agent, on a fully accountable basis, for
all travel, legal and other out-of-pocket expenses incurred in connection with
the engagement hereunder, up to a maximum of $80,000; provided however, that if
the transactions contemplated herein do not occur for reasons other than those
arising pursuant to Section 8(a) hereof, the Company shall only reimburse the
Placement Agent for one half of its actual out-of-pocket expenses incurred
through such date of termination, up to a maximum of $40,000.
6. Conditions of the Obligations of the Placement Agent. The obligations of
the Placement Agent hereunder are subject to the following conditions:
(a) Notification that the Registration Statement has become effective
shall be received by the Placement Agent not later than 5:00 p.m., New York City
time, on the date of this Agreement or at such later date and time as shall be
consented to in writing by the Placement Agent and all filings required by Rule
424 of the Rules and Regulations and Rule
-11-
430A shall have been made.
(b) (i) No stop order suspending the effectiveness of the Registration
Statement shall have been issued, and no proceedings for that purpose shall be
pending or threatened by any securities or other governmental authority
(including, without limitation, the Commission), (ii) no order suspending the
effectiveness of the Registration Statement or the qualification or registration
of the Shares under the securities or Blue Sky laws of any jurisdiction shall be
in effect and no proceeding for such purpose shall be pending before or
threatened or contemplated by any securities or other governmental authority
(including, without limitation, the Commission), (iii) any request for
additional information on the part of the staff of any securities or other
governmental authority (including, without limitation, the Commission) shall
have been complied with to the satisfaction of the staff of the Commission or
such authorities and (iv) after the date hereof no amendment or supplement to
the Registration Statement or the Prospectus shall have been filed unless a copy
thereof was first submitted to the Placement Agent and the Placement Agent did
not object thereto in good faith, and the Placement Agent shall have received
certificates, dated the Closing Date and signed by the President and Chief
Executive Officer or the Chairman of the Board of Directors of the Company, and
the Chief Financial Officer of the Company (who may, as to proceedings
threatened, rely upon the best of their information and belief), to the effect
of clauses (i), (ii) and (iii).
(c) Since the respective dates as of which information is given in the
Registration Statement and the Prospectus, (i) there shall not have been a
material adverse change in the general affairs, business, business prospects,
properties, management, condition (financial or otherwise) or results of
operations of the Company, whether or not arising from transactions in the
ordinary course of business, in each case other than as set forth in or
contemplated by the Registration Statement and the Prospectus and (ii) the
Company shall not have sustained any material loss or interference with its
business or properties from fire, explosion, flood or other casualty, whether or
not covered by insurance, or from any labor dispute or any court or legislative
or other governmental action, order or decree, which is not set forth in the
Registration Statement and the Prospectus, if in the judgment of the Placement
Agent any such development makes it impracticable or inadvisable to consummate
the sale and delivery of the Shares to Investors at the public offering price.
(d) Since the respective dates as of which information is given in the
Registration Statement and the Prospectus, there shall have been no litigation
or other proceeding instituted against the Company or any of its officers or
directors in their capacities as such, before or by any Federal, state or local
court, commission, regulatory body, administrative agency or other governmental
body, domestic or foreign, in which litigation or proceeding an unfavorable
ruling, decision or finding would materially and adversely affect the business,
properties, business prospects, condition (financial or otherwise) or results of
operations of the Company.
(e) Each of the representations and warranties of the Company
-12-
contained herein shall be true and correct in all material respects at the
Closing Date, as if made on such date, and all covenants and agreements herein
contained to be performed on the part of the Company and all conditions herein
contained to be fulfilled or complied with by the Company at or prior to the
Closing Date shall have been duly performed, fulfilled or complied with.
