PLACEMENT AGENCY AGREEMENT March 12, 2019
March
12, 2019
ThinkEquity,
a division of Fordham Financial Management, Inc.
00
Xxxxx Xxxxxx, 00xx Xxxxx Xxx Xxxx, XX 00000
Taglich
Brothers
000 Xxx
Xxxx Xxxxxx
Xxxxxxxxxx,
XX 00000
Ladies
and Gentlemen:
Subject
to the terms and conditions herein (this “Agreement”) and the
Transaction Documents (defined below), Bridgeline Digital, Inc., a
Delaware corporation (the “Company”), hereby agrees
to sell securities consisting of, (i) shares of Series C
Convertible Preferred Stock, par value $0.001 per share with
rights, preferences and privileges as set forth in the Certificate
of Designations attached as Exhibit A (each a “Preferred Share” and
collectively, the “Preferred Shares”), (ii)
Series A warrants to purchase Common Stock (the “Series A Warrants”) in
the form attached as Exhibit B; (iii) Series B
warrants to purchase Common Stock in the form attached as
Exhibit C (the
“Series B
Warrants”); and (iv) Series C warrants to purchase
Common Stock in the form attached as Exhibit D (the
“Series C
Warrants” and together with the Series A Warrants and
Series B Warrants, the “Warrants”), directly to
various investors (each, an “Investor” and,
collectively, the “Investors”) through
ThinkEquity, a division of Fordham Financial Management, Inc. and
Taglich Brothers Inc. (the “Placement Agents”), as
placement agents. The Securities (as defined herein) shall be
offered and sold pursuant to Section 4(a)(2) under the Securities
Act of 1933, as amended (the “Securities Act”). The
documents executed and delivered by the Company and the Investors
in connection with the Offering (as defined below), including,
without limitation, a securities purchase agreement (the
“Purchase
Agreement”) and a registration rights agreement (the
“RRA”)
shall be collectively referred to herein as the “Transaction Documents.”
The Purchase Price to the Investors for each Preferred Share and
related Warrants is $1,000. The exercise price to the Investors for
each share of Common Stock issuable upon exercise of the Series A
Warrants, Series B Warrants and Series C Warrants is $0.18, $0.18
and $0.001, respectively. The Placement Agent may retain other
brokers or dealers to act as sub-agents or selected-dealers on its
behalf in connection with the Offering (as defined below). The
Shares, the Preferred Shares, the Warrants, the shares of Common
Stock issuable upon conversion of the Preferred Shares (the
“Conversion
Shares”) and the shares of Common Stock issuable upon
exercise of the Warrants (the “Warrant Shares”) are
hereafter referred to as the “Securities”).
The
Company hereby confirms its agreement with the Placement Agent as
follows:
Section
1. Agreement to Act as Placement
Agent.
(a) 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 Agents shall be the exclusive Placement
Agents in connection with the offering and sale by the Company of
the Securities pursuant to Section 4(a)(2) under the Securities
Act, with the terms of such offering (the “Offering”) to be subject
to market conditions and negotiations between the Company, the
Placement Agent and the prospective Investors. The Placement Agents
will act on a reasonable best efforts basis and the Company agrees
and acknowledges that there is no guarantee of the successful
placement of the Securities, or any portion thereof, in the
prospective Offering. Under no circumstances will the Placement
Agents or any of its “Affiliates” (as defined below) be
obligated to underwrite or purchase any of the Securities for its
own account or otherwise provide any financing. The Placement
Agents shall act solely as the Company’s agent and not as
principal. The Placement Agents shall have no authority to bind the
Company with respect to any prospective offer to purchase
Securities and the Company shall have the sole right to accept
offers to purchase Securities and may reject any such offer, in
whole or in part. Subject to the terms and conditions hereof,
payment of the purchase price for, and delivery of, the Securities
shall be made at one or more closings (each a “Closing” and the date on
which each Closing occurs, a “Closing Date”). As
compensation for services rendered, on each Closing Date, the
Company shall pay to the Placement Agent the fees and expenses set
forth below:
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(i) A cash fee equal to
8% of the gross proceeds received by the Company from the sale of
the Securities at the Closing of the Offering to Investors;
provided,
however, the
Company shall not be required to pay such fee for the existing
investors of the Company or the investors set forth on Schedule A
attached hereto.
(ii) The
Company also agrees to pay to the Placement Agents $90,000 for
out-of-pocket expenses; provided, however, that in the event that
the Offering is terminated, the Company agrees to reimburse the
Placement Agents pursuant to Section 6 hereof.
