EXHIBIT 1.1
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Execution Copy
ACACIA RESEARCH CORPORATION
3,000,000 Shares
Common Stock
($0.001 Par Value Per Share)
Designated as Acacia Research-CombiMatrix Common Stock
PLACEMENT AGENCY AGREEMENT
April 13, 2004
PLACEMENT AGENCY AGREEMENT
April 13, 2004
Xxxxxx Xxxxxx Partners LLC
Xxx Xxxxxxxxxx Xxxxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Xxxxx Xxxxxx & Co., Inc.
000 Xxxxxxxxx Xxx.
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Acacia Research Corporation, a Delaware corporation (the "Company"),
proposes to issue and sell to certain investors (collectively, the "Investors")
up to an aggregate of three million (3,000,000) shares (the "Shares") of Common
Stock, $0.001 par value per share, designated as Acacia Research-CombiMatrix
Common Stock (the "Common Stock"), of the Company. The Company desires to engage
Xxxxxx Xxxxxx Partners LLC ("TWP") as its exclusive lead placement agent and
Xxxxx Xxxxxx & Co., Inc. ("BMC") as its exclusive co-placement agent (TWC and
BMC, each a "Placement Agent" and, together, the "Placement Agents") in
connection with such issuance and sale. The Shares are described in the
Prospectus that is referred to below.
The Company has prepared and filed, in accordance with the provisions
of the Securities Act of 1933, as amended, and the rules and regulations
thereunder (collectively, the "Act"), with the Securities and Exchange
Commission (the "Commission") a registration statement under the Act on Form S-3
(File No. 333-112885) originally filed on February 17, 2004 (as amended, the
"registration statement"). The registration statement has been declared by the
Commission to be effective under the Act. The Company will next file with the
Commission pursuant to Rule 424(b) under the Act a final prospectus supplement
to the Basic Prospectus (as defined below), describing the Shares and the
offering thereof, in such form as has been provided to or discussed with, and
approved, by the Placement Agents.
The term "Registration Statement" as used in this Agreement means the
registration statement, at the time it became effective and as supplemented or
amended prior to the execution of this Agreement, including (i) all financial
schedules and exhibits thereto and (ii) all documents incorporated by reference
or deemed to be incorporated by reference therein. The term "Basic Prospectus"
as used in this Agreement means the basic prospectus dated as of March 17, 2004
that is part of the registration statement for use in connection with the offer
and/or sale of the Shares pursuant to this Agreement. The term "Prospectus
Supplement" as used in this Agreement means any final prospectus supplement
specifically relating to the Shares, in the form filed with, or transmitted for
filing to, the Commission pursuant to Rule 424 under the Act. The term
"Prospectus" as used in this Agreement means the Basic Prospectus together with
the Prospectus Supplement except that if such Basic Prospectus is amended or
supplemented on or prior to the date on which the Prospectus Supplement was
first filed pursuant to Rule 424, the term "Prospectus" shall refer to the Basic
Prospectus as so amended or supplemented and as supplemented by the Prospectus
Supplement. Any reference herein to the registration statement, the Registration
Statement, the Basic Prospectus, any Prospectus Supplement or the Prospectus
shall be deemed to refer to and include (i) the documents incorporated by
reference therein pursuant to Form S-3 (the "Incorporated Documents") and (ii)
the copy of the Registration Statement, the Basic Prospectus, the Prospectus
Supplement, the Prospectus or the Incorporated Documents filed with the
Commission pursuant to its Electronic Data Gathering, Analysis and Retrieval
system ("XXXXX"). Any reference herein to the terms "amend," "amendment" or
"supplement" with respect to the Registration Statement, the Prospectus
Supplement or the Prospectus shall be deemed to refer to and include the filing
of any document under the Securities Exchange Act of 1934, as amended, and the
rules and regulations thereunder (collectively, the "Exchange Act") after the
effective date of the Registration Statement, or the date of the Prospectus, as
the case may be, deemed to be incorporated therein by reference. As used herein,
"business day" shall mean a day on which the New York Stock Exchange (the
"NYSE") is open for trading.
The Company hereby confirms its agreement with each Placement Agent as
follows:
1. AGREEMENT TO ACT AS PLACEMENT AGENTS. Upon the basis of the
representations and warranties of the Company and subject to the terms and
conditions set forth in this Agreement the Company engages the Placement Agents
to act as its exclusive placement agents, on a best efforts basis, in connection
with the offer and sale by the Company of Shares to the Investors (the
"Offering"). As compensation to the Placement Agents for services rendered, at
the time of purchase (as defined below) the Company shall pay to TWP, by Federal
Funds wire transfer to an account or accounts designated by TWP, an amount equal
to (i) 8% of the first $5,000,000 in gross proceeds received by the Company in
the Offering, (ii) 7% of the next $5,000,000 in gross proceeds received by the
Company in the Offering, and (iii) 6% of all additional gross proceeds received
by the Company in the Offering; provided, however, no compensation shall be
payable to the Placement Agents for sales of Shares to strategic investors
purchasing stock in connection with entering into license, joint venture,
partnership or other related agreements with the Company ("Strategic Sales").
The Shares are being sold at a price of $5.00 per share. TWP may retain other
brokers or dealers to act as subagents on its behalf in connection with the
offering and sale of the Shares. Up to 15% of the aggregate compensation payable
to TWP hereunder may be allocated by TWP to BMC.
This Agreement shall not give rise to any commitment by the Placement
Agents or any of their affiliates to underwrite or purchase any of the Shares or
otherwise provide any financing, and the Placement Agents shall have no
authority to bind the Company in respect of the sale of any Shares. The sale of
the Shares shall be made pursuant to purchase agreements in the form included as
Exhibit A hereto (the "Purchase Agreements").
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2. PAYMENT AND DELIVERY. Subject to the terms and conditions hereof,
payment of the purchase price for, and delivery of certificates for, the Shares
shall be made at the office of Xxxxx Xxxxxxx Xxxx Xxxxxx & Xxxxxxx LLP, 0000
Xxxxxx xx xxx Xxxxx, Xxxxx 0000, Xxx Xxxxxxx, Xxxxxxxxxx 00000 (or at such other
place as shall be agreed upon by the Placement Agents and the Company), at 11:00
A.M., New York City time, on April 14, 2004 (unless another time shall be agreed
to by the Placement Agents and the Company). Subject to the terms and conditions
hereof, payment of the purchase price for the Shares shall be made to the
Company by Federal Funds wire transfer, against delivery of certificates for the
Shares, through the facilities of The Depository Trust Company ("DTC"), to such
persons, and shall be registered in such name or names and shall be in such
denominations, as the Placement Agents may request at least one business day
before the time of purchase (as defined below). Payment of the purchase price
for the Shares shall be made at the time of purchase by the purchasers thereof
directly to the Company. The time at which such payment and delivery are to be
made is hereinafter sometimes called "the time of purchase." Electronic transfer
of the Shares shall be made at the time of purchase in such names and in such
denominations as the Placement Agents shall specify.
