5,800,000 Shares PHOENIX TECHNOLOGIES LTD. Common Stock, par value $0.001 per share PLACEMENT AGENCY AGREEMENT
Exhibit 1.1
5,800,000 Shares
Common Stock, par value $0.001 per share
PLACEMENT AGENCY AGREEMENT
June 26, 2009
Xxxxxxx & Company, LLC
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Ladies and Gentlemen:
Phoenix Technologies Ltd., a Delaware corporation (the “Company”), proposes to issue and sell
to the purchasers, pursuant to the terms of this Placement Agency Agreement (this “Agreement”) and
the Subscription Agreements in the form of Exhibit A attached hereto (the “Subscription
Agreements”) entered into with the purchasers identified therein (each a “Purchaser” and
collectively, the “Purchasers”), up to an aggregate of 5,800,000 shares of common stock, $0.001 par
value per share (the “Common Stock”) of the Company. The aggregate of 5,800,000 shares so proposed
to be sold is hereinafter referred to as the “Shares.” The Company hereby confirms its agreement
with Xxxxxxx & Company, LLC to act as Placement Agent (“Xxxxxxx”, or the “Placement Agent”) in
accordance with the terms and conditions hereof.
1. Agreement to Act as Placement Agent.
On the basis of the representations, warranties and agreements of the Company herein
contained, and subject to all the terms and conditions of this Agreement:
(a) The Company hereby authorizes the Placement Agent to act as its sole agent to solicit
offers for the purchase of all or part of the Shares from the Company in connection with the
proposed offering of the Shares (the “Offering”). Until the Closing Date (as defined in
Section 3 hereof), the Company shall not, without the prior written consent of the
Placement Agent, solicit or accept offers to purchase Shares otherwise than through the
Placement Agent.
(b) The Company hereby acknowledges that the Placement Agent has agreed, as agent of the
Company, to use its commercially reasonable best efforts to solicit offers to purchase the
Shares from the Company on the terms and subject to the conditions set forth in the Prospectus
(as defined below). The Placement Agent shall use commercially reasonable best efforts to assist
the Company in obtaining performance by each Purchaser whose offer to purchase Shares has been
solicited by the Placement Agent and accepted by the Company, but the Placement Agent shall not,
except as otherwise provided in this Agreement, be obligated to disclose the identity of any
potential purchaser or have any liability to the Company in the event any such purchase is not
consummated for any reason. Under no circumstances will the Placement Agent be obligated to
underwrite or purchase any Shares for its own account and, in soliciting purchases of Shares,
the Placement Agent shall act solely as the Company’s agent and not as principal.
Notwithstanding the foregoing and
except as otherwise provided in Section 2(c), it is understood and agreed that the
Placement Agent (or its affiliates) may, solely at its discretion and without any obligation to
do so, purchase Shares as principal.
(c) Subject to the provisions of this Section 1, offers for the purchase of Shares
may be solicited by the Placement Agent as agent for the Company at such times and in such
amounts as the Placement Agent deems advisable. The Placement Agent shall communicate to the
Company, orally or in writing, each reasonable offer to purchase Shares received by it as agent
of the Company. The Company shall have the sole right to accept offers to purchase the Shares
and may reject any such offer, in whole or in part. The Placement Agent shall have the right, in
its discretion reasonably exercised, without notice to the Company, to reject any offer to
purchase Shares received by it, in whole or in part, and any such rejection shall not be deemed
a breach of its agreement contained herein.
(d) The Shares are being sold to the Purchasers at a price of $2.25 per share. The
purchases of the Shares by the Purchasers shall be evidenced by the execution of Subscription
Agreements by each of the Purchasers and the Company.
(e) As compensation for services rendered, on the Closing Date (as defined in Section
3 hereof), the Company shall pay to the Placement Agent by wire transfer of immediately
available funds to an account or accounts designated by the Placement Agent, an aggregate amount
equal to five (5.0%) of the gross proceeds received by the Company from the sale of the Shares
on such Closing Date (the “Placement Fee”).