(b) The Company hereby
agrees to issue to the Placement Agents (and/or its designees) on
the Closing Date, upon payment of $100.00 by the Placement Agents
on the Closing Date, warrants (“Placement Agent’s
Warrants”) to purchase that number of shares of Common
Stock equal to 5% of the aggregate number of Shares placed in the
Offering, plus any Shares underlying any convertible securities
Placed in the Offering. The Placement Agent’s Warrants shall
have the same terms, including exercise price and registration
rights, as the Series A Warrants issued to investors in the
Offering; provided,
however, in the
event no Warrants are issued to Investors, the exercise price of
the Placement Agent’s Warrants shall be 110% of the price at
which the Preferred Shares are sold to Investors provided, further that, in the event no
Preferred Shares are issued to Investors, the exercise price of the
Placement Agent’s Warrants shall be 110% of market price of
the Company’s Common Stock on the Closing Date. The Placement
Agent’s Warrant agreement, shall be exercisable, in whole or
in part, commencing on the issuance date and will have the same
terms as the Warrants issued to the Investors. The Placement
Agents’ Warrant Agreement and the shares of Common Stock and
Preferred Shares issuable upon exercise thereof are hereinafter
referred to together as the “Placement Agents’
Securities.” The Placement Agent understands and
agrees that there are significant restrictions pursuant to FINRA
Rule 5110 against transferring the Placement Agents’ Warrant
Agreement and the underlying Placement Agent’s Securities
during the one hundred eighty (180) days after the Closing Date and
by its acceptance thereof shall agree that it will not sell,
transfer, assign, pledge or hypothecate the Placement Agents’
Warrant Agreement, or any portion thereof, or be the subject of any
hedging, short sale, derivative, put or call transaction that would
result in the effective economic disposition of such securities for
a period of one hundred eighty (180) days following the Closing
Date to anyone other than (i) a selected dealer in connection with
the Offering, or (ii) a bona fide officer or partner of the
Placement Agents or selected dealer; and only if any such
transferee agrees to the foregoing lock-up restrictions. Delivery
of the Placement Agents’ Warrant Agreement shall be made on
the Closing Date and shall be issued in the name or names and in
such authorized denominations as the Placement Agents may
request.
(c) The term of the
Placement Agents' exclusive engagement will be until the completion
of the Offering (the “Exclusive Term”);
provided,
however, that a
party hereto may terminate the engagement with respect to itself at
any time upon fifteen (15) days written notice to the other
parties. Notwithstanding anything to the contrary contained herein,
the provisions concerning confidentiality, indemnification and
contribution contained herein and the Company’s obligations
contained in the indemnification provisions will survive any
expiration or termination of this Agreement, and the
Company’s obligation to pay fees actually earned and payable
and to reimburse expenses actually incurred and reimbursable
pursuant to Section 1 hereof and which are permitted to be
reimbursed under FINRA Rule 5110(f)(2)(D)(i), will survive any
expiration or termination of this Agreement. Nothing in this
Agreement shall be construed to limit the ability of the Placement
Agents or their Affiliates to pursue, investigate, analyze, invest
in, or engage in investment banking, financial advisory or any
other business relationship with Persons (as defined herein) other
than the Company. As used herein (i) “Persons” means an
individual or corporation, partnership, trust, incorporated or
unincorporated association, joint venture, limited liability
company, joint stock company, government (or an agency or
subdivision thereof) or other entity of any kind and (ii)
“Affiliate” means any
Person that, directly or indirectly through one or more
intermediaries, controls or is controlled by or is under common
control with a Person as such terms are used in and construed under
Rule 405 under the Securities Act.
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Section
2. Representations and Warranties. The
Company represents and warrants to the Placement Agents, as of the
date hereof and as of the Closing Date, all of the representations,
warranties and agreements of the Company that were made by the
Company to the Buyers (as defined in the Purchase Agreement) in
Section 3 of the Purchase Agreement, and that such representations
and warranties set forth in Section 3 thereof are hereby
incorporated by reference herein. The Company agrees to all of the
agreements and covenants in Section 4 of the Purchase Agreement
with respect to the Placement Agents and that such agreements and
covenants set forth in Section 4 thereof are incorporated by
reference herein.