Deliveries of the documents described in Section 6 hereof with respect
to the purchase of the Shares shall be made at the offices of Xxxxx Xxxxxxx Xxxx
Xxxxxx & Xxxxxxx LLP, 1901 Avenue of the Stars, Xxxxx 0000, Xxx Xxxxxxx,
Xxxxxxxxxx 00000, at 11:00 A.M., New York City time, on the date of the closing
of the purchase of the Shares.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to and agrees with each Placement Agent that, except as
may otherwise be set forth in the Registration Statement and the Prospectus:
(a) the Registration Statement has been declared effective
under the Act; no stop order of the Commission preventing or suspending the use
of the Basic Prospectus, the Prospectus Supplement or the Prospectus or the
effectiveness of the Registration Statement has been issued and no proceedings
for such purpose have been instituted or, to the Company's knowledge, are
contemplated by the Commission; the Company is eligible to use Form S-3; such
registration statement at the date of this Agreement meets, and the offering of
the Shares complies with, the requirements of Rule 415 under the Act. The
Registration Statement conformed when it became effective, conforms and will
conform, at the time of purchase, and the Basic Prospectus, the Prospectus
Supplement and the Prospectus conformed as of its date, conform and will conform
at the time of purchase in all material respects with the requirements of the
Act (including said Rule 415); any statutes, regulations, contracts or other
documents that are required to be described in the Registration Statement or the
Prospectus or to be filed as exhibits to the Registration Statement have been
and will be so described or filed; and the Registration Statement did not at the
time of effectiveness, does not and will not at the time of purchase contain an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not misleading,
and the Basic Prospectus, the Prospectus Supplement and the Prospectus did not
as of its date, does not and will not at the time of purchase contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; provided, however,
that the Company makes no warranty or representation with respect to any
statement contained in the Registration Statement or the Prospectus in reliance
upon and in conformity with information concerning a Placement Agent and
furnished in writing by or on behalf of such Placement Agent to the Company
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expressly for use in the Registration Statement or the Prospectus; the documents
incorporated by reference in the Basic Prospectus, the Prospectus Supplement,
the Registration Statement and the Prospectus, at the time they became effective
or were filed with the Commission, complied in all material respects with the
requirements of the Exchange Act and did not contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading; and the Company has not distributed and
will not distribute any offering material in connection with the offering or
sale of the Shares other than the Registration Statement, the then most recent
Prospectus Supplement and the Prospectus;
(b) as of the date of this Agreement, the Company has an
authorized and outstanding capitalization as set forth in the Registration
Statement and the Prospectus and, as of the time of purchase, the Company shall
have an authorized and outstanding capitalization as set forth in the
Registration Statement and the Prospectus (subject, in each case, to the
issuance of shares of Common Stock upon exercise of stock options and warrants
disclosed as outstanding in the Registration Statement and the Prospectus and
grant of options under existing stock option plans described in the Registration
Statement and the Prospectus); all of the issued and outstanding shares of
capital stock, including the Common Stock, of the Company have been duly
authorized and validly issued and are fully paid and non-assessable, have been
issued in material compliance with all federal and state securities laws and
were not issued in violation of any preemptive right, resale right, right of
first refusal or similar right;
(c) the Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State of
Delaware, with full corporate power and authority to own, lease and operate its
properties and conduct its business as described in the Registration Statement
and the Prospectus, to execute and deliver this Agreement and to issue, sell and
deliver the Shares as contemplated herein;
(d) the Company is duly qualified to do business as a foreign
corporation and is in good standing in each jurisdiction where the ownership or
leasing of its properties or the conduct of its business requires such
qualification, except where the failure to be so qualified and in good standing
would not, individually or in the aggregate, have a material adverse effect on
the business, properties, financial condition or results of operation of the
Company and the Subsidiaries (as hereinafter defined) taken as a whole (a
"Material Adverse Effect");
(e) the Company has no "significant subsidiaries" (as defined
in Rule 1-02 of Regulation S-X of the Act) other than as listed in Schedule A
annexed hereto (collectively, the "Subsidiaries"); the Company owns all of the
issued and outstanding capital stock of each of the Subsidiaries other than as
listed in Schedule A annexed hereto; other than the capital stock of the
Subsidiaries, the Company does not own, directly or indirectly, any shares of
stock or any 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 certificate of incorporation
and the bylaws of the Company and all amendments thereto have been delivered or
made available to the Placement Agents, and no changes therein will be made
subsequent to the date hereof and prior to the time of purchase; each Subsidiary
has been duly incorporated and is validly existing as a corporation in good
standing under the laws of the jurisdiction of its incorporation, with full
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corporate power and authority to own, lease and operate its properties and to
conduct its business as described in the Registration Statement and the
Prospectus; each Subsidiary is duly qualified to do business as a foreign
corporation and is in good standing in each jurisdiction where the ownership or
leasing of its properties or the conduct of its business requires such
qualification, except where the failure to be so qualified and in good standing
would not, individually or in the aggregate, have a Material Adverse Effect; all
of the outstanding shares of capital stock of each of the Subsidiaries have been
duly authorized and validly issued, are fully paid and non-assessable and are
owned by the Company subject to no security interest, other encumbrance or
adverse claims other than as listed in Schedule A annexed hereto; and no
options, warrants or other rights to purchase, agreements or other obligations
to issue or other rights to convert any obligation into shares of capital stock
or ownership interests in the Subsidiaries are outstanding other than as listed
in Schedule A annexed hereto;
(f) the Shares have been duly and validly authorized and, when
issued and delivered against payment therefor as provided herein and in the
Prospectus Supplement, will be duly and validly issued, fully paid and
non-assessable and free of statutory and contractual preemptive rights, resale
rights, rights of first refusal and similar rights;
(g) the capital stock of the Company, including the Shares,
conforms in all material respects to the description thereof contained in the
Registration Statement and the Prospectus and the certificates for the Shares
are in due and proper form;
(h) this Agreement has been duly authorized, executed and
delivered by the Company;
(i) the Company is not in breach or violation of or in default
under (nor has any event occurred which with notice, lapse of time or both would
result in any breach or violation of, constitute a default under or give the
holder of any indebtedness (or a person acting on such holder's behalf) the
right to require the repurchase, redemption or repayment of all or a part of
such indebtedness under) its certificate of incorporation or bylaws, or any
agreement filed as an exhibit or incorporated by reference in the Company's most
recent report on Form 10-K, and the execution, delivery and performance of this
Agreement, the issuance and sale of the Shares and the consummation of the
transactions contemplated hereby will not conflict with, result in any breach or
violation of or constitute a default under (nor constitute any event which with
notice, lapse of time or both would result in any breach or violation of or
constitute a default under or give the holder of any indebtedness (or a person
acting on such holder's behalf) the right to require the repurchase, redemption
or repayment of all or a part of such indebtedness under) the certificate of
incorporation or bylaws of the Company, or any agreement filed as an exhibit or
incorporated by reference in the Company's most recent report on Form 10-K, or
any federal, state, local or foreign law, regulation or rule or any decree,
judgment or order applicable to the Company;
(j) no approval, authorization, consent or order of or filing
with any federal, state, local or foreign governmental or regulatory commission,
board, body, authority or agency or of or with the Nasdaq National Market, or
approval of the shareholders of the Company, is required in connection with the
issuance and sale of the Shares or the consummation by the Company of the
transactions contemplated hereby other than registration under the Act of the
offer and sale of the Shares, which has been effected, and any necessary
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qualification under the securities or blue sky laws of the various jurisdictions
in which the Shares are being offered under the terms of this Agreement or under
the rules and regulations of the National Association of Securities Dealers,
Inc. ("NASD"); the Company is eligible to use Form S-3 pursuant to the standards
for Form S-3 prior to October 21, 1992;
(k) (i) no person has the right, contractual or otherwise, to
cause the Company to issue or sell to it any shares of Common Stock or shares of
any other capital stock or other equity interests of the Company, (ii) no person
has any preemptive rights, resale rights, rights of first refusal or other
rights to purchase any shares of Common Stock or shares of any other capital
stock or other securities of the Company, and (iii) except as provided herein
and in the letter agreement dated March 25, 2004 between the Company and TWP
(the "Engagement Letter"), no person has the right to act as an underwriter,
placement agent or financial advisor to the Company in connection with the offer
and sale of the Shares, in the case of each of the foregoing clauses (i), (ii)
and (iii), either as a result of the filing or effectiveness of the Registration
Statement or the sale of the Shares as contemplated thereby; no person has the
right, contractual or otherwise, to cause the Company to register under the Act
any shares of Common Stock or shares of any other capital stock or other
securities of the Company, or to include any such shares or interests in the
Registration Statement or the offering contemplated thereby, whether as a result
of the filing or effectiveness of the Registration Statement or the sale of the
Shares as contemplated thereby or otherwise;
(l) each of the Company and the Subsidiaries has all necessary
licenses, authorizations, consents and approvals and has made all necessary
filings required under any federal, state, local or foreign law, regulation or
rule, and has obtained all necessary authorizations, consents and approvals from
other persons, in order to conduct its respective business, except where the
failure to do so would not, individually or in the aggregate, have a Material
Adverse Effect; neither the Company nor any of the Subsidiaries is in violation
of, or in default under, or has received notice of any proceedings relating to
revocation or modification of, any such license, authorization, consent or
approval or any federal, state, local or foreign law, regulation or rule or any
decree, order or judgment applicable to the Company or any of the Subsidiaries,
except where such violation, default, revocation or modification would not,
individually or in the aggregate, have a Material Adverse Effect;
(m) all legal or governmental proceedings, affiliate
transactions, off-balance sheet transactions, contracts, licenses, agreements,
leases or documents 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 have been so described or filed as required;
(n) there are no actions, suits, claims or investigations or
proceedings pending or, to the knowledge of the Company, threatened against the
Company or any of the Subsidiaries , before or by any federal, state, local or
foreign governmental or regulatory commission, board, body, authority or agency,
except any such action, suit, claim, investigation or proceeding which would not
reasonably be expected to result in a judgment, decree or order having,
individually or in the aggregate, a Material Adverse Effect or prevent
consummation of the transactions contemplated hereby;
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(o) PricewaterhouseCoopers LLP, whose report on the
consolidated financial statements of the Company and the Subsidiaries is filed
with the Commission as part of the Registration Statement and the Prospectus,
are independent public accountants as required by the Act;
(p) the audited financial statements included in the
Registration Statement and the Prospectus, together with the related notes and
schedules, present fairly in all material respects the consolidated financial
position of the Company and the Subsidiaries as of the dates indicated and the
consolidated results of operations and cash flows of the Company and the
Subsidiaries for the periods specified and have been prepared in compliance with
the requirements of the Act and in conformity with generally accepted accounting
principles applied on a consistent basis during the periods involved; any pro
forma financial statements or data included in the Registration Statement and
the Prospectus comply in all material respects with the requirements of
Regulation S-X of the Act, the assumptions used in the preparation of such pro
forma financial statements and data are reasonable, the pro forma adjustments
used therein are appropriate to give effect to the transactions or circumstances
described therein, subject to normal adjustments and reclassifications, and the
pro forma adjustments have been properly applied to the historical amounts in
the compilation of those statements and data; the other financial and