(f) The Placement Agent shall have received an opinion, dated the
Closing Date (or such other date as may be set forth in a representation or
warranty), of ▇▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP, as counsel to the Company, in form
and substance reasonably satisfactory to the Placement Agent:
(g) Concurrently with the execution and delivery of this Agreement, or,
if the Company elects to rely on Rule 430A, on the date of the Prospectus, the
Accountants shall have furnished to the Placement Agent a letter, dated the date
of its delivery (the "Original Letter"), addressed to the Placement Agent and in
form and substance satisfactory to the Placement Agent, confirming that (i) they
are independent public accountants with respect to the Company within the
meaning of the Act and the Rules and Regulations; (ii) in their opinion, the
financial statements and any supplementary financial information and schedules
(and pro forma financial information) included in the Registration Statement and
examined by them comply as to form in all material respects with the applicable
accounting requirements of the Act and the Rules and Regulations; (iii) on the
basis of procedures, not constituting an examination in accordance with
generally accepted auditing standards, set forth in detail in the Original
Letter, a reading of the latest available interim financial statements of the
Company, inspections of the minute books of the Company since the latest audited
financial statements included in the Prospectus, inquiries of officials of the
Company responsible for financial and accounting matters and such other
inquiries and procedures as may be specified in the Original
-13-
Letter to a date not more than five days prior to the date of the Original
Letter, nothing came to their attention that caused them to believe that: (A) as
of a specified date not more than five days prior to the date of the Original
Letter, there have been any changes in the capital stock of the Company or any
increase in the long-term debt of the Company, or any decreases in net current
assets or net assets or other items specified by the Placement Agent, or any
increases in any items specified by the Placement Agent, in each case as
compared with amounts shown in the latest balance sheet included in the
Prospectus, except in each case for changes, increases or decreases which the
Prospectus discloses have occurred or may occur or which are described in the
Original Letter; and (B) for the period from the date of the latest financial
statements included in the Prospectus to the specified date referred to in
Clause (A), there were any decreases in revenues or the total or per share
amounts of net income or other items specified by the Placement Agent, or any
increases in any items specified by the Placement Agent, in each case as
compared with the comparable period of the preceding year and with any other
period of corresponding length specified by the Placement Agent, except in each
case for decreases or increases which the Prospectus discloses have occurred or
may occur or which are described in the Original Letter; and (iv) in addition to
the examination referred to in their reports included in the Prospectus and the
procedures referred to in clause (iii) above, they have carried out certain
specified procedures, not constituting an examination in accordance with
generally accepted auditing standards, with respect to certain amounts,
percentages and financial information specified by the Placement Agent, which
are derived from the general accounting, financial or other records of the
Company, as the case may be, which appear in the Prospectus or in Part II of, or
in exhibits or schedules to, the Registration Statement, and have compared such
amounts, percentages and financial information with such accounting, financial
and other records and have found them to be in agreement. At the Closing Date,
the Accountants shall have furnished to the Placement Agent a letter, dated the
date of its delivery, which shall confirm, on the basis of a review in
accordance with the procedures set forth in the Original Letter, that nothing
has come to their attention during the period from the date of the Original
Letter referred to in the prior sentence to a date (specified in the letter) not
more than five days prior to the Closing Date which would require any change in
the Original Letter if it were required to be dated and delivered at the Closing
Date.
(h) The Placement Agent shall have received an opinion, dated the
Closing Date, of Patent Counsel in form and substance satisfactory to the
Placement Agent as to certain intellectual property matters referenced in the
Registration Statement.
(i) At the Closing Date, there shall be furnished to the Placement Agent
a certificate, dated the date of its delivery, signed by each of the Chief
Executive Officer and the Chief Financial Officer of the Company, in form and
substance satisfactory to the Placement Agent to the effect that to the best of
such person's knowledge:
(i) Each signer of such certificate has carefully examined the
Registration Statement and the Prospectus and (A) as of the date of such
certificate, (x) the Registration Statement does not contain any untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary in order to make
-14-
the statements therein not misleading and (y) the Prospectus does not
contain any untrue statement of a material fact or omit to state a 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 and (B) since the Effective Date no event has occurred
as a result of which it is necessary to amend or supplement the Prospectus
in order to make the statements therein not untrue or misleading in any
material respect.
(ii) Each of the representations and warranties of the Company
contained in this Agreement were, when originally made, and are, at the
time such certificate is delivered, true and correct in all material
respects.
(iii) Each of the covenants required herein to be performed by the
Company on or prior to the date of such certificate has been duly, timely
and fully performed and each condition herein required to be complied with
by the Company on or prior to the delivery of such certificate has been
duly, timely and fully complied with.
(iv) No stop order suspending the effectiveness of the Registration
Statement or of any part thereof has been issued and no proceedings for
that purpose have been instituted or are contemplated by the Securities and
Exchange Commission.
(v) Subsequent to the date of the most recent financial statements in
the Prospectus, there has been no material adverse change in the financial
position or results of operations of the Company, except as set forth in or
contemplated by the Prospectus.