Section
3. Delivery and Payment. Each Closing shall
occur at the offices of Gracin & Xxxxxx, LLP, The Chrysler
Building,405 Xxxxxxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx,
Xxx Xxxx 00000 (or at such other place as shall be agreed upon by
the Placement Agents and the Company) (“Placement Agent
Counsel”). Subject to the terms and conditions hereof,
at each Closing payment of the purchase price for the Securities
sold on such Closing Date shall be made by Federal Funds wire
transfer, against delivery of such Securities, and such Securities
shall be registered in such name or names and shall be in such
denominations, as the Placement Agents may request at least one (1)
business day before the time of purchase.
Deliveries of the
documents with respect to the purchase of the Securities, if any,
shall be made at the offices of Placement Agent Counsel. All
actions taken at a Closing shall be deemed to have occurred
simultaneously.
Section
4. Covenants and Agreements of the Company.
The Company further covenants and agrees with the Placement Agent
as follows:
(a) Intentionally
Omitted.
(b) Blue Sky Compliance. The
Company will cooperate with the Placement Agents and the Investors
in endeavoring to qualify the Securities for sale under the
securities laws of such jurisdictions (United States and foreign)
as the Placement Agents and the Investors may reasonably request
and will make such applications, file such documents, and furnish
such information as may be reasonably required for that purpose,
provided the Company shall not be required to qualify as a foreign
corporation or to file a general consent to service of process in
any jurisdiction where it is not now so qualified or required to
file such a consent, and provided further that the Company shall
not be required to produce any new disclosure document other than
the Transaction Documents. The Company will, from time to time,
prepare and file such statements, reports and other documents as
are or may be required to continue such qualifications in effect
for so long a period as the Placement Agents may reasonably request
for distribution of the Securities. The Company will advise the
Placement Agents promptly of the suspension of the qualification or
registration of (or any such exemption relating to) the Securities
for offering, sale or trading in any jurisdiction or any initiation
or threat of any proceeding for any such purpose, and in the event
of the issuance of any order suspending such qualification,
registration or exemption, the Company shall use its best efforts
to obtain the withdrawal thereof at the earliest possible
moment.
(c) Amendments and Supplements to the
Transaction Documents and Other Matters. The Company will
comply with the Securities Act and the Securities Exchange Act of
1934, and the rules and regulations of the Commission thereunder,
so as to permit the completion of the distribution of the
Securities as contemplated in this Agreement and the Transaction
Documents. If, prior to the termination of the Offering, any event
shall occur as a result of which, in the judgment of the Company or
in the opinion of the Placement Agents or counsel for the Placement
Agents, it becomes necessary to amend or supplement the Transaction
Documents in order to make the statements therein, in the light of
the circumstances under which they were made, as the case may be,
not misleading, or if it is necessary at any time to amend or
supplement the Transaction Documents, the Company will promptly
prepare and furnish at its own expense to the Placement Agent and
to dealers, an appropriate amendment or supplement to the
Transaction Documents that is necessary in order to make the
statements therein as so amended or supplemented, in the light of
the circumstances under which they were made, as the case may be,
not misleading, or so that the Transaction Documents, as so amended
or supplemented, will comply with law. Before amending or
supplementing Transaction Documents in connection with the
Offering, the Company will furnish the Placement Agents with a copy
of such proposed amendment or supplement and will disseminate any
such amendment or supplement to which the Placement Agents
reasonably objects.
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(d) Copies of any Amendments and
Supplements to the Transaction Documents. The Company will
furnish the Placement Agents, without charge, during the period
beginning on the date hereof and ending on the later of the last
Closing Date of the Offering, as many copies of the Transaction
Documents and any amendments and supplements thereto as the
Placement Agents may reasonably request.
(e) Intentionally
Omitted.
(f) Transfer Agent. The Company
will maintain, at its expense, a registrar and transfer agent for
the Common Stock and the Preferred Shares.
(g) Intentionally
Omitted.
(h) Intentionally
Omitted.
(i) Additional
Documents. The
Company will enter into any subscription, purchase or other
customary agreements as the Placement Agents or the Investors
reasonably deem necessary or appropriate to consummate the
Offering, all of which will be in form and substance reasonably
acceptable to the Placement Agents and the Investors. The Company
agrees that the Placement Agents may rely upon, and each is a third
party beneficiary of, the representations and warranties, and
applicable covenants, set forth in any such purchase, subscription
or other agreement with Investors in the Offering.
(j) No Manipulation of
Price. The
Company will not take, directly or indirectly, any action designed
to cause or result in, or that has constituted or might reasonably
be expected to constitute, the stabilization or manipulation of the
price of any securities of the Company.