statistical data set forth in the Registration Statement and the Prospectus are
accurately presented in all material respects and prepared on a basis consistent
with the financial statements and books and records of the Company; there are no
financial statements (historical or pro forma) that are required to be included
in the Registration Statement and the Prospectus that are not included as
required; and the Company and the Subsidiaries do not have any material
liabilities or obligations, direct or contingent (including any off-balance
sheet obligations), not disclosed in the Registration Statement and the
Prospectus;
(q) subsequent to the respective dates as of which information
is given in the Registration Statement and the Prospectus, there has not been
(i) any material adverse change in the business, properties, management,
financial condition or results of operations of the Company and the Subsidiaries
taken as a whole, (ii) any transaction which is material to the Company and the
Subsidiaries taken as a whole, (iii) any obligation, direct or contingent
(including any off-balance sheet obligations), incurred by the Company or the
Subsidiaries, which is material to the Company and the Subsidiaries taken as a
whole, (iv) any change in the capital stock or outstanding indebtedness of the
Company or the Subsidiaries (subject to the issuance of shares of Common Stock
upon issuance of stock options and warrants disclosed as outstanding in the
Registration Statement and Prospectus and grant of options under existing stock
option plans described in the Registration Statement and Prospectus) or (v) any
dividend or distribution of any kind declared, paid or made on the capital stock
of the Company;
(r) neither the Company nor any of the Subsidiaries is nor,
after giving effect to the offering and sale of the Shares, will any of them be
an "investment company" or an entity "controlled" by an "investment company," as
such terms are defined in the Investment Company Act of 1940, as amended (the
"Investment Company Act") or a "passive foreign investment company" or a
"controlled foreign corporation" as such terms are defined in the Internal
Revenue Code;
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(s) the Company and each of the Subsidiaries has good and
valid title to all property (real and personal) described the Registration
Statement and in the Prospectus as being owned by each of them, free and clear
of all liens, claims, security interests or other encumbrances, except as do not
materially and adversely affect the value of such property and do not materially
interfere with the use made of such property by the Company; all the property
described in the Registration Statement and the Prospectus as being held under
lease by the Company or a Subsidiary is held thereby under valid and subsisting
leases;
(t) the Company and the Subsidiaries own, or have obtained
valid and enforceable licenses for, or other rights to use, the inventions,
patent applications, patents, trademarks (both registered and unregistered),
tradenames, copyrights, trade secrets and other proprietary information
described in the Registration Statement and the Prospectus as being owned or
licensed by them or which are necessary for the conduct of their respective
businesses, except where the failure to own, license or have such rights would
not, individually or in the aggregate, have a Material Adverse Effect
(collectively, "Intellectual Property"). There are no third parties who have
asserted any written claims to existing rights to any Intellectual Property
except for the ownership rights of the owners of the Intellectual Property which
is licensed to the Company. To the Company's knowledge, there is no infringement
by third parties of any Intellectual Property. To the Company's knowledge, there
is no pending or threatened action, suit, proceeding or claim by others
challenging the Company's rights in or to any Intellectual Property. To the
Company's knowledge, there is no pending or threatened action, suit, proceeding
or claim by others challenging the validity or scope of any Intellectual
Property. To the Company's knowledge, there is no pending or threatened action,
suit, proceeding or claim by others that the Company infringes or otherwise
violates any patent, trademark, copyright, trade secret or other proprietary
rights of others;
(u) to the Company's knowledge, neither the Company nor any of
the Subsidiaries is engaged in any unfair labor practice; except for matters
which would not, individually or in the aggregate, have a Material Adverse
Effect, (i) there is (A) to the Company's knowledge, no unfair labor practice
complaint pending or threatened against the Company or any of the Subsidiaries
before the National Labor Relations Board, and no grievance or arbitration
proceeding arising out of or under collective bargaining agreements is pending
or threatened, (B) to the Company's knowledge, no strike, labor dispute,
slowdown or stoppage pending or threatened against the Company or any of the
Subsidiaries and (C) no union representation dispute currently existing
concerning the employees of the Company or any of the Subsidiaries, and (ii) to
the Company's knowledge, (A) no union organizing activities are currently taking
place concerning the employees of the Company or any of the Subsidiaries and (B)
there has been no violation of any federal, state, local or foreign law relating
to discrimination in the hiring, promotion or pay of employees, any applicable
wage or hour laws or any provision of the Employee Retirement Income Security
Act of 1974 ("ERISA") or the rules and regulations promulgated thereunder
concerning the employees of the Company or any of the Subsidiaries;
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(v) to the Company's knowledge, the Company and the
Subsidiaries and their properties, assets and operations are in compliance with,
and hold all permits, authorizations and approvals required under, Environmental
Laws (as defined below), except to the extent that failure to so comply or to
hold such permits, authorizations or approvals would not, individually or in the
aggregate, have a Material Adverse Effect; there are no past, present or, to the
Company's knowledge, reasonably anticipated future events, conditions,
circumstances, activities, practices, actions, omissions or plans that could
reasonably be expected to give rise to any material costs or liabilities to the
Company or the Subsidiaries under, or to interfere with or prevent compliance by
the Company or the Subsidiaries with, Environmental Laws; except as would not,
individually or in the aggregate, have a Material Adverse Effect, neither the
Company nor any of the Subsidiaries (i) to the Company's knowledge, is the
subject of any investigation, (ii) has received any notice or claim, (iii) is a
party to or affected by any pending or, to the Company's knowledge, threatened
action, suit or proceeding, (iv) is bound by any judgment, decree or order or
(v) has entered into any agreement, in each case relating to any alleged
violation of any Environmental Law or any actual or alleged release or
threatened release or cleanup at any location of any Hazardous Materials (as
defined below) (as used herein, "Environmental Law" means any federal, state,
local or foreign law, statute, ordinance, rule, regulation, order, decree,
judgment, injunction, permit, license, authorization or other binding
requirement, or common law, relating to health, safety or the protection,
cleanup or restoration of the environment or natural resources, including those
relating to the distribution, processing, generation, treatment, storage,
disposal, transportation, other handling or release or threatened release of
Hazardous Materials, and "Hazardous Materials" means any material (including,
without limitation, pollutants, contaminants, hazardous or toxic substances or
wastes) that is regulated by or may give rise to liability under any
Environmental Law);
(w) all tax returns required to be filed by the Company and
each of the Subsidiaries have been filed, and all taxes and other assessments of
a similar nature (whether imposed directly or through withholding) including any
interest, additions to tax or penalties applicable thereto due or claimed to be
due from such entities have been paid, other than those being contested in good
faith and for which adequate reserves have been provided;
(x) the Company and each of the Subsidiaries maintains
insurance covering its properties, operations, personnel and businesses as the
Company deems adequate; such insurance insures against such losses and risks to
an extent which is adequate in accordance with customary industry practice to
protect the Company and the Subsidiaries and their businesses; all such
insurance is fully in force on the date hereof and will be fully in force at the
time of purchase;
(y) neither the Company nor any of the Subsidiaries has
sustained since the date of the last audited financial statements included in
the Registration Statement and the Prospectus any material loss or interference
with its respective business from fire, explosion, flood or other calamity,
whether or not covered by insurance, or from any labor dispute or court or
governmental action, order or decree;
(z) except for the normal expiration of contracts or
agreements in accordance with the terms of any such contract or agreement,
including upon the completion of all obligations thereunder by a party thereto,
the Company has not sent or received any written communication regarding
termination of, or intent not to renew, any of the contracts or agreements
referred to or described in, or filed as an exhibit to, the Registration
Statement, and no such termination or non-renewal has been threatened by the
Company or, to the Company's knowledge, any other party to any such contract or
agreement, except for such terminations or non-renewals which individually or in
the aggregate would not have a Material Adverse Effect;
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(aa) the Company and each of the Subsidiaries 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;
(bb) the Company has established and maintains disclosure
controls and procedures (as such term is defined in Rule 13a-15(e) and 15d-15(e)
under the Exchange Act); such disclosure controls and procedures are designed to
ensure that material information relating to the Company, including its
consolidated Subsidiaries, is made known to the Company's Chief Executive
Officer and its Chief Financial Officer by others within those entities, and
such disclosure controls and procedures are effective at a reasonable level to
perform the functions for which they were established; the Company's auditors
and the Audit Committee of the Board of Directors have been advised of: (i) any
significant deficiencies in the design or operation of internal controls which
would reasonably be expected to adversely affect the Company's ability to
record, process, summarize, and report financial data; and (ii) any fraud that
involves management or other employees who have a role in the Company's internal
controls; any material weaknesses in internal controls have been identified for
the Company's auditors; the principal executive officers (or their equivalents)
and principal financial officers (or their equivalents) of the Company have made
all certifications required by the Xxxxxxxx-Xxxxx Act of 2002 (the
"Xxxxxxxx-Xxxxx Act") and any related rules and regulations promulgated by the
Commission, and the statements contained in any such certification are complete
and correct in all material respects; and the Company is otherwise in compliance
in all material respects with all applicable provisions of the Xxxxxxxx-Xxxxx
Act that are effective;
(cc) the Company has provided the Placement Agents true,
correct, and complete copies of all documentation pertaining to any extension of
credit in the form of a personal loan made, directly or indirectly, by the
Company to any director or executive officer of the Company, or to any family
member or affiliate of any director or executive officer of the Company; and
since July 30, 2002, the Company has not, directly or indirectly, including
through any subsidiary: (i) extended credit, arranged to extend credit, or
renewed any extension of credit, in the form of a personal loan, to or for any
director or executive officer of the Company, or to or for any family member or
affiliate of any director or executive officer of the Company; or (ii) made any
material modification, including any renewal thereof, to any term of any
personal loan to any director or executive officer of the Company, or any family
member or affiliate of any director or executive officer, which loan was
outstanding on July 30, 2002;
(dd) any statistical and market-related data included in the
Registration Statement and the Prospectus are based on or derived from sources
that the Company believes to be reliable and accurate, and the Company has
obtained the consent to the use of such data from such sources to the extent
required;
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(ee) neither the Company nor any of the Subsidiaries nor, to
the Company's knowledge, any employee of the Company or the Subsidiaries has
made any payment of funds of the Company or the Subsidiaries or received or
retained any funds in violation of any law, rule or regulation, which payment,
receipt or retention of funds is of a character required to be disclosed in the
Registration Statement or the Prospectus;
(ff) neither the Company nor any of the Subsidiaries, nor to
the Company's knowledge, any of their respective directors, officers, affiliates
or controlling persons has taken, directly or indirectly, any action designed,
or which has constituted or might reasonably be expected to cause or result in,
under the Exchange Act or otherwise, the stabilization or manipulation of the
price of any security of the Company to facilitate the sale or resale of the
Shares;
(gg) to the Company's knowledge, there are no affiliations or
associations between any member of the NASD and any of the Company's officers,
directors or 5% or greater securityholders, except as set forth in the
Registration Statement and the Prospectus; and
(hh) the Company has not offered, or caused any Placement
Agent to offer, Shares to any person with the intent to influence unlawfully (i)
a customer or supplier of the Company or any of the Subsidiaries to alter the
customer's or supplier's level or type of business with the Company or any of
the Subsidiaries, or (ii) a trade journalist or publication to write or publish
favorable information about the Company or any of the Subsidiaries or any of
their respective products or services.