(j) The Shares shall be qualified for sale in such states as the
Placement Agent may reasonably request, each such qualification shall be in
effect and not subject to any stop order or other proceeding on the Closing
Date; provided that in no event shall the Company be obligated to qualify to do
business in any jurisdiction where it is not now so qualified or to take any
action which would subject it to general service of process in any jurisdiction
where it is not now so subject.
(k) The Company shall have furnished to the Placement Agent such
certificates, in addition to those specifically mentioned herein, as the
Placement Agent may have reasonably requested as to the accuracy and
completeness at the Closing Date of any statement in the Registration Statement
or the Prospectus, as to the accuracy at the Closing Date of the representations
and warranties of the Company as to the performance by the Company of its
obligations hereunder, or as to the fulfillment of the conditions concurrent and
precedent to the obligations hereunder of the Placement Agent.
7. Indemnification.
(a) The Company shall indemnify and hold harmless the Placement
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Agent, the directors, officers, employees and agents of the Placement Agent and
each person, if any, who controls the Placement Agent within the meaning of
Section 15 of the Act or Section 20 of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), from and against any and all losses, claims,
liabilities, expenses and damages, joint or several, (including any and all
investigative, legal and other expenses reasonably incurred in connection with,
and any amount paid in settlement of, any action, suit or proceeding or any
claim asserted), to which it, or any of them, may become subject under the Act
or other Federal or state statutory law or regulation, at common law or
otherwise, insofar as such losses, claims, liabilities, expenses or damages
arise out of or are based on (i) any untrue statement or alleged untrue
statement made by the Company in Section 3 of this Agreement, (ii) any untrue
statement or alleged untrue statement of any material fact contained in (A) any
Preliminary Prospectus, the Registration Statement or the Prospectus or any
amendment or supplement to the Registration Statement or the Prospectus and (B)
any application or other document, or any amendment or supplement thereto,
executed by the Company based upon written information furnished by or on behalf
of the Company filed in any jurisdiction in order to qualify the Shares under
the securities or Blue Sky laws thereof or filed with the Commission or any
securities association or securities exchange (each, an "Application") or (iii)
the omission or alleged omission to state in any Preliminary Prospectus, the
Registration Statement or the Prospectus or any supplement to the Registration
Statement or the Prospectus or any Application a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances in which they were made, not misleading; provided, however, that
the Company will not be liable to the extent that such loss, claim, liability,
expense or damage arises from the sale of the Shares in the public offering to
any person and is based solely on an untrue statement or omission or alleged
untrue statement or omission made in reliance on and in conformity with
information relating to the Placement Agent furnished in writing to the Company
by the Placement Agent expressly for inclusion in the Registration Statement,
any Preliminary Prospectus or the Prospectus; and provided further, that such
indemnity with respect to any Preliminary Prospectus shall not inure to the
benefit of any Placement Agent (or any person controlling such Placement Agent)
from whom the person asserting any such loss, claim, damage, liability or action
purchased Shares which are the subject thereof to the extent that any such loss,
claim, damage or liability (i) results from the fact that such Placement Agent
failed to send or give a copy of the Prospectus (as amended or supplemented) to
such person at or prior to the confirmation of the sale of such Shares to such
person in any case where such delivery is required by the Act and (ii) arises
out of or is based upon an untrue statement or omission of a material fact
contained in such Preliminary Prospectus that was corrected in the Prospectus
(or any amendment or supplement thereto), unless such failure to deliver the
Prospectus (as amended or supplemented) was the result of noncompliance by the
Company with Section 5(d). This indemnity agreement will be in addition to any
liability which the Company may otherwise have. The Company will not, without
the prior written consent of the Placement Agent (which will not be unreasonably
withheld), settle or compromise or consent to the entry of any judgment in any
pending or threatened claim, action, suit or proceeding in respect of which
indemnification may be sought hereunder (whether or not such Placement Agent or
any person who controls such Placement Agent within the meaning of Section 15 of
the Act or Section 20 of the Exchange Act is a party to each claim, action, suit
or proceeding), unless such
-16-
settlement, compromise or consent includes an unconditional release of the
Placement Agent and each such controlling person from all liability arising out
of such claim, action, suit or proceeding.