(f) No Shares which the Company has agreed to sell pursuant to this Agreement and the
Subscription Agreements shall be deemed to have been purchased and paid for, or sold by the
Company, until such Shares shall have been delivered to the Purchaser thereof against payment by
such Purchaser. If the Company shall default in its obligations to deliver Shares to a Purchaser
whose offer it has accepted, the Company shall indemnify and hold the Placement Agent harmless
against any loss, claim, damage or expense arising from or as a result of such default by the
Company in accordance with the procedures set forth in Section 7(c) herein.
2. Representations and Warranties of the Company. The Company represents and warrants to,
and agrees with, the Placement Agent and the Purchasers that:
(a) The Company meets the requirements for the use of Form S-3. A registration statement
(Registration No. 333-159879) on Form S-3 relating to the Shares, as amended by the
Post-Effective Amendment No. 1 (the “Post-Effective Amendment”) including a base prospectus
relating to the Shares as set forth in the Post-Effective Amendment (the “Base Prospectus”),
has been prepared by the Company under the provisions of the Securities Act of 1933, as
amended (the “Securities Act”), and the rules and regulations (collectively referred to as
the “Rules and Regulations”) of the Securities and Exchange Commission (the “Commission”)
thereunder, and has been filed with and has been declared effective by the Commission, and
the offering of the Shares complies with Rule 415 under the Securities Act. A final
prospectus supplement to the Base Prospectus relating to the Shares and the offering thereof
will be filed promptly by the Company with the Commission in accordance with Rule 424(b) of
the Rules and Regulations (such final prospectus supplement, as so filed, the “Prospectus
Supplement”). Such
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registration statement at any given time, including the Post-Effective Amendment and
amendments thereto to such time, the exhibits and any schedules thereto at such time, the
documents otherwise deemed to be a part thereof or included therein by the Rules and
Regulations (including Rule 430B thereof), and any registration statement relating to the
offering contemplated by this Agreement and filed pursuant to Rule 462(b) of the Rules and
Regulations (“Rule 462(b)”), is herein called the “Registration Statement.” The term
“preliminary prospectus” means any preliminary prospectus (including any preliminary
prospectus supplement) relating to the Shares and the offering thereof as first filed with
the Commission pursuant to Rule 424(b) of the Rules and Regulations (“Rule 424(b)”). The
term “Prospectus” means the Base Prospectus as amended and supplemented by the Prospectus
Supplement, except that if such Base Prospectus is amended or supplemented on or prior to
the date on which the Prospectus Supplement was first filed pursuant to Rule 424(b), the
term “Prospectus” shall mean the Base Prospectus as so amended or supplemented and as
amended and supplemented by the Prospectus Supplement. Any reference herein to the
Registration Statement, the Base Prospectus, a preliminary prospectus, the Prospectus
Supplement, or the Prospectus shall be deemed to refer to and include the documents
incorporated by reference therein, and any reference herein to the terms “amend,”
“amendment” or “supplement” with respect to the Registration Statement, the Base Prospectus,
a preliminary prospectus, 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 (the “Exchange Act”), after the time the Post-Effective Amendment initially
became effective (the “Effective Date”), the date of the Base Prospectus, any preliminary
prospectus, the Prospectus Supplement, or the Prospectus, as the case may be, and deemed to
be incorporated therein by reference. The term “Issuer Free Writing Prospectus” means any
“issuer free writing prospectus,” as defined in Rule 433 of the Rules and Regulations (“Rule
433”), relating to the Shares that (i) is required to be filed with the Commission by the
Company or (ii) is exempt from filing pursuant to Rule 433(d)(5)(i) because it contains a
description of the Shares or of the offering that does not reflect the final terms, in each
case in the form filed or required to be filed with the Commission or, if not required to be
filed , in the form retained in the Company’s records pursuant to Rule 433(g).