4. CERTAIN COVENANTS OF THE COMPANY. The Company hereby agrees:
(a) to furnish such information as may be required and
otherwise to cooperate in qualifying the Shares for offering and sale under the
securities or blue sky laws of such states or other jurisdictions as the
Placement Agents may designate and to maintain such qualifications in effect so
long as the Placement Agents may request for the distribution of the Shares;
provided that the Company shall not be required to qualify as a foreign
corporation or to consent to the service of process under the laws of any such
jurisdiction (except service of process with respect to the offering and sale of
the Shares); and to promptly advise the Placement Agents of the receipt by the
Company of any notification with respect to the suspension of the qualification
of the Shares for sale in any jurisdiction or the initiation or threatening of
any proceeding for such purpose;
(b) to make available to the Placement Agents and to furnish
to the Placement Agents as many copies of the Prospectus (or of the Prospectus
as amended or supplemented if the Company shall have made any amendments or
supplements thereto after the effective date of the Registration Statement) as
the Placement Agents may reasonably request for the purposes contemplated by the
Act;
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(c) if, at the time this Agreement is executed and delivered,
it is necessary for the Registration Statement or any post-effective amendment
thereto to be declared effective before the Shares may be sold, the Company will
endeavor to cause the Registration Statement or such post-effective amendment to
become effective as soon as reasonably possible and the Company will advise the
Placement Agents promptly and, if requested by the Placement Agents, will
confirm such advice in writing, (i) when the Registration Statement and any such
post-effective amendment thereto has become effective, and (ii) if Rule 430A
under the Act is used, when the Prospectus is filed with the Commission pursuant
to Rule 424(b) under the Act (which the Company agrees to file in a timely
manner under such Rule);
(d) to advise the Placement Agents promptly of any request by
the Commission for amendments or supplements to the Registration Statement or
the Prospectus or for additional information with respect thereto, or of notice
of institution of proceedings for, or the entry of a stop order, suspending the
effectiveness of the Registration Statement and, if the Commission should enter
a stop order suspending the effectiveness of the Registration Statement, to use
its commercially reasonable efforts to obtain the lifting or removal of such
order as soon as reasonably possible; to advise the Placement Agents promptly of
any proposal to amend or supplement the Registration Statement or the Prospectus
to provide the Placement Agents and their counsel copies of any such documents
for review and comment a reasonable amount of time prior to any proposed filing
and to file no such amendment or supplement to which any Placement Agent shall
object in writing;
(e) subject to Section 4(d) hereof, to file promptly all
reports and any definitive proxy or information statement required to be filed
by the Company with the Commission in order to comply with the Exchange Act
subsequent to the date of the Prospectus and for so long as the delivery of a
prospectus is required in connection with the offering or sale of the Shares;
(f) to advise the Placement Agents promptly of the happening
of any event within the time during which a prospectus relating to the Shares is
required to be delivered under the Act which would require the making of any
change in the Prospectus then being used so that the Prospectus would not
include an untrue statement of material fact or omit to state a material fact
necessary to make the statements therein, in the light of the circumstances
under which they are made, not misleading, and, during such time, subject to
Section 4(d) hereof, to prepare and furnish, at the Company's expense, to the
Placement Agents promptly such amendments or supplements to such Prospectus as
may be necessary to reflect any such change;
(g) to make generally available to its security holders, and
to deliver to the Placement Agents, an earnings statement of the Company (which
will satisfy the provisions of Section 11(a) of the Act) covering a period of
twelve months beginning after the effective date of the Registration Statement
(as defined in Rule 158(c) under the Act) as soon as is reasonably practicable
after the termination of such twelve-month period;
(h) to comply with all the undertakings contained in the
Registration Statement;
(i) to apply the net proceeds from the sale of the Shares in
the manner set forth under the caption "Use of Proceeds" in the Prospectus;
-12-
(j) to reimburse TWP for expenses as set forth in the
Engagement Letter and to pay all costs, expenses, fees (including, without
limitation, legal fees and expenses) and taxes in connection with (i) the
preparation and filing of the Registration Statement, the Basic Prospectus, each
Prospectus Supplement, the Prospectus, and any amendments or supplements
thereto, and the printing and furnishing of copies of each thereof to the
Placement Agents (including costs of mailing and shipment), (ii) the
registration, issue, sale and delivery of the Shares including any stock or
transfer taxes and stamp or similar duties payable upon the sale, issuance or
delivery of the Shares, (iii) the qualification of the Shares for offering and
sale under state or foreign laws and the determination of their eligibility for
investment under state or foreign law as aforesaid and the printing and
furnishing of copies of any blue sky surveys or legal investment surveys to the
Placement Agents and to dealers, (iv) qualification of the Shares for quotation
on Nasdaq and any registration thereof under the Exchange Act, (v) any filing
for review of the public offering of the Shares by the NASD, (vi) the fees and
disbursements of any transfer agent or registrar for the Shares, (vii) the costs
and expenses of the Company relating to any presentations or meetings undertaken
in connection with the marketing of the offering and sale of the Shares to
prospective investors and the Placement Agents' sales forces, including, without
limitation, expenses associated with the production of road show slides and
graphics, fees and expenses of any consultants engaged in connection with the
road show presentations, travel, lodging and other expenses incurred by the
officers of the Company and any such consultants, and the cost of any aircraft
chartered in connection with the road show and (viii) the performance of the
Company's other obligations hereunder; provided that the Company shall not be
obligated to reimburse TWP for legal expenses and fees in excess of $60,000 and
for all other expenses in excess of $50,000;
(k) to use its best efforts to cause the qualification of the
Shares for quotation on the Nasdaq National Market;
(l) not to sell, offer to sell, contract or agree to sell,
hypothecate, pledge, grant any option to purchase or otherwise dispose of or
agree to dispose of, directly or indirectly, any Common Stock or securities
convertible into or exchangeable or exercisable for Common Stock or warrants or
other rights to purchase Common Stock or any other securities of the Company
that are substantially similar to Common Stock, or file or cause to be declared
effective a registration statement under the Act relating to the offer and sale
of any shares of Common Stock or securities convertible into or exercisable or
exchangeable for Common Stock or other rights to purchase Common Stock or any
other securities of the Company that are substantially similar to Common Stock
for a period of 30 days after the date hereof (the "Lock-Up Period"), without
the prior written consent of the Placement Agents, except for (i) the
registration of the Shares and the sales of the Shares pursuant to this
Agreement, (ii) issuances of Common Stock upon the exercise of options or
warrants disclosed as outstanding in the Registration Statement and the
Prospectus, and (iii) the issuance of stock options to employees and other
service providers pursuant to stock option plans described in the Registration
Statement and the Prospectus;
(m) to maintain a transfer agent for its Common Stock; and
(n) if, at the time this Agreement is executed and delivered,
it is necessary for a post-effective amendment to the Registration Statement to
be declared effective before the offering of the Shares may commence, the
Company will endeavor to cause such post-effective amendment to become effective
-13-
as soon as possible and will advise each Placement Agent promptly and, if
requested by such Placement Agent, will confirm such advice in writing, when
such post-effective amendment has become effective.