(k) Acknowledgment. The Company
acknowledges that any advice given by the Placement Agents to the
Company is solely for the benefit and use of the Board of Directors
of the Company and may not be used, reproduced, disseminated,
quoted or referred to, without the Placement Agents' prior written
consent.
Intentionally
Omitted.
Section
5. Conditions of the Obligations of the Placement
Agents. The obligations of the Placement Agents hereunder
shall be subject to the accuracy of the representations and
warranties on the part of the Company set forth in Section 2
hereof, in each case as of the date hereof and as of each Closing
Date as though then made, to the timely performance by each of the
Company of its covenants and other obligations hereunder on and as
of such dates, and to each of the following additional
conditions:
(a) No Untrue Statements. The
Placement Agents shall not have discovered and disclosed to the
Company on or prior to the Closing Date that the SEC Filings
contains an untrue statement of a fact which, in the opinion of
Placement Agents’ Counsel, 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..
(b) Compliance with Regulatory
Requirements. No order having the effect of ceasing or
suspending the distribution of the Securities or any other
securities of the Company shall have been issued by any securities
commission, securities regulatory authority or stock exchange and
no proceedings for that purpose shall have been instituted or shall
be pending or, to the knowledge of the Company, contemplated by any
securities commission, securities regulatory authority or stock
exchange.
-4-
(c) Corporate Proceedings. All
corporate proceedings and other legal matters in connection with
this Agreement, the Transaction Documents, and the registration or
exemption therefrom, sale and delivery of the Securities, shall
have been completed or resolved in a manner reasonably satisfactory
to the Placement Agent Counsel, and such counsel shall have been
furnished with such papers and information as it may reasonably
have requested to enable such counsel to pass upon the matters
referred to in this Section 5.
(d) No Material Adverse Change.
Subsequent to the execution and delivery of this Agreement and
prior to each Closing Date, in the Placement Agents’ sole
judgment after consultation with the Company, there shall not have
occurred any Material Adverse Effect (as defined in the Purchase
Agreement).
(e) Opinion of Counsel for the
Company. The Placement Agents shall have received on each
Closing Date the favorable opinion of Disclosure Law Group, legal
counsel to the Company, dated as of such Closing Date.
(f) Secretary’s Certificate.
At the Closing Date, the Placement Agents shall have received a
certificate of the Company signed by the Secretary of the Company,
dated the Closing Date certifying: (i) that each of the
Company’s charter, bylaws and Certificate of Designation is
true and complete, has not been modified and is in full force and
effect; (ii) that the resolutions of the Company’s Board of
Directors relating to the Offering are in full force and effect and
have not been modified; (iii) as to the accuracy and completeness
of all correspondence between the Company or its counsel and the
Commission; and (iv) as to the incumbency of the officers of the
Company. The documents referred to in such certificate shall be
attached to such certificate..
(g) Officer’s Certificate..
The Placement Agents shall have received on each Closing Date a
certificate of the Company, dated as of such Closing Date, signed
by the Chief Executive Officer and Chief Financial Officer of the
Company, to the effect that, and the Placement Agents shall be
satisfied that, the signers of such certificate have reviewed this
Agreement and the Transaction Documents and to the further effect
that:
(h) Intentionally
Omitted.
(i) Stock Exchange Listing. The
Common Stock shall be registered under the Exchange Act and shall
be listed on the Trading Market, and the Company shall not have
taken any action designed to terminate, or likely to have the
effect of terminating, the registration of the Common Stock
under the Exchange Act or delisting or suspending from trading the
Common Stock from the Trading Market, nor shall the Company have
received any information suggesting that the Commission or the
Trading Market is contemplating terminating such registration or
listing. “Trading
Market” means the Nasdaq Capital Market.
(j) Placement Agents’ Warrant
Agreements. On or before the Closing Date, the Placement
Agents shall have received executed copies of the Placement
Agents’ Warrant Agreements, provided the Company has received
the Placement Agents’ designees for such Warrant Agreements
at least two (2) business days prior to Closing Date.
(k) Lock-Up Agreements. On or
before the date of this Agreement, the Company shall have delivered
to the Placement Agents executed copies of the Lock-Up Agreements
from each of the Lock-Up Parties set forth in the Purchase
Agreement.