No order preventing or suspending the use of the Base Prospectus, any preliminary
prospectus, the Prospectus Supplement, the Prospectus or any Issuer Free Writing Prospectus
has been issued by the Commission, and no stop order suspending the effectiveness of the
Registration Statement (including any related registration statement filed pursuant to Rule
462(b)) or any post-effective amendment thereto has been issued, and no proceeding for that
purpose has been initiated or threatened by the Commission. On the Effective Date, on the
date the Base Prospectus, any preliminary prospectus, the Prospectus Supplement, or the
Prospectus is first filed with the Commission pursuant to Rule 424(b) (if required), at all
times during the period through and including the Closing Date and when any post-effective
amendment to the Registration Statement becomes effective or any amendment or supplement to
the Prospectus is filed with the Commission, the Registration Statement and the Prospectus
(as amended or as supplemented if the Company shall have filed with the Commission any
amendment or supplement thereto), including the financial statements included or
incorporated by reference in the Prospectus, did and will comply with all applicable
provisions of the
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Securities Act, the Exchange Act, the rules and regulations of the Commission under the
Exchange Act (the “Exchange Act Rules and Regulations”), and the Rules and Regulations and
will contain all statements required to be stated therein in accordance with the Securities
Act, the Exchange Act, the Exchange Act Rules and Regulations, and the Rules and
Regulations. As of the effective date of the Post-Effective Amendment, as to each part of
the Registration Statement, no part of the Registration Statement, the Prospectus or any
such amendment or supplement thereto did or will contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary in order to
make the statements therein not misleading. At the Effective Date, the date the Base
Prospectus or any amendment or supplement to the Base Prospectus, including any preliminary
prospectus or the Prospectus Supplement, is filed with the Commission, the date of first use
of any preliminary prospectus or the Prospectus Supplement, and at the Closing Date, the
Prospectus did not and will not contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
As of the Applicable Time, neither (x) any General Use Free Writing Prospectus(es) (as
defined below) issued at or prior to the Applicable Time (as defined below), the Pricing
Prospectus (as defined below) and the documents listed on Schedule A hereto, each as
applicable, all considered together (collectively, the “General Disclosure Package”), nor
(y) any individual Limited Use Free Writing Prospectus, when considered together with the
General Disclosure Package, included any untrue statement of a material fact or omitted to
state any material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading.
As used in this subsection and elsewhere in this Agreement:
“Applicable Time” means 7:00 pm (Eastern time) on the date of this Agreement or such
other time as agreed by the Company and the Placement Agent.
“General Use Free Writing Prospectus” means any Issuer Free Writing Prospectus that is
intended for general distribution to prospective investors, as evidenced by its being
specified in Schedule A hereto.
“Issuer Free Writing Prospectus” means any Issuer Free Writing Prospectus that is not
an General Use Free Writing Prospectus.
“Limited Use Free Writing Prospectus” means any Issuer Free Writing Prospectus that is
not a General Use Free Writing Prospectus.
“Pricing Prospectus” means the Base Prospectus, as amended or supplemented immediately
prior to the Applicable Time, including any document incorporated by reference therein and
any prospectus supplement deemed to be a part thereof. For purposes of this definition,
information contained in a form of prospectus that is deemed retroactively to be a part of
the Registration Statement pursuant to Rule 430B shall be considered to be included in the
Pricing Prospectus only if the actual time that form of prospectus is filed with the
Commission pursuant to Rule 424(b) is prior to the Applicable Time.
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Each Issuer Free Writing Prospectus, as of its issue date and at all subsequent times
through the completion of the public offer and sale of the Shares or until any earlier date
that the issuer notified or notifies the Placement Agent as described in the next sentence,
did not, does not and will not include any information that conflicted, conflicts or will
conflict with the information contained in the Registration Statement or the Prospectus,
including any document incorporated by reference therein that has not been superseded or
modified. If there occurs an event or development as a result of which the General
Disclosure Package would include an untrue statement of a material fact or would omit to
state a material fact necessary in order to make the statements therein, in the light of the
circumstances then prevailing, not misleading, the Company will promptly notify the
Placement Agent so that any use of the General Disclosure Package may cease until it is
amended or supplemented to correct untrue statement or omission.