5. REIMBURSEMENT OF PLACEMENT AGENTS' EXPENSES. If this Agreement is
terminated by the Placement Agents pursuant to Section 6 or Section 7, or if the
sale to the Investors of the Shares at the time of purchase is not consummated
because of any refusal, inability or failure on the part of the Company to
perform any agreement herein or to comply with any provision hereof, the Company
shall, in addition to paying the amounts described in Section 4(j) hereof, and
subject to the limitations set forth in the Engagement Letter, reimburse the
Placement Agents for all of their out-of-pocket expenses, including the fees and
disbursements of their counsel.
6. CONDITIONS OF PLACEMENT AGENTS' OBLIGATIONS. The obligations of each
Placement Agent hereunder are subject to the accuracy of the representations and
warranties on the part of the Company on the date hereof and at the time of
purchase and the performance by the Company of its obligations hereunder and to
the following additional conditions precedent:
(a) The Company shall furnish to each Placement Agent at the
time of purchase an opinion of Xxxxx Xxxxxxx Xxxx Xxxxxx & Xxxxxxx LLP, counsel
for the Company, addressed to the Placement Agents, and dated the time of
purchase, in form and substance reasonably satisfactory to Xxxxxx Xxxxxxx
Xxxxxxxx & Xxxxxx, Professional Corporation, counsel for the Placement Agents,
stating that:
(i) the Company has been duly incorporated and is
validly existing as a corporation in good standing under the laws of the State
of Delaware, with corporate power and authority to own, lease and operate its
properties and conduct its business as described in the Registration Statement
and the Prospectus, to execute and deliver this Agreement and to issue, sell and
deliver the Shares as contemplated herein;
(ii) the Company is duly qualified to do business as
a foreign corporation in good standing in each jurisdiction in which it owns or
leases real property or maintains an office, and in which such qualification is
necessary, except where the failure to be so qualified and in good standing
would not, individually or in the aggregate, have a Material Adverse Effect;
(iii) this Agreement has been duly authorized,
executed and delivered by the Company;
(iv) the Shares have been duly authorized and upon
payment for and delivery of the Shares in accordance with this Agreement and the
Prospectus and the countersigning of the certificate or certificates
representing the Shares by a duly authorized officer of the registrar for the
Company's Common Stock, the Shares will be validly issued, fully paid and
non-assessable; the Shares are free of statutory preemptive rights and, to such
counsel's knowledge, there are no contractual preemptive rights, resale rights,
rights of first refusal or similar rights contained in any agreement filed as an
exhibit or incorporated by reference in the Company's most recent report on Form
10-K..
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(v) the authorized and outstanding capital stock of
the Company consists of: (i) 10,000,000 shares of Preferred Stock, par value
$0.001 per share, none of which are issued or are outstanding, (ii) 50,000,000
shares of a class of Common Stock, par value $0.001 per share, designated as
Acacia Research-CombiMatrix Common Stock, of which _______ shares are issued and
outstanding, and (iii) 50,000,000 shares of a class of Common Stock, par value
$0.001 per share, designated as Acacia Research-Acacia Technologies Common
Stock, of which ____________ shares are issued and outstanding; the outstanding
shares of capital stock of the Company have been duly authorized by all
necessary corporate action on the part of the Company and are validly issued,
fully paid and non-assessable;
(vi) the Shares conform in all material respects to
the descriptions thereof contained in the Registration Statement and the
Prospectus;
(vii) the Registration Statement and the Prospectus
(except as to the financial statements and other financial and statistical data
contained or incorporated by reference therein, as to which such counsel need
express no opinion), on the date it was filed, appeared on its face to comply in
all material respects with the requirements of the Act; and the documents
incorporated by reference in the Registration Statement and the Prospectus
(except as to the financial statements and other financial and statistical data
contained or incorporated by reference therein, as to which such counsel need
express no opinion), at the time they became effective or were filed with the
Commission, appeared on their face to comply in all material respects with the
requirements of the Exchange Act.
(viii) the Registration Statement has become
effective under the Act and, to such counsel's knowledge, no stop order
suspending the effectiveness of the Registration Statement has been issued or,
to such counsel's knowledge, threatened and, to such counsel's knowledge, no
proceedings for that purpose have been instituted by the Commission;
(ix) no order, consent, permit or approval of any
California or federal governmental authority is required on the part of the
Company for the execution and delivery of this Agreement or for the sale and
delivery of the Shares, other than such as have been obtained under the Act, and
such counsel need express no opinion as to any necessary qualification under the
state securities or blue sky laws of the various jurisdictions in which the
Shares are being offered;
(x) the execution and delivery of, and performance of
its obligations under, this Agreement do not (i) violate the Company's charter
documents or bylaws, (ii) violate, breach or result in a default under, any
existing obligation of the Company under any agreement filed as an exhibit or
incorporated by reference in the Company's most recent reports on Form 10-K and
Form 10-Q, or in the Prospectus, or (iii) result in the creation or imposition
of any lien, charge, claim or encumbrance upon any property or assets of the
Company, except, with respect to (ii) and (iii) above, for breaches, violations,
defaults, liens, charges, claims or encumbrances that would not reasonably be
expected to have a Material Adverse Effect;
(xi) such counsel does not know of any contract or
other document of a character required to be filed as an exhibit to the
Registration Statement or required to be described in the Registration Statement
or Prospectus which is not filed or described as required;
-15-
(xii) to such counsel's knowledge, there are no
registration or other similar rights in favor of third persons contained in any
agreement filed as an exhibit or incorporated by reference in the Company's most
recent report on Form 10-K to have any of the Company's equity securities,
including securities which are convertible into or exchangeable for the
Company's equity securities, registered pursuant to the Registration Statement
or otherwise registered by the Company under the Act;
(xiii) the Company is not, nor, after giving effect
to the offering and sale of the Shares and the application of the proceeds as
described in the Prospectus, will it be an "investment company" or an entity
"controlled" by an "investment company," as such terms are defined in the
Investment Company Act; and
(xiv) the discussions under the captions "Risk
Factors"-"Delaware law and our charter documents contain provisions that could
discourage or prevent a potential takeover of Acacia Research Corporation that
might otherwise result in our stockholders receiving a premium over the market
price of their shares"; "The holders of AR-COMBIMATRIX stock and the holders of
AR-ACACIA TECHNOLOGIES stock have only limited separate stockholder rights";
"Holders of either class of common stock may be adversely affected by a
redemption of their common stock"; and "There are certain provisions in our
two-class capital structure that could have antitakeover effects" in the
Prospectus, to the extent they constitute descriptions of legal matters or legal
conclusions, in light of the circumstances under which they were made, are
accurate in all material respects.
In addition, such counsel shall state that in connection with such
counsel's participation in the preparation of the Registration Statement and the
Prospectus, such counsel has not independently verified the accuracy,
completeness or fairness of the statements contained or incorporated therein,
and the limitations inherent in the examination made by such counsel and the
knowledge available to such counsel are such that such counsel is unable to
assume, and does not assume, any responsibility for such accuracy, completeness
or fairness. However, on the basis of such counsel's review and participation in
conferences in connection with the preparation of the Registration Statement and
the Prospectus, and relying as to materiality to a large extent upon opinions of
officers and other representatives of the Company, such counsel does not believe
that the Registration Statement as of its effective date contained any untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not misleading, and
such counsel does not believe that the Prospectus on the date hereof, contains
any untrue statement of a material fact or omits to state a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading. However,
such counsel need express no opinion as to the financial statements and other
financial or statistical information contained or incorporated by reference in
the Registration Statement, the Prospectus or any document incorporated by
reference therein.
(b) The Placement Agents shall have received from
PricewaterhouseCoopers LLP letters dated, respectively, the date of this
Agreement and the time of purchase, and addressed to the Placement Agents in the
forms heretofore approved by the Placement Agents.
-16-
(c) The Placement Agents shall have received at the time of
purchase the favorable opinion of Wilson, Sonsini, Xxxxxxxx & Xxxxxx,
Professional Corporation, counsel for the Placement Agents, dated the time of
purchase, in the form heretofore approved by the Placement Agent.
(d) The Placement Agents shall have received at the time of
purchase the favorable opinion of Bozicevic, Field & Xxxxxxx LLP, special
intellectual property counsel to the Placement Agents, dated the time of
purchase, in the form heretofore approved by the Placement Agents.
(e) No Prospectus or amendment or supplement to the
Registration Statement or the Prospectus, including documents deemed to be
incorporated by reference therein, shall have been filed to which you object in
writing.
(f) The Prospectus Supplement shall have been filed with the
Commission pursuant to Rule 424(b) under the Act before 5:30 P.M. New York City
time on the second full business day after the date of this Agreement.
(g) Prior to the time of purchase, (i) no stop order with
respect to the effectiveness of the Registration Statement shall have been
issued under the Act or proceedings initiated under Section 8(d) or 8(e) of the
Act; (ii) the Registration Statement and all amendments thereto shall not
contain an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading; and (iii) the Prospectus and all amendments or supplements thereto
shall not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they are made, not
misleading.