(l) Additional Documents. On or
before each Closing Date, the Placement Agents and counsel for the
Placement Agents shall have received such information and documents
as they may reasonably require for the purposes of enabling them to
pass upon the issuance and sale of the Securities as contemplated
herein, or in order to evidence the accuracy of any of the
representations and warranties, or the satisfaction of any of the
conditions or agreements, herein contained.
-5-
If any
condition specified in this Section 5 is not satisfied when and as
required to be satisfied, this Agreement may be terminated by the
Placement Agents by notice to the Company at any time on or prior
to a Closing Date, which termination shall be without liability on
the part of any party to any other party, except that Section 6
(Payment of Expenses), Section 7 (Indemnification and Contribution)
and Section 8 (Representations and Indemnities to Survive Delivery)
shall at all times be effective and shall survive such
termination.
Section
6. Payment of Expenses. The Company agrees
to pay all costs, fees and expenses incurred by the Company in
connection with the performance of its obligations hereunder and in
connection with the transactions contemplated hereby, including,
without limitation: (i) all expenses incident to the issuance,
delivery and qualification of the Securities (including all
printing and engraving costs); (ii) all fees and expenses of the
registrar and transfer agent of the Common Stock and Preferred
Shares; (iii) all necessary issue, transfer and other stamp taxes
in connection with the issuance and sale of the Securities;
(iv) all fees and expenses of the Company’s counsel,
independent public or certified public accountants and other
advisors; (v) all costs and expenses incurred in connection with
the preparation, printing, filing, shipping and distribution of the
Transaction Documents, and all amendments and supplements thereto,
and this Agreement; (vi) all filing fees, reasonable
attorneys’ fees and expenses incurred by the Company or the
Placement Agents in connection with qualifying or registering (or
obtaining exemptions from the qualification or registration of) all
or any part of the Securities for offer and sale under the state
securities or blue sky laws or the securities laws of any other
country, and, if requested by the Placement Agents, preparing and
printing a “Blue Sky
Survey,” an “International Blue Sky
Survey” or other memorandum, and any supplements
thereto, advising the Placement Agents of such qualifications,
registrations and exemptions; (vii) the fees and expenses
associated with including the Securities on the Trading Market;
(viii) the costs associated with post-Closing advertising the
Offering in the national editions of the Wall Street Journal and
New York Times; and (ix) the fees and expenses of the Placement
Agents’ due diligence and legal counsel not to exceed
$90,000; provided,
however, if the
Engagement Agreement (as defined herein) between the Company and
ThinkEquity is terminated without an offering then such amount
shall not exceed $90,000. The Advance of $15,000 paid by the
Company in connection the Engagement Agreement, dated January 29,
2019 by and between the Company and ThinkEquity shall be applied
towards the fees and expenses of the Placement Agents’ due
diligence and legal counsel.
Section
7. Indemnification and
Contribution.
(a) The
Company agrees to indemnify and hold harmless the Placement Agents,
their Affiliates and each person controlling the Placement Agents
(within the meaning of Section 15 of the Securities Act), and the
directors, officers, agents and employees of the Placement Agents,
their Affiliates and each such controlling person (the Placement
Agents, and each such entity or person. an “Indemnified Person”) from
and against any losses, claims, damages, judgments, assessments,
costs and other liabilities (collectively, the “Liabilities”), and shall
reimburse each Indemnified Person for all fees and expenses
(including the reasonable fees and expenses of one counsel for all
Indemnified Persons, except as otherwise expressly provided herein)
(collectively, the “Expenses”) as they are
incurred by an Indemnified Person in investigating, preparing,
pursuing or defending any Actions, whether or not any Indemnified
Person is a party thereto, (i) caused by, or arising out of or in
connection with, any untrue statement or alleged untrue statement
of a material fact contained in any Transaction Document or by any
omission or alleged omission to state therein a material fact
necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading (other
than untrue statements or alleged untrue statements in, or
omissions or alleged omissions from, information relating to an
Indemnified Person furnished in writing by or on behalf of such
Indemnified Person expressly for use in the Transaction Documents)
or (ii) otherwise arising out of or in connection with advice or
services rendered or to be rendered by any Indemnified Person
pursuant to this Agreement, the transactions contemplated thereby
or any Indemnified Person's actions or inactions in connection with
any such advice, services or transactions; provided, however, that, the Company
shall not be responsible for any Liabilities or Expenses of any
Indemnified Person that are finally judicially determined to have
resulted solely from such Indemnified Person's (x) gross negligence
or willful misconduct in connection with any of the advice,
actions, inactions or services referred to above or (y) use of any
offering materials or information concerning the Company in
connection with the offer or sale of the Securities in the Offering
which were not authorized for such use by the Company and which use
constitutes gross negligence or willful misconduct. The Company
also agrees to reimburse each Indemnified Person for all Expenses
as they are incurred in connection with enforcing such Indemnified
Person's rights under this Agreement.