The foregoing representations and warranties in this Section 2(a) do not apply
to any statements or omissions made in reliance on and in conformity with information
relating to the Placement Agent furnished in writing to the Company by the Placement Agent
specifically for inclusion in the Registration Statement, the Prospectus Supplement, the
Pricing Prospectus, the Prospectus or any Issuer Free Writing Prospectus or any amendment or
supplement thereto. The Company acknowledges that (i) the statements set forth in the last
paragraph on the front cover page concerning the terms of the offering by the Placement
Agent and (ii) the statements concerning the Placement Agent contained in the first
paragraph under the heading “Plan of Distribution” (the “Placement Agent’s Information”) in
the Prospectus Supplement and the Pricing Prospectus and the Prospectus constitute the only
information relating to the Placement Agent furnished in writing to the Company by the
Placement Agent specifically for inclusion in the Registration Statement, the Prospectus
Supplement, the Pricing Prospectus, the Prospectus and any Issuer Free Writing Prospectus or
any amendment or supplement thereto.
(b) The documents that are incorporated by reference in the Base Prospectus, any preliminary
prospectus, the Pricing Prospectus, and the Prospectus or from which information is so
incorporated by reference, when they became or become effective or were or are filed with
the Commission, as the case may be, complied or will comply in all material respects with
the requirements of the Securities Act or the Exchange Act, as applicable, and the Rules and
Regulations or the Exchange Act Rules and Regulations, as applicable; and any documents so
filed and incorporated by reference subsequent to the Effective Date shall, when they are
filed with the Commission, comply in all material respects with the requirements of the
Securities Act or the Exchange Act, as applicable, and the Rules and Regulations or the
Exchange Act Rules and Regulations, as applicable.
(c) Each Issuer Free Writing Prospectus, if any, as of its issue date and at all subsequent
times through the completion of the public offer and sale of the Shares or until any earlier
date that the Company notified or notifies the Placement Agent as described in Section
4(e), did not, does not and will not include any information that conflicted, conflicts
or will conflict with the information contained in the Registration Statement, Pricing
Prospectus or the Prospectus, including any document incorporated by
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reference therein and any prospectus supplement deemed to be a part thereof that has not
been superseded or modified, or includes an untrue statement of a material fact or omitted
or would omit to state a material fact required to be stated therein or necessary in order
to make the statements therein, in the light of the circumstances prevailing at the
subsequent time, not misleading. The foregoing sentence does not apply to statements in or
omissions from any Issuer Free Writing Prospectus in reliance upon, and in conformity with,
written information furnished to the Company by the Placement Agent specifically for
inclusion therein, which information the parties hereto agree is limited to the Placement
Agent’s Information.
(d) The documents incorporated by reference in the Prospectus, when they became effective or
were filed with the Commission, as the case may be, conformed in all material respects to
the requirements of the Securities Act or the Exchange Act, as applicable, and the rules and
regulations of the Commission thereunder and none of such documents contained any untrue
statement of a material fact or omitted to state any 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 any further documents so filed and incorporated by
reference in the Prospectus, when such documents become effective or are filed with the
Commission , as the case may be, will conform in all material respects to the requirements
of the Securities Act or the Exchange Act, as applicable, and the rules and regulations of
the Commission thereunder and will not contain any untrue statement of a material fact or
omit to state any 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.
(e) The Company is not an “ineligible issuer” in connection with the offering pursuant to
Rules 164, 405 and 433 under the Securities Act. The Company has not, directly or
indirectly, distributed and will not distribute any offering material in connection with the
Offering other than any Preliminary Prospectus, the Prospectus and other materials, if any,
permitted under the Securities Act and consistent with Section 4(b) below. The
Company will file with the Commission all Issuer Free Writing Prospectuses (other than a
“road show,” as defined in Rule 433(d)(8) of the Rules and Regulations), if any, in the time
and manner required under Rules 163(b)(2) and 433(d) of the Rules and Regulations.
(f) The Company and each of its Subsidiaries (as defined in Section 14) have been
duly organized and are validly existing as corporations or other legal entities in good
standing (or the foreign equivalent thereof) under the laws of their respective
jurisdictions of organization. The Company and each of its Significant Subsidiaries (as
defined in Section 2(ff) below) are duly qualified to do business and are in good standing
as foreign corporations or other legal entities in each jurisdiction in which their
respective ownership or lease of property or the conduct of their respective businesses
require such qualification and have all power and authority (corporate or other) necessary
to own or hold their respective properties and to conduct the businesses in which they are
engaged, except where the failure to so qualify or have such power or authority (i) would
not have, singularly or in the aggregate, a material adverse effect on the condition
(financial or otherwise), results of operations, assets, business or prospects of the
Company and its Subsidiaries taken as a whole, or (ii) impair in any material respect the
ability of the
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Company to perform its obligations under this Agreement or the Subscription Agreements or to
consummate any transactions contemplated by this Agreement, the Subscription Agreements, the
General Disclosure Package or the Prospectus (any such effect as described in clauses (i) or
(ii), a “Material Adverse Effect”). The Company owns or controls, directly or indirectly,
only the corporations, partnerships, limited liability partnerships, limited liability
companies, associations or other entities set forth in Schedule C, annexed hereto.