(b) The Placement Agent will indemnify and hold harmless the Company,
each person, if any, who controls the Company within the meaning of Section 15
of the Act or Section 20 of the Exchange Act, each director of the Company and
each officer of the Company who signs the Registration Statement to the same
extent as the foregoing indemnity from the Company to the Placement Agent, but
only insofar as losses, claims, liabilities, expenses or damages arise out of or
are based on any untrue statement or omission or alleged untrue statement or
omission made in reliance on and in conformity with information relating to the
Placement Agent furnished in writing to the Company by the Placement Agent
expressly for use in the Registration Statement, any Preliminary Prospectus or
the Prospectus. This indemnity agreement will be in addition to any liability
that the Placement Agent might otherwise have. The Company acknowledges that,
for all purposes under this Agreement, the statements set forth under the
heading "Plan of Distribution" in any Preliminary Prospectus and the Prospectus
constitute the only information relating to the Placement Agent furnished in
writing to the Company by the Placement Agent expressly for inclusion in the
Registration Statement, any Preliminary Prospectus or the Prospectus.
(c) Any party that proposes to assert the right to be indemnified under
this Section 7 will, promptly after receipt of notice of commencement of any
action against such party in respect of which a claim is to be made against an
indemnifying party or parties under this Section 7, notify each such
indemnifying party of the commencement of such action, enclosing a copy of all
papers served, but the omission so to notify such indemnifying party will not
relieve it from any liability that it may have to any indemnified party under
the foregoing provisions of this Section 7 unless, and only to the extent that,
such omission results in the forfeiture of substantive rights or defenses by the
indemnifying party. If any such action is brought against any indemnified party
and it notifies the indemnifying party of its commencement, the indemnifying
party will be entitled to participate in and, to the extent that it elects by
delivering written notice to the indemnified party promptly after receiving
notice of the commencement of the action from the indemnified party, jointly
with any other indemnifying party similarly notified, to assume the defense of
the action, with counsel satisfactory to the indemnified party, and after notice
from the indemnifying party to the indemnified party of its election to assume
the defense, the indemnifying party will not be liable to the indemnified party
for any legal or other expenses except as provided below and except for the
reasonable costs of investigation subsequently incurred by the indemnified party
in connection with the defense. The indemnified party will have the right to
employ its own counsel in any such action, but the fees, expenses and other
charges of such counsel will be at the expense of such indemnified party unless
(1) the employment of counsel by the indemnified party has been authorized in
writing by the indemnifying party, (2) the indemnified party has reasonably
concluded (based on advice of counsel) that a conflict or potential conflict
exists (based on advice of counsel to the indemnified party) between the
indemnified party and the indemnifying party (in which case the indemnifying
party will not have the right to direct the
-17-
defense of such action on behalf of the indemnified party) or (3) the
indemnifying party has not in fact employed counsel to assume the defense of
such action within a reasonable time after receiving notice of the commencement
of the action, in each of which cases the reasonable fees, disbursements and
other charges of counsel will be at the expense of the indemnifying party or
parties. It is understood that the indemnifying party or parties shall not, in
connection with any proceeding or related proceedings in the same jurisdiction,
be liable for the reasonable fees, disbursements and other charges of more than
one separate firm admitted to practice in such jurisdiction at any one time for
all such indemnified party or parties. All such fees, disbursements and other
charges will be reimbursed by the indemnifying party promptly as they are
incurred. The Company will not, without the prior written consent of the
Placement Agent (which consent will not be unreasonably withheld), settle or
compromise or consent to the entry of any judgment in any pending or threatened
claim, action, suit or proceeding in respect of which indemnification may be
sought hereunder (whether or not the Placement Agent or any person who controls
the Placement Agent within the meaning of Section 15 of the Act or Section 20 of
the Exchange Act is a party to such claim, action, suit or proceeding), unless
such settlement, compromise or consent includes an unconditional release of the
Placement Agent and each such controlling person from all liability arising out
of such claim, action, suit or proceeding. An indemnifying party will not be
liable for any settlement of any action or claim effected without its written
consent (which consent will not be unreasonably withheld).