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(b) Upon
receipt by an Indemnified Person of actual notice of an Action
against such Indemnified Person with respect to which indemnity may
be sought under this Agreement, such Indemnified Person shall
promptly notify the Company in writing; provided that failure by
any Indemnified Person so to notify the Company shall not relieve
the Company from any liability which the Company may have on
account of this indemnity or otherwise to such Indemnified Person,
except to the extent the Company shall have been prejudiced by such
failure. The Company shall, if requested by the Placement Agent,
assume the defense of any such Action including the employment of
counsel reasonably satisfactory to the Placement Agents, which
counsel may also be counsel to the Company. Any Indemnified Person
shall have the right to employ separate counsel in any such action
and participate in the defense thereof, but the fees and expenses
of such counsel shall be at the expense of such Indemnified Person
unless: (i) the Company has failed promptly to assume the defense
and employ counsel or (ii) the named parties to any such Action
(including any impeded parties) include such Indemnified Person and
the Company, and such Indemnified Person shall have been advised in
the reasonable opinion of counsel that there is an actual conflict
of interest that prevents the counsel selected by the Company from
representing both the Company (or another client of such counsel)
and any Indemnified Person; provided that the Company shall not in
such event be responsible hereunder for the fees and expenses of
more than one firm of separate counsel for all Indemnified Persons
in connection with any Action or related Actions (as defined
herein), in addition to any local counsel. The Company shall not be
liable for any settlement of any Action effected without its
written consent (which shall not be unreasonably withheld). In
addition, the Company shall not, without the prior written consent
of the Placement Agents (which shall not be unreasonably withheld),
settle, compromise or consent to the entry of any judgment in or
otherwise seek to terminate any pending or threatened Action in
respect of which indemnification or contribution may be sought
hereunder (whether or not such Indemnified Person is a party
thereto) unless such settlement, compromise, consent or termination
includes an unconditional release of each Indemnified Person from
all Liabilities arising out of such Action for which
indemnification or contribution may be sought hereunder. The
indemnification required hereby shall be made by periodic payments
of the amount thereof during the course of the investigation or
defense, as such expense, loss, damage or liability is incurred and
is due and payable. “Action” means any action,
suit, inquiry, notice of violation, proceeding or investigation
affecting the Company, any Subsidiary or any of their respective
properties before or by any court, arbitrator, governmental or
administrative agency or regulatory authority (federal, state,
county, local or foreign).
(c) In
the event that the foregoing indemnity is unavailable to an
Indemnified Person other than in accordance with this Agreement,
the Company shall contribute to the Liabilities and Expenses paid
or payable by such Indemnified Person in such proportion as is
appropriate to reflect (i) the relative benefits to the Company, on
the one hand, and to the Placement Agents and any other Indemnified
Person, on the other hand, of the matters contemplated by this
Agreement or (ii) if the allocation provided by the immediately
preceding clause is not permitted by applicable law, not only such
relative benefits but also the relative fault of the Company, on
the one hand, and the Placement Agents and any other Indemnified
Person, on the other hand, in connection with the matters as to
which such Liabilities or Expenses relate, as well as any other
relevant equitable considerations; provided that in no event shall
the Company contribute less than the amount necessary to ensure
that all Indemnified Persons, in the aggregate, are not liable for
any Liabilities and Expenses in excess of the amount of fees
actually received by the Placement Agents pursuant to this
Agreement. For purposes of this paragraph, the relative benefits to
the Company, on the one hand, and to the Placement Agents on the
other hand, of the matters contemplated by this Agreement shall be
deemed to be in the same proportion as (a) the total value paid or
contemplated to be paid to or received or contemplated to be
received by the Company in the transaction or transactions that are
within the scope of this Agreement, whether or not any such
transaction is consummated, bears to (b) the fees paid to the
Placement Agents under this Agreement. Notwithstanding the above,
no person guilty of fraudulent misrepresentation within the meaning
of Section 11(f) of the Securities Act, as amended, shall be
entitled to contribution from a party who was not guilty of
fraudulent misrepresentation.