(g) The Company has the full right, power and authority to enter into this Agreement, each
of the Subscription Agreements and that certain Escrow Agreement (the “Escrow Agreement”)
dated as of the date hereof by and among the Company, the Placement Agent and the escrow
agent named therein, and to perform and to discharge its obligations hereunder and
thereunder; and each of this Agreement, each of the Subscription Agreements and the Escrow
Agreement has been duly authorized, executed and delivered by the Company, and constitutes a
valid and binding obligation of the Company enforceable in accordance with its terms.
(h) The Shares to be issued and sold by the Company to the Purchasers hereunder and under
the Subscription Agreements has been duly and validly authorized and, when issued and
delivered against payment therefor as provided herein and the Subscription Agreements, will
be duly and validly issued, fully paid and nonassessable and free of any preemptive or
similar rights and will conform to the description thereof contained in the General
Disclosure Package and the Prospectus.
(i) The Company has an authorized capitalization as set forth in the Pricing Prospectus, and
all of the issued shares of capital stock of the Company have been duly and validly
authorized and issued, are fully paid and non-assessable, have been issued in compliance in
all material respects with United States federal and state securities laws, and conform to
the description thereof contained in the General Disclosure Package and the Prospectus. As
of June 22, 2009, there were 29,198,155 shares of Common Stock issued and outstanding and no
shares of Preferred Stock, par value $0.001 of the Company issued and outstanding and as of
June 2, 2009, 7,555,799 shares of Common Stock were issuable upon the exercise of all
options, warrants and convertible securities outstanding as of such date. Since such date,
the Company has not issued any securities, other than Common Stock of the Company issued
pursuant to the exercise of stock options previously outstanding under the Company’s stock
option plans or the issuance of restricted Common Stock pursuant to employee stock purchase
plans. All of the Company’s options, warrants and other rights to purchase or exchange any
securities for shares of the Company’s capital stock have been duly authorized and validly
issued and were issued in compliance in all material respects with US federal and state
securities laws. None of the outstanding shares of Common Stock was issued in violation of
any preemptive rights, rights of first refusal or other similar rights to subscribe for or
purchase securities of the Company. There are no authorized or outstanding shares of
capital stock, options, warrants, preemptive rights, rights of first refusal or other rights
to purchase, or equity or debt securities convertible into or exchangeable or exercisable
for, any capital stock of the Company or any of its Subsidiaries other than those described
above or accurately described in the General Disclosure Package. The description of the
Company’s stock option, stock bonus and other stock plans or arrangements, and the
7
options or other rights granted thereunder, as described in the General Disclosure Package
and the Prospectus, accurately and fairly present the information required to be shown with
respect to such plans, arrangements, options and rights.
(j) All the outstanding shares of capital stock of each subsidiary of the Company have been
duly authorized and validly issued, are fully paid and nonassessable and, except to the
extent set forth in the General Disclosure Package or the Prospectus, are owned by the
Company directly or indirectly through one or more wholly-owned Subsidiaries, free and clear
of any claim, lien, encumbrance, security interest, restriction upon voting or transfer or
any other claim of any third party.