(d) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in the foregoing
paragraphs of this Section 7 is applicable in accordance with its terms but for
any reason is held to be unavailable from the Company or the Placement Agent,
the Company and the Placement Agent will contribute to the total losses, claims,
liabilities, expenses and damages (including any investigative, legal and other
expenses reasonably incurred in connection with, and any amount paid in
settlement of, any action, suit or proceeding or any claim asserted, but after
deducting any contribution received by the Company from persons other than the
Placement Agent such as persons who control the Company within the meaning of
the Act or the Exchange Act, officers of the Company who signed the Registration
Statement and directors of the Company, who also may be liable for contribution)
to which the Company and the Placement Agent may be subject in such proportion
as shall be appropriate to reflect the relative benefits received by the Company
on the one hand and the Placement Agent on the other. The relative benefits
received by the Company on the one hand and the Placement Agent on the other
shall be deemed to be in the same proportion as the total net proceeds from the
offering (before deducting Company expenses) received by the Company as set
forth in the table on the cover page of the Prospectus bear to the fee received
by the Placement Agent hereunder. If, but only if, the allocation provided by
the foregoing sentence is not permitted by applicable law, the allocation of
contribution shall be made in such proportion as is appropriate to reflect not
only the relative benefits referred to in the foregoing sentence 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, liability, expense or damage, or action in respect thereof, as well as
any other relevant equitable considerations with respect to such offering. Such
relative fault shall be determined by reference to whether the untrue or
-18-
alleged untrue statement of a material fact or omission or alleged omission to
state a material fact relates to information supplied by the Company or the
Placement Agent, the intent of the parties and their relative knowledge, access
to information and opportunity to correct or prevent such statement or omission.
The Company and the Placement Agent agree that it would not be just and
equitable if contributions pursuant to this Section 7(d) were 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, liability,
expense or damage, or action in respect thereof, referred to above in this
Section 7(d) shall be deemed to include, for purpose of this Section 7(d), 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(d), the Placement Agent shall
not be required to contribute any amount in excess of the fee received by it,
and no person found guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Act) will be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. For purposes of this
Section 7(d), any person who controls a party to this Agreement within the
meaning of the Act or the Exchange Act will have the same rights to contribution
as that party, and each officer of the Company who signed the Registration
Statement will have the same rights to contribution as the Company, subject in
each case to the provisions hereof. Any party entitled to contribution, promptly
after receipt of notice of commencement of any action against such party in
respect of which a claim for contribution may be made under this Section 7(d),
will notify any such party or parties from whom contribution may be sought, but
the omission so to notify will not relieve the party or parties from whom
contribution may be sought from any other obligation it or they may have under
this Section 7(d). No party will be liable for contribution with respect to any
action or claim settled without its written consent (which consent will not be
unreasonably withheld).
8. Termination.
(a) The obligations of the Placement Agent under this Agreement may be
terminated at any time prior to the Closing Date, by notice to the Company from
the Placement Agent, without liability on the part of the Placement Agent to the
Company if, prior to delivery and payment for the Shares, in the sole judgment
of the Placement Agent (i) trading in the Common Stock of the Company shall have
been suspended by the Commission or by the NNM, (ii) trading in securities
generally on the New York Stock Exchange or the NNM shall have been suspended or
limited or minimum or maximum prices shall have been generally established on
any of such exchanges, or additional material governmental restrictions, not in
force on the date of this Agreement, shall have been imposed upon trading in
securities generally by any of such exchanges or by order of the Commission or
any court or other governmental authority, (iii) a general banking moratorium
shall have been declared by Federal or New York State authorities, (iv) any
material adverse change in the financial or securities markets in the United
States or any outbreak or material escalation of hostilities or declaration by
the United States of a national emergency or war or other calamity or crisis
shall have occurred, the effect of any of which is such as to make it, in the
sole judgment of the Placement Agent, impracticable or inadvisable to market the
Shares on the terms and in the manner
-19-
contemplated by the Prospectus.
(b) The obligations of the parties under this Agreement shall be
automatically terminated in the event that the Requisite Funds have not been
deposited by the Investors into the Escrow Account by the close of business on
the Closing Date.
9. Notices. Notice given pursuant to any of the provisions of this
Agreement shall be in writing and, unless otherwise specified, shall be mailed
or delivered (a) if to the Company, at the office of the Company, ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇ or (b) if to the Placement
Agent, at the office of Vector Securities International, Inc., ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇, Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇. Any
such notice shall be effective only upon receipt. Any notice under Section 7 may
be made by facsimile or telephone, but if so made shall be subsequently
confirmed in writing.