(h) Between the time of execution of this Agreement and the
time of purchase, no material adverse change in the business, properties,
management, financial condition or results of operations of the Company and the
Subsidiaries taken as a whole shall occur or become known.
(i) The Company will, at the time of purchase, deliver to the
Placement Agents a certificate of its Chief Executive Officer and its Chief
Financial Officer in the form attached as Exhibit B hereto.
(j) The Company shall have furnished to the Placement Agents
such other documents and certificates as to the accuracy and completeness of any
statement in the Registration Statement and the Prospectus as of the time of
purchase, as the Placement Agents may reasonably request.
(k) The Shares shall have been qualified for quotation on the
Nasdaq National Market, subject only to notice of issuance at or prior to the
time of purchase.
(l) All requests for additional information on the part of the
Commission shall have been complied with; and the NASD shall have raised no
objection to the fairness and reasonableness of the placement agency terms and
arrangements.
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7. EFFECTIVE DATE OF AGREEMENT; TERMINATION. This Agreement shall
become effective when the parties hereto have executed and delivered this
Agreement.
The obligations of the Company hereunder shall be subject to
termination in the absolute discretion of the Company for any reason upon
delivery of written notice to each Placement Agent, and the obligations of each
Placement Agent hereunder shall be subject to termination in the absolute
discretion of each Placement Agent upon written notice to the Company if (x)
since the time of execution of this Agreement or the earlier respective dates as
of which information is given in the Registration Statement and the Prospectus,
there has been any material adverse change in the business, properties,
management, financial condition or results of operations of the Company and the
Subsidiaries taken as a whole, which would, in any Placement Agent's judgment,
make it impracticable or inadvisable to proceed with the public offering or the
delivery of the Shares on the terms and in the manner contemplated in the
Registration Statement and the Prospectus, or (y) since the time of execution of
this Agreement, there shall have occurred: (i) a suspension or material
limitation in trading in securities generally on the NYSE, the American Stock
Exchange or the Nasdaq; (ii) a suspension or material limitation in trading in
the Company's securities on the Nasdaq; (iii) a general moratorium on commercial
banking activities declared by either federal or New York State authorities or a
material disruption in commercial banking or securities settlement or clearance
services in the United States; (iv) an outbreak or escalation of hostilities or
acts of terrorism involving the United States or a declaration by the United
States of a national emergency or war; or (v) any other calamity or crisis or
any change in financial, political or economic conditions in the United States
or elsewhere, if the effect of any such event specified in clause (iv) or (v) in
any Placement Agent's judgment makes it impracticable or inadvisable to proceed
with the public offering or the delivery of the Shares on the terms and in the
manner contemplated in the Registration Statement and the Prospectus, or (z)
since the time of execution of this Agreement, there shall have occurred any
downgrading, or any notice or announcement shall have been given or made of (i)
any intended or potential downgrading or (ii) any watch, review or possible
change that does not indicate an affirmation or improvement in the rating
accorded any securities of or guaranteed by the Company or any Subsidiary by any
"nationally recognized statistical rating organization," as that term is defined
in Rule 436(g)(2) under the Act.
Any termination made in accordance with this Section 7 shall be without
liability of any party to any other party, except that the provisions of
Sections 4(j), 5, 8, 10 and 11 shall remain in full force and effect
notwithstanding such termination. This Agreement shall remain in full force and
effect unless terminated pursuant to Sections 6 or 7, or all of the Shares shall
have been sold pursuant to this Agreement, at which time this Agreement shall
terminate, or otherwise by mutual agreement of the parties; provided that any
such termination by mutual agreement shall in all cases be deemed to provide
that Sections 4(j), 5, 8, 10 and 11 shall remain in full force and effect.
If the sale of the Shares, as contemplated by this Agreement, is not
carried out by the Placement Agents for any reason permitted under this
Agreement or if such sale is not carried out because the Company shall be unable
to comply with any of the terms of this Agreement, the Company shall not be
under any obligation or liability under this Agreement (except to the extent
provided in Sections 4(m), 5 and 8 hereof), and the Placement Agents shall be
under no obligation or liability to the Company under this Agreement (except to
the extent provided in Section 8 hereof). Under such circumstances, the
Engagement Letter shall remain in full force and effect in accordance with its
terms.
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8. INDEMNITY AND CONTRIBUTION.
(a) The Company agrees to indemnify, defend and hold harmless
each Placement Agent, its partners, directors and officers, and any person who
controls such Placement Agent within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act, and the successors and assigns of all of the
foregoing persons, from and against any loss, damage, expense, liability or
claim (including the reasonable cost of investigation) which such Placement
Agent or any such person may incur under the Act, the Exchange Act, the common
law or otherwise, insofar as such loss, damage, expense, liability or claim (or
actions in respect thereof as contemplated below) arises out of or is based (i)
upon any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement (or in the Registration Statement as
amended by any post-effective amendment thereof by the Company) or in a
Prospectus, or arises out of or is based upon any omission or alleged omission
to state a material fact in connection with such information required to be
stated in such Registration Statement or such Prospects or necessary to make
such information not misleading, or (ii) in whole or in part upon the inaccuracy
in the representations and warranties of the Company contained herein, or (iii)
in whole or in part upon any failure of the Company to perform its obligations
hereunder or under law, or (iv) any act or failure to act or alleged act or
failure to act by such Placement Agent in reliance upon (i), (ii) or (iii), and
in connection with, or relating in any manner to the Shares or the offering
contemplated hereby, and which is included as part of or referred to in any
loss, claim, damage, liability or action arising out of or based upon any matter
covered by clause (i) (ii) or (iii) above; provided that the Company shall not
be liable under this clause (iv) to the extent that a court of competent
jurisdiction shall have determined by a final judgment that such loss, claim,
damage, liability or action resulted directly and solely from any such acts or
failures to act undertaken or omitted to be taken by such Placement Agent
through its bad faith or willful misconduct; provided further, that the
foregoing indemnity agreement shall not apply to any loss, claim, damage,
liability or expense to the extent, but only to the extent, arising out of or
based upon any untrue statement or alleged untrue statement or omission or
alleged omission made in reliance upon and in conformity with written
information furnished to the Company by such Placement Agents expressly for use
in the Registration Statement or in a Prospectus; and provided further, however,
that the indemnity agreement contained in this subsection (a) with respect to
the Prospectus shall not inure to the benefit of a Placement Agent (or to the
benefit of any person controlling such Placement Agent) with respect to any
person asserting any such loss, expense, liability, damage or claim which is the
subject thereof if the Prospectus or any supplement thereto prepared with the
consent of either of the Placement Agents and furnished to the Placement Agents
corrected any such alleged untrue statement or omission and if such Placement
Agent failed to send or give a copy of the Prospectus or supplement thereto to
such person at or prior to the written confirmation of the sale of Shares to
such person. The indemnity in this Section 8(a) shall be in addition to any
liability that the Company may otherwise have.
If any action, suit or proceeding (each, a "Proceeding") is brought
against any Placement Agent or any such person in respect of which indemnity may
be sought against the Company pursuant to the foregoing paragraph, such
Placement Agent or such person shall promptly notify the Company in writing of
the institution of such Proceeding and the Company shall assume the defense of
such Proceeding, including the employment of counsel reasonably satisfactory to
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such indemnified party and payment of all fees and expenses; provided, however,
that the omission to so notify the Company shall not relieve the Company from
any liability which the Company may have to such Placement Agent or any such
person or otherwise, except to the extent that its ability to defend is actually
impaired or otherwise prejudiced by such failure or delay and after notice from
the Company to such indemnified party of its election so to assume the defense
thereof, the Company will not be liable to such indemnified party under this
Section for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof other than reasonable
costs of investigation. Such Placement Agent or such person shall have the right
to employ its or their own counsel in any such case, but the fees and expenses
of such counsel shall be at the expense of such Placement Agent or of such
person unless the employment of such counsel shall have been authorized in
writing by the Company in connection with the defense of such Proceeding or the
Company shall not have, within a reasonable period of time in light of the
circumstances, employed counsel to have charge of the defense of such Proceeding
or such indemnified party or parties shall have reasonably concluded that there
may be defenses available to it or them which are different from, additional to
or in conflict with those available to the Company (in which case the Company
shall not have the right to direct the defense of such Proceeding on behalf of
the indemnified party or parties), in any of which events such fees and expenses
shall be borne by the Company and paid as incurred (it being understood,
however, that the Company shall not be liable for the expenses of more than one
separate counsel (in addition to any local counsel) in any one Proceeding or
series of related Proceedings in the same jurisdiction representing the
indemnified parties who are parties to such Proceeding). The Company shall not
be liable for any settlement of any Proceeding effected without its written
consent but if settled with the written consent of the Company, the Company
agrees to indemnify and hold harmless such Placement Agent and any such person
from and against any loss or liability by reason of such settlement. No
indemnifying party shall, without the prior written consent of the indemnified
party, effect any settlement of any pending or threatened Proceeding in respect
of which any indemnified party is or could have been a party and indemnity could
have been sought hereunder by such indemnified party, unless such settlement
includes an unconditional release of such indemnified party from all liability
on claims that are the subject matter of such Proceeding and does not include an
admission of fault, culpability or a failure to act, by or on behalf of such
indemnified party.