(k) The execution, delivery and performance of this Agreement, the Subscription Agreements
and the Escrow Agreement by the Company, the issue and sale of the Shares by the Company and
the consummation of the transactions contemplated hereby and thereby will not (with or
without notice or lapse of time or both) conflict with or result in a breach or violation of
any of the terms or provisions of, constitute a default or Debt Repayment Triggering Event
(as defined below) under, give rise to any right of termination or other right or the
cancellation or acceleration of any right or obligation or loss of a benefit under, or give
rise to the creation or imposition of any lien, encumbrance, security interest, claim or
charge upon any property or assets of the Company or any subsidiary pursuant to, any
indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which
the Company or any of its Subsidiaries is a party or by which the Company or any of its
Subsidiaries is bound or to which any of the property or assets of the Company or any of its
Subsidiaries is subject, nor will such actions result in any violation of the provisions of
the charter or by-laws (or analogous governing instruments, as applicable) of the Company or
any of its Subsidiaries or any law, statute, rule, regulation, judgment, order or decree of
any court or governmental agency or body, domestic or foreign, having jurisdiction over the
Company or any of its Subsidiaries or any of their properties or assets. A “Debt Repayment
Triggering Event” means any event or condition that gives, or with the giving of notice or
lapse of time would give the holder of any note, debenture or other evidence of indebtedness
(or any person acting on such holder’s behalf) the right to require the repurchase,
redemption or repayment of all or a portion of such indebtedness by the Company or any of
its Subsidiaries.
(l) Except for the registration of the Shares under the Securities Act and such consents,
approvals, authorizations, registrations or qualifications as may be required under the
Exchange Act and applicable state or foreign securities laws, the Financial Industry
Regulatory Authority, Inc. (“FINRA”) and the Nasdaq Global Market in connection with the
offering and sale of the Shares by the Company, no consent, approval, authorization or order
of, or filing, qualification or registration with, any court or governmental agency or body,
foreign or domestic, which has not been made, obtained or taken and is not in full force and
effect, is required for the execution, delivery and performance of this Agreement, the
Subscription Agreements and the Escrow Agreement by the Company, the offer or sale of the
Shares or the consummation of the transactions contemplated hereby or thereby.
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(m) Ernst & Young LLP, who have audited certain financial statements and related schedules
included or incorporated by reference in the Registration Statement, the General Disclosure
Package and the Prospectus, and have audited the Company’s internal control over financial
reporting, is an independent registered public accounting firm as required by the Securities
Act and the Rules and Regulations and the Public Company Accounting Oversight Board (United
States) (the “PCAOB”). Except as disclosed in the Registration Statement and as
pre-approved in accordance with the requirements set forth in Section 10A of the Exchange
Act, Ernst & Young LLP has not been engaged by the Company to perform any “prohibited
activities” (as defined in Section 10A of the Exchange Act).
(n) The financial statements, together with the related notes and schedules, included or
incorporated by reference in the General Disclosure Package, the Prospectus and in the
Registration Statement fairly present the financial position and the results of operations
and changes in financial position of the Company and its consolidated Subsidiaries and other
consolidated entities at the respective dates or for the respective periods therein
specified. Such statements and related notes and schedules have been prepared in accordance
with the generally accepted accounting principles in the United States (“GAAP”) applied on a
consistent basis throughout the periods involved except as may be set forth in the related
notes included or incorporated by reference in the General Disclosure Package. The
financial statements, together with the related notes and schedules, included or
incorporated by reference in the General Disclosure Package and the Prospectus comply in all
material respects with the Securities Act, the Exchange Act, and the Rules and Regulations
and the rules and regulations under the Exchange Act. No other financial statements or
supporting schedules or exhibits are required by the Securities Act or the Rules and
Regulations to be described, or included or incorporated by reference in the Registration
Statement, the General Disclosure Package or the Prospectus. There is no pro forma or as
adjusted financial information which is required to be included in the Registration
Statement, the General Disclosure Package, or and the Prospectus or a document incorporated
by reference therein in accordance with the Securities Act and the Rules and Regulations
which has not been included or incorporated as so required.
(o) Neither the Company nor any of its Subsidiaries has sustained, since the date of the
latest audited financial statements included or incorporated by reference in the General
Disclosure Package, any material loss or interference with its 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, otherwise than as set forth or
contemplated in the General Disclosure Package; and, since such date, there has not been any
change in the number of shares of capital stock (other than Common Stock of the Company
issued pursuant to the exercise of stock options previously outstanding under the Company’s
stock option plans or the issuance of restricted Common Stock pursuant to employee stock
purchase plans) or long-term debt of the Company or any of its Subsidiaries, or any material
adverse changes, or any development involving a prospective material adverse change, in or
affecting the business, assets, financial position, stockholders’ equity (other than Common
Stock of the Company issued pursuant to the exercise of stock options previously outstanding
under the Company’s
9
stock option plans or the issuance of restricted Common Stock pursuant to employee stock
purchase plans) or results of operations of the Company and its Subsidiaries taken as a
whole, otherwise than as set forth or contemplated in the General Disclosure Package.