10. Survival. The respective representations, warranties, agreements,
covenants, indemnities and other statements of the Company, its officers and the
Placement Agent set forth in this Agreement or made by or on behalf of them,
respectively, pursuant to this Agreement shall remain in full force and effect,
regardless of (i) any investigation made by or on behalf of the Company, any of
its officers or directors, the Placement Agent or any controlling person
referred to in Section 7 hereof and (ii) delivery of and payment for the Shares.
The respective agreements, covenants, indemnities and other statements set forth
in Sections 5 and 7 hereof shall remain in full force and effect, regardless of
any termination or cancellation of this Agreement.
11. Successors. This Agreement shall inure to the benefit of and shall be
binding upon the Placement Agent, the Company and their respective successors
and legal representatives, and nothing expressed or mentioned in this Agreement
is intended or shall be construed to give any other person 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 (i) the
indemnification and contribution contained in Sections 7(a) and (d) of this
Agreement shall also be for the benefit of the directors, officers, employees
and agents of the Placement Agent and any person or persons who control the
Placement Agent within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act and (ii) the indemnification and contribution contained in Sections
7(b) and (d) of this Agreement shall also be for the benefit of the directors of
the Company, the officers of the Company who have signed the Registration
Statement and any person or persons who control the Company within the meaning
of Section 15 of the Act or Section 20 of the Exchange Act. No Investor shall be
deemed a successor because of such purchase.
12. APPLICABLE LAW. THE VALIDITY AND INTERPRETATIONS OF THIS AGREEMENT, AND
THE TERMS AND CONDITIONS SET FORTH HEREIN, SHALL BE GOVERNED BY AND CONSTRUED IN
-20-
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO ANY
PROVISIONS RELATING TO CONFLICTS OF LAWS.
13. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
14. Entire Agreement. This Agreement constitutes the entire understanding
between the parties hereto as to the matters covered hereby and supersedes all
prior understandings, written or oral, relating to such subject matter.
Please confirm that the foregoing correctly sets forth the agreement
between the Company and the Placement Agent.
Very truly yours,
NEOSE TECHNOLOGIES, INC.
By:
----------------------------
Name:
Title:
Confirmed as of the date first
above mentioned:
VECTOR SECURITIES INTERNATIONAL, INC.
By:
----------------------------
Name:
Title:
-21-
EXHIBIT A
[ESCROW AGREEMENT]
-22-
EXHIBIT B
LOCK UP LETTERS
-23-
ATTACHMENT A
Vector Securities International, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Reference is made to a Placement Agency Agreement (the "Placement Agency
Agreement"), which will be executed between Neose Technologies, Inc., a Delaware
corporation (the "Company"), and Vector Securities International, Inc. (the
"Placement Agent").
In consideration of the Placement Agency Agreement, the undersigned hereby
agrees not to, without the prior written consent of the Placement Agent, offer,
sell or otherwise dispose of any shares of the Company's Common Stock, par value
$.01 per share (the "Common Stock"), or any securities convertible into or
exercisable or exchangeable for, or any rights to purchase or acquire, Common
Stock owned by the undersigned for a period of 90 days after the date of the
Placement Agency Agreement.
Dated: _______________ , 1997
Very truly yours,
----------------------------
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ATTACHMENT B
Vector Securities International, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Reference is made to a Placement Agency Agreement (the "Placement Agency
Agreement"), which will be executed between Neose Technologies, Inc., a Delaware
corporation (the "Company"), and Vector Securities International, Inc. (the
"Placement Agent").
In consideration of the Placement Agency Agreement, the undersigned hereby
agrees not to, without the prior written consent of the Placement Agent, offer,
sell or otherwise dispose of any shares of the Company's Common Stock, par value
$.01 per share (the "Common Stock"), or any securities convertible into or
exercisable or exchangeable for, or any rights to purchase or acquire, Common
Stock owned by the undersigned for a period of 90 days after the date of the
Placement Agency Agreement except with respect to the issuance of shares of
Common Stock upon the exercise of stock options and warrants outstanding as of
the date hereof and upon the conversion of shares of Preferred Stock outstanding
as of the date hereof and the issuance of Common Stock or stock options under
any benefit plan of the Company.
Dated: _____________ , 1997
Very truly yours,
NEOSE TECHNOLOGIES, INC.
--------------------------------
Name:
Title:
-25-