(b) Each Placement Agent agrees, severally, and not jointly,
to indemnify, defend and hold harmless the Company, its directors and officers,
and any person who controls the Company within the meaning of Section 15 of the
Act or Section 20 of the Exchange Act, and the successors and assigns of all of
the foregoing persons, from and against any loss, damage, expense, liability or
claim (including the reasonable cost of investigation) which, jointly or
severally, the Company or any such person may incur under the Act, the Exchange
Act, the common law or otherwise, insofar as such loss, damage, expense,
liability or claim arises out of or is based upon any untrue statement or
alleged untrue statement of a material fact contained in and in conformity with
information concerning such Placement Agent furnished in writing by or on behalf
of such Placement Agent to the Company expressly for use in the Registration
Statement (or in the Registration Statement as amended by any post-effective
amendment thereof by the Company) or in a Prospectus, or arises out of or is
based upon any omission or alleged omission to state a material fact in
connection with such information required to be stated in such Registration
Statement or such Prospectus or necessary to make such information not
misleading.
-20-
If any Proceeding is brought against the Company or any such person in
respect of which indemnity may be sought against a Placement Agent pursuant to
the foregoing paragraph, the Company or such person shall promptly notify such
Placement Agent in writing of the institution of such Proceeding and such
Placement Agent shall assume the defense of such Proceeding, including the
employment of counsel reasonably satisfactory to such indemnified party and
payment of all fees and expenses; provided, however, that the omission to so
notify such Placement Agent shall not relieve such Placement Agent from any
liability which such Placement Agent may have to the Company or any such person
or otherwise, except to the extent that its ability to defend is actually
impaired or otherwise prejudiced by such failure or delay and after notice from
such Placement Agent to such indemnified party of its election so to assume the
defense thereof, such Placement Agent will not be liable to such indemnified
party under this Section for any legal or other expenses subsequently incurred
by such indemnified party in connection with the defense thereof other than
reasonable costs of investigation. The Company or such person shall have the
right to employ its own counsel in any such case, but the fees and expenses of
such counsel shall be at the expense of the Company or such person unless the
employment of such counsel shall have been authorized in writing by such
Placement Agent in connection with the defense of such Proceeding or such
Placement Agent shall not have, within a reasonable period of time in light of
the circumstances, employed counsel to defend such Proceeding or such
indemnified party or parties shall have reasonably concluded that there may be
defenses available to it or them which are different from or additional to or in
conflict with those available to such Placement Agent (in which case such
Placement Agent shall not have the right to direct the defense of such
Proceeding on behalf of the indemnified party or parties, but such Placement
Agent may employ counsel and participate in the defense thereof but the fees and
expenses of such counsel shall be at the expense of such Placement Agent), in
any of which events such fees and expenses shall be borne by such Placement
Agent and paid as incurred (it being understood, however, that such Placement
Agent shall not be liable for the expenses of more than one separate counsel (in
addition to any local counsel) in any one Proceeding or series of related
Proceedings in the same jurisdiction representing the indemnified parties who
are parties to such Proceeding). A Placement Agent shall not be liable for any
settlement of any such Proceeding effected without the written consent of such
Placement Agent but if settled with the written consent of such Placement Agent,
such Placement Agent agrees to indemnify and hold harmless the Company and any
such person from and against any loss or liability by reason of such settlement.
No indemnifying party shall, without the prior written consent of the
indemnified party, effect any settlement of any pending or threatened Proceeding
in respect of which any indemnified party is or could have been a party and
indemnity could have been sought hereunder by such indemnified party, unless
such settlement includes an unconditional release of such indemnified party from
all liability on claims that are the subject matter of such Proceeding.
(c) If the indemnification provided for in this Section 8 is
unavailable to an indemnified party under subsection (a) of this Section 8 or
insufficient to hold harmless any such indemnified party in respect of any
losses, damages, expenses, liabilities or claims referred to therein, then the
Company shall contribute to the amount paid or payable by such indemnified party
as a result of such losses, damages, expenses, liabilities or claims as set
forth in the indemnification provisions of this Section 8. If the
indemnification provided for in this Section 8 is unavailable to an indemnified
party under subsection (b) of this Section 8 or insufficient to hold harmless
any such indemnified party in respect of any losses, damages, expenses,
-21-
liabilities or claims referred to therein, then the Placement Agents shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, damages, expenses, liabilities or claims (i) in such proportion
as is appropriate to reflect the relative benefits received by the Company on
the one hand and the Placement Agents on the other hand from the offering of the
Shares or (ii) if the allocation provided by clause (i) above is not permitted
by applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
the Company on the one hand and of the Placement Agents on the other in
connection with the statements or omissions which resulted in such losses,
damages, expenses, liabilities or claims, as well as any other relevant
equitable considerations. The relative benefits received by the Company on the
one hand and the Placement Agents on the other shall be deemed to be in the same
respective proportions as the total proceeds from the offering (net of placement
fees but before deducting expenses) received by the Company and the total
placement fees received by the Placement Agents, bear to the aggregate public
offering price of the Shares. The relative fault of the Company on the one hand
and of the Placement Agents on the other shall be determined by reference to,
among other things, whether the untrue statement or alleged untrue statement of
a material fact or omission or alleged omission relates to information supplied
by the Company or by the Placement Agents and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The amount paid or payable by a party as a result of the
losses, damages, expenses, liabilities and claims referred to in this subsection
shall be deemed to include any legal or other fees or expenses reasonably
incurred by such party in connection with investigating, preparing to defend or
defending any Proceeding.
(d) The Company and the Placement Agents agree that it would
not be just and equitable if contribution pursuant to this Section 8 were
determined by pro rata allocation or by any other method of allocation that does
not take account of the equitable considerations referred to in subsection (c)
above. Notwithstanding the provisions of this Section 8, a Placement Agent shall
not be required to contribute any amount in excess of the amount by which the
total price at which the Shares placed by such Placement Agent were offered
exceeds the amount of any damage which such Placement Agent has otherwise been
required to pay by reason of such untrue statement or alleged untrue statement
or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation.
(e) The indemnity and contribution agreements contained in
this Section 8 and the covenants, warranties and representations of the Company
contained in this Agreement shall remain in full force and effect regardless of
any investigation made by or on behalf of any Placement Agent, its partners,
directors or officers or any person (including each partner, officer or director
of such person) who controls such Placement Agent within the meaning of Section
15 of the Act or Section 20 of the Exchange Act, or by or on behalf of the
Company, its directors or officers or any person who controls the Company within
the meaning of Section 15 of the Act or Section 20 of the Exchange Act, and
shall survive any termination of this Agreement or the issuance and delivery of
the Shares. The Company and the Placement Agents agree promptly to notify each
other of the commencement of any Proceeding against it and, in the case of the
Company, against any of the Company's officers or directors in connection with
the issuance and sale of the Shares, or in connection with the Registration
Statement or the Prospectus.
-22-
9. NOTICES. Except as otherwise herein provided, all statements,
requests, notices and agreements shall be in writing or by telegram and, if to
the Placement Agents, shall be sufficient in all respects if delivered or sent
to Xxxxxx Xxxxxx Partners, Attention: Xxxxx Xxxx and to Xxxxx Xxxxxx & Co.,
Inc., Attention: Xxxxxxx X. XxXxxxxxx, and, if to the Company, shall be
sufficient in all respects if delivered or sent to the Company at the offices of
the Company at 000 Xxxxxxx Xxxxxx Xxxxx, 0xx Xxxxx, Xxxxxxx Xxxxx, Xxxxxxxxxx
00000, Attention: Chief Financial Officer, with a copy to Xxxxx Xxxxxxx Xxxx
Xxxxxx & Xxxxxxx LLP, 1901 Avenue of the Stars, Xxxxx 0000, Xxx Xxxxxxx,
Xxxxxxxxxx 00000, Attention: Xxxx X. Xxxxxx.
10. GOVERNING LAW; CONSTRUCTION. This Agreement and any claim,
counterclaim or dispute of any kind or nature whatsoever arising out of or in
any way relating to this Agreement ("Claim"), directly or indirectly, shall be
governed by, and construed in accordance with, the laws of the State of New
York. The section headings in this Agreement have been inserted as a matter of
convenience of reference and are not a part of this Agreement.
11. SUBMISSION TO JURISDICTION. Except as set forth below, no Claim may
be commenced, prosecuted or continued in any court other than the courts of the
State of California located in the City and County of San Francisco or in the
United States District Court for the Northern District of California, which
courts shall have jurisdiction over the adjudication of such matters, and the
Company and Placement Agents consent to the jurisdiction of such courts and
personal service with respect thereto. Notwithstanding the foregoing, nothing
contained herein shall limit the parties' indemnification obligations with
respect to third party claims provided under Section 8 hereof. Each of the
Placement Agents and the Company (on its behalf and, to the extent permitted by
applicable law, on behalf of its shareholders and affiliates) waives all right
to trial by jury in any action, proceeding or counterclaim (whether based upon
contract, tort or otherwise) in any way arising out of or relating to this
Agreement. The Company agrees that a final judgment in any such action,
proceeding or counterclaim brought in any such court shall be conclusive and
binding upon the Company and may be enforced in any other courts to the
jurisdiction of which the Company is or may be subject, by suit upon such
judgment.