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(d) The
Company also agrees that no Indemnified Person shall have any
liability (whether direct or indirect, in contract or tort or
otherwise) to the Company for or in connection with advice or
services rendered or to be rendered by any Indemnified Person
pursuant to this Agreement, the transactions contemplated thereby
or any Indemnified Person's actions or inactions in connection with
any such advice, services or transactions except for Liabilities
(and related Expenses) of the Company that are finally judicially
determined to have resulted solely from such Indemnified Person's
gross negligence or willful misconduct in connection with any such
advice, actions, inactions or services.
(e) The
reimbursement, indemnity and contribution obligations of the
Company set forth herein shall apply to any modification of this
Agreement and shall remain in full force and effect regardless of
any termination of, or the completion of any Indemnified Person's
services under or in connection with, this Agreement.
Section
8. Representations and Indemnities to Survive
Delivery. The respective indemnities, agreements,
representations, warranties and other statements of the Company or
any person controlling the Company, of its officers, and of the
Placement Agents set forth in or made pursuant to this Agreement
will remain in full force and effect, regardless of any
investigation made by or on behalf of the Placement Agent, the
Company, or any of its or their partners, officers or directors or
any controlling person, as the case may be, and will survive
delivery of and payment for the Securities sold hereunder and any
termination of this Agreement. A successor to a Placement Agents,
or to the Company, its directors or officers or any person
controlling the Company, shall be entitled to the benefits of the
indemnity, contribution and reimbursement agreements contained in
this Agreement.
Section
9. Notices. All communications hereunder
shall be in writing and shall be mailed, hand delivered or
telecopied and confirmed to the parties hereto as
follows:
If to
the Placement Agent to:
ThinkEquity
00
Xxxxx Xxxxxx, 00xx Xxxxx
Xxx
Xxxx, XX 00000
Attn:
Xx. Xxxx Xxxx, Head of Investment Banking
Fax:
(000) 000-0000
Email:
xxxxxxx@xxxxx-xxxxxx.xxx
With a copy to:
Gracin
& Xxxxxx, LLP
The
Chrysler Building
000
Xxxxxxxxx Xxxxxx, 00xx Xxxxx Xxx Xxxx, XX
000000
Facsimile:
(000) 000-0000
Attention:
Xxxxxx Xxxxxx, Esq.
If to
the Company:
000
Xxxxxx Xxxxx
Xxxxxxxxxx,
XX 00000
Telephone:
(000) 000-0000
Attention: Xxx Xxxx, CEO
E-mail:
xxxxx@xxxxxxxxxx.xxx
with a copy (for informational purposes only) to:
Disclosure
Law Group, a Professional Corporation
000
Xxxx Xxxxxxxx, Xxxxx 000
Xxx
Xxxxx, XX 00000
Telephone:
(000) 000-0000
Facsimile:
(000) 000-0000
Attention:
Xxxxxx X. Xxxxxx, Esq.
Email:
xxxxxxx@xxxxxxxxxxxxxxxxxx.xxx
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Any
party hereto may change the address for receipt of communications
by giving written notice to the others.
Section
10. Right of First Refusal. The Placement
Agent shall have an irrevocable right of first refusal (the
“Right of First
Refusal”), to act as sole financial advisor, sole
investment banker, sole book-runner, and/or sole placement agent,
at the Placement Agent’s sole discretion, for each and every
future public and private equity and debt offering (each, a
“Subject
Transaction”), during the six (6) month period after
the Closing Date, of the Company, or any successor to or subsidiary
of the Company, on terms and conditions customary to the Placement
Agents for such Subject Transactions. For the avoidance of any
doubt, the Company shall not retain, engage or solicit any
additional investment banker, book-runner, financial advisor,
underwriter and/or placement agent in a Subject Transaction without
the express written consent of the Placement Agents.
Section
11. Successors. This Agreement will inure to
the benefit of and be binding upon the parties hereto, and to the
benefit of the employees, officers and directors and controlling
persons referred to in Section 7 hereof, and to their respective
successors, and personal representative, and no other person will
have any right or obligation hereunder.
Section
12. 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
13. Governing Law Provisions. This Agreement
shall be deemed to have been made and delivered in New York City
and both this Agreement and the transactions contemplated hereby
shall be governed as to validity, interpretation, construction,
effect and in all other respects by the internal laws of the State
of New York, without regard to the conflict of laws principles
thereof. Each of the Placement Agent and the Company: (i) agrees
that any legal suit, action or proceeding arising out of or
relating to this Agreement and/or the transactions contemplated
hereby shall be instituted exclusively in New York Supreme Court,
County of New York, or in the United States District Court for the
Southern District of New York, (ii) waives any objection which it
may have or hereafter to the venue of any such suit, action or
proceeding, and (iii) irrevocably consents to the jurisdiction of
the New York Supreme Court, County of New York, and the United
States District Court for the Southern District of New York in any
such suit, action or proceeding. Each of the Placement Agent and
the Company further agrees to accept and acknowledge service of any
and all process which may be served in any such suit, action or
proceeding in the New York Supreme Court, County of New York, or in
the United States District Court for the Southern District of New
York and agrees that service of process upon the Company mailed by
certified mail to the Company’s address shall be deemed in
every respect effective service of process upon the Company, in any
such suit, action or proceeding, and service of process upon the
Placement Agent mailed by certified mail to the Placement
Agent’s address shall be deemed in every respect effective
service process upon the Placement Agent, in any such suit, action
or proceeding. Notwithstanding any provision of this Agreement to
the contrary, the Company agrees that neither the Placement Agent
nor its Affiliates, and the respective officers, directors,
employees, agents and representatives of the Placement Agent, its
Affiliates and each other person, if any, controlling the Placement
Agent or any of its Affiliates, shall have any liability (whether
direct or indirect, in contract or tort or otherwise) to the
Company for or in connection with the engagement and transaction
described herein except for any such liability for losses, claims,
damages or liabilities incurred by us that are finally judicially
determined to have resulted from the bad faith or gross negligence
of such individuals or entities. If either party shall commence an
action or proceeding to enforce any provision of this Agreement,
then the prevailing party in such action or proceeding shall be
reimbursed by the other party for its reasonable attorney’s
fees and other costs and expenses incurred with the investigation,
preparation and prosecution of such action or
proceeding.
-9-
(a) 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. Notwithstanding anything
herein to the contrary, the Engagement Agreement, dated January 29,
2019, as amended February 4, 2019 (the “Engagement Agreement”),
between the Company and ThinkEquity shall continue to be effective
and the terms therein shall continue to survive and be enforceable
by the in accordance with its terms, provided that, in the event of
a conflict between the terms of the Engagement Agreement and this
Agreement, the terms of this Agreement shall prevail shall continue
to be effective and the terms therein shall continue to survive and
be enforceable by the Placement Agents in accordance with its
terms. This Agreement may be executed in two or more counterparts,
each one of which shall be an original, with the same effect as if
the signatures thereto and hereto were upon the same instrument.
This Agreement may not be amended or modified unless in writing by
all of the parties hereto, and no condition herein (express or
implied) may be waived unless waived in writing by each party whom
the condition is meant to benefit. Section headings herein are for
the convenience of the parties only and shall not affect the
construction or interpretation of this Agreement.
(b) The
Company acknowledges that in connection with the offering of the
Securities: (i) the Placement Agents have acted at arms length, are
not agents of, and owe no fiduciary duties to the Company or any
other person, (ii) the Placement Agent owes the Company only those
duties and obligations set forth in this Agreement and (iii) the
Placement Agents may have interests that differ from those of the
Company. The Company waives to the full extent permitted by
applicable law any claims it may have against the Placement Agents
arising from an alleged breach of fiduciary duty in connection with
the offering of the Securities.
Section
15. Fee Tail. ThinkEquity shall be entitled
to the Placement Fee and Placement Agent’s Warrants with
respect to any private or public financing or other capital raising
transaction of any kind consummated within 24 months period of the
termination or expiration of this Agreement with an investor whom
ThinkEquity has, directly or indirectly, introduced to the Company
in connection with the Offering or during the term of this
Agreement.
[The
remainder of this page has been intentionally left
blank.]
-10-
If the
foregoing is in accordance with your understanding of our
agreement, please sign below whereupon this instrument, along with
all counterparts hereof, shall become a binding agreement in
accordance with its terms.
Very
truly yours,
a
Delaware corporation
By:
Name:
Title:
The
foregoing Placement Agency Agreement is hereby confirmed and
accepted as of the date first above written.
THINKEQUITY, A DIVISION OF FORDHAM FINANCIAL MANAGEMENT,
INC.
By:
Name:
Title:
TAGLICH BROTHERS, INC.
By:
Name:
Title:
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Schedule A
Excluded
Investors
-12-