12. PARTIES AT INTEREST. The Agreement herein set forth has been and is
made solely for the benefit of the Placement Agents and the Company and to the
extent provided in Section 8 hereof the controlling persons, partners, directors
and officers referred to in such section, and their respective successors,
assigns, heirs, personal representatives and executors and administrators. No
other person, partnership, association or corporation (including a purchaser, as
such purchaser, from the Placement Agents) shall acquire or have any right under
or by virtue of this Agreement.
13. COUNTERPARTS. This Agreement may be signed by the parties in one or
more counterparts which together shall constitute one and the same agreement
among the parties.
14. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon the
Placement Agents and the Company and their successors and assigns and any
successor or assign of any substantial portion of the Company's and the
Placement Agents' respective businesses and/or assets.
-23-
15. ENTIRE AGREEMENT; ENGAGEMENT LETTER. This Agreement, and the
documents referred to herein, including the Engagement Letter, constitute the
entire agreement between the parties hereto pertaining to the subject matter
hereof, and any and all other written or oral agreements existing between the
parties hereto concerning such subject matter are expressly canceled. Except to
the extent specifically stated herein, the Engagement Letter shall remain in
full force and effect in accordance with its terms.
[Signatures continued on next page]
-24-
If the foregoing correctly sets forth the understanding between the
Company and the Placement Agents, please so indicate in the space provided below
for that purpose, whereupon this agreement and your acceptance shall constitute
a binding agreement between the Company and the Placement Agents.
Very truly yours,
ACACIA RESEARCH CORPORATION
By:
------------------------------
Name: Xxxx X. Xxxx
Title: Chairman and CEO
Accepted and agreed to as of the
date first above written
XXXXXX XXXXXX PARTNERS LLC
By:
---------------------------------
Xxxxx Xxxxxxxxx
Partner, Co-Director of Investment Banking
XXXXX XXXXXX & CO., INC.
By:
---------------------------------
Xxxxxxx X. XxXxxxxxx
President, Head of Investment Banking
-25-
SCHEDULE A
----------
Subsidiaries
------------
Name Percent Owned Jurisdiction of Incorporation
---- ------------- -----------------------------
CombiMatrix Corporation 100% Delaware
Soundview Technologies Incorporated 100% Delaware
Acacia Media Technologies Corporation 100% Delaware
Advanced Material Sciences, Inc. 99% Delaware
CombiMatrix K.K. 100% held by Japanese
CombiMatrix Corporation
EXHIBIT A
---------
FORM OF PURCHASE AGREEMENT
Acacia Research Corporation
000 Xxxxxxx Xxxxxx Xxxxx
0xx Xxxxx
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
Ladies and Gentlemen:
The undersigned, ______________ (the "Investor"), hereby confirms its
agreement with you as follows and in the Rider to Purchase Agreement attached
hereto:
1. This Purchase Agreement (the "Agreement") is made as of ________,
2004 between Acacia Research Corporation, a Delaware corporation (the
"Company"), and the Investor.
2. The Company and the Investor agree that the Investor will purchase
from the Company and the Company will issue and sell to the Investor ______
shares of Common Stock, $0.001 par value per share, designated as Acacia
Research-CombiMatrix Common Stock (the "Shares") of the Company, for a purchase
price of $5.00 per share, or an aggregate purchase price of $_____________. The
Investor acknowledges that the offering of the Shares is not a firm commitment
underwriting.
3. The completion of the purchase and sale of the Shares (the
"Closing") shall occur on ____________, 2004 (the "time of purchase"). At the
Closing, the Company shall deliver to the Investor, using customary book-entry
procedures, the number of Shares as set forth above in Section 2, and the
Investor shall deliver, or cause to be delivered, to the Company Federal Funds
wire transfer in the full amount of the purchase price for the Shares being
purchased.
4. This Agreement shall be governed by, and construed in accordance
with, the internal laws of the State of New York, without giving effect to the
principles of conflicts of law.
5. This Agreement may be executed in two or more counterparts, each of
which shall constitute an original, but all of which, when taken together, shall
constitute but one instrument, and shall become effective when one or more
counterparts have been signed by each party hereto and delivered to the other
parties.
Exhibit A-1
Please confirm that the foregoing correctly sets forth the agreement
between us by signing in the space provided below for that purpose.
Name of Investor: _________________________
By:________________________________________
Print Name: _______________________________
Title: ____________________________________
Address: __________________________________
Tax ID No.:________________________________
Contact Name: _____________________________
Telephone:_________________________________
Name in which book-entry should be made (if
different):
-------------------------------------------
AGREED AND ACCEPTED:
Acacia Research Corporation,
a Delaware corporation
By:_____________________________
Name: ____________________
Title: ___________________
--------------------------------------------------------------------------------
RIDER TO PURCHASE AGREEMENT
The Company represents and warrants to Investor that, at the date of
this Agreement and at the time of purchase on which Investor purchases Shares:
1. The Company has the full power and authority to execute and
deliver this Agreement and to perform its obligations
hereunder. This Agreement constitutes the valid and legally
binding obligation of the Company, enforceable in accordance
with its terms.
2. The Company is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware,
with all requisite corporate power and authority to carry on
the business in which it is engaged and to own the properties
it owns, and the Company has all requisite power and authority
to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. The Company is duly
qualified and licensed to do business and is in good standing
in all jurisdictions where the nature of its business makes
such qualification necessary, except where the failure to be
qualified or licensed would not have a Material Adverse
Effect.
Exhibit A-2
3. The Company's Registration Statement on Form S-3
(No.333-112885) was declared effective by the Commission on
March 15, 2004. The Registration Statement is effective on the
date hereof and the Company has not received notice that the
Commission has issued or intends to issue a stop order with
respect to the Registration Statement or that the Commission
otherwise has suspended or withdrawn the effectiveness of the
Registration Statement, either temporarily or permanently, or
intends, to the Company's knowledge, or has threatened in
writing to do so. The Registration Statement (including the
information or documents incorporated by reference therein),
as of the time it was declared effective, and any amendments
or supplements thereto, each as of the time of filing, did not
contain any untrue statement of material fact or omit to state
any material fact required to be stated therein or necessary
to make the statements therein not misleading. The issuance of
the Shares to the Investor is registered by the Registration
Statement. Any reference herein to the Registration Statement,
the Prospectus, or any amendment or supplement thereto shall
be deemed to refer to and include the documents incorporated
(or deemed to be incorporated) by reference therein, and any
reference herein to the terms "amend," "amendment" or
"supplement" with respect to the Registration Statement or
Prospectus shall be deemed to refer to and include the filing
after the execution hereof of any document with the Commission
deemed to be incorporated by reference therein.
4. Each part of the Registration Statement, and the Prospectus,
conforms in all material respects with the requirements of the
Securities Act of 1933 and the rules and regulations
thereunder; each part of the Registration Statement, does or
will not contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; and
the Prospectus, on the date of filing thereof with the
Commission does or will not include an 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; except that the
foregoing shall not apply to statements or omissions in any
such document made in reliance on information furnished to the
Company by the Placement Agent specifically stating that it is
intended for use in the Registration Statement, the
Prospectus, or any amendment or supplement thereto.
5. The Shares are currently listed on the Nasdaq National Market
under the symbol "CBMX" and no notice has been given by Nasdaq
that the Company is in non-compliance with any provision of
the rules and regulations of the Nasdaq National Market.
6. The Company is not in violation of any provisions of its
Certificate of Incorporation, Bylaws or any other governing
document as amended and in effect on and as of the date hereof
or in default (and no event has occurred which, with notice or
lapse of time or both, would constitute a default) under any
agreement filed as an exhibit or incorporated by reference in
the Company's most recent report on Form 10-K, which would
have a material adverse effect.
Exhibit A-3
7. The Company has not taken any action outside the ordinary
course of business designed to or that might reasonably be
expected to cause or result in stabilization or manipulation
of the price of the Shares to facilitate the sale or resale of
the Shares in any manner in contravention of applicable
securities laws.
8. The Company shall issue a press release and file a Current
Report on Form 8-K with the SEC regarding the closing of the
Offering before 9:00 a.m., Pacific Daylight Time, on the first
business day after execution of the Agreement.
Capitalized terms not defined hereunder or in the Agreement shall have the
meanings ascribed to such terms in that certain Placement Agency Agreement
between the Company, Xxxxxx Xxxxxx Partners LLC and Xxxxx Xxxxxx & Co. Inc.,
dated April 13, 2004.
Exhibit A-4
EXHIBIT B
---------
Officers' Certificate
---------------------
1. I have reviewed the Registration Statement and the Prospectus.
2. The representations and warranties of the Company as set forth in
the Placement Agency Agreement are true and correct as of the time of purchase.
3. The Company has performed all of its obligations under the Placement
Agency Agreement as are to be performed at or before the time of purchase.
4. The conditions set forth in paragraphs (g) and (h) of Section 6 of
the Placement Agency Agreement have been met.