(p) Except as set forth in the General Disclosure Package, there is no legal or governmental
action, suit, claim or proceeding pending to which the Company or any of its Subsidiaries is
a party or of which any property or assets of the Company or any of its Subsidiaries is the
subject which is required to be described in the Registration Statement, the General
Disclosure Package or the Prospectus or a document incorporated by reference therein and is
not described therein, or which, singularly or in the aggregate, if determined adversely to
the Company or any of its Subsidiaries, could have a Material Adverse Effect; and to the
best of the Company’s knowledge, no such proceedings are threatened or contemplated by
governmental authorities or threatened by others.
(q) Neither the Company nor any of its Subsidiaries is in (i) violation of its charter or
by-laws (or analogous governing instrument, as applicable), (ii) default in any respect, and
no event has occurred which, with notice or lapse of time or both, would constitute such a
default, in the due performance or observance of any term, covenant or condition contained
in any indenture, mortgage, deed of trust, loan agreement, lease or other agreement or
instrument to which it is a party or by which it is bound or to which any of its property or
assets is subject or (iii) violation in any respect of any law, ordinance, governmental
rule, regulation or court order, decree or judgment to which it or its property or assets
may be subject except, in the case of clauses (ii) and (iii) of this paragraph (q), for any
violations or defaults which, singularly or in the aggregate, would not have a Material
Adverse Effect.
(r) The Company and each of its Subsidiaries possess all licenses, certificates,
authorizations and permits issued by, and have made all declarations and filings with, the
appropriate local, state, federal or foreign regulatory agencies or bodies which are
necessary or desirable for the ownership of their respective properties or the conduct of
their respective businesses as described in the General Disclosure Package and the
Prospectus (collectively, the “Governmental Permits”) except where any failures to possess
or make the same, singularly or in the aggregate, would not have a Material Adverse Effect.
The Company and its Subsidiaries are in compliance with all such Governmental Permits; all
such Governmental Permits are valid and in full force and effect, except where the validity
or failure to be in full force and effect would not, singularly or in the aggregate, have a
Material Adverse Effect. All such Governmental Permits are free and clear of any
restriction or condition that are in addition to, or materially different from those
normally applicable to similar licenses, certificates, authorizations and permits. Neither
the Company nor any subsidiary has received notification of any revocation or modification
(or proceedings related thereto) of any such Governmental Permit and the Company has no
reason to believe that any such Governmental Permit will not be renewed.
(s) Neither the Company nor any of its Subsidiaries is or, after giving effect to the
offering of the Shares and the application of the proceeds thereof as described in the
General Disclosure Package and the Prospectus, will become an “investment company”
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within the meaning of the Investment Company Act of 1940, as amended, and the rules and
regulations of the Commission thereunder.
(t) Neither the Company, its Subsidiaries nor, to the Company’s knowledge, any of the
Company’s or its Subsidiaries’ officers, directors or affiliates has taken or will take,
directly or indirectly, any action designed or intended to stabilize or manipulate the price
of any security of the Company, or which caused or resulted in, or which might in the future
reasonably be expected to cause or result in, stabilization or manipulation of the price of
any security of the Company.
(u) The Company and its Subsidiaries own or possess the right to use all patents,
trademarks, trademark registrations, service marks, service xxxx registrations, trade names,
copyrights, licenses, inventions, software, databases, know-how, Internet domain names,
trade secrets and other unpatented and/or unpatentable proprietary or confidential
information, systems or procedures, and other intellectual property (collectively,
“Intellectual Property”) necessary to carry on their respective businesses as currently
conducted, and as proposed to be conducted and described in the General Disclosure Package
and the Prospectus, and the Company has not received any notice of infringement of or
conflict with asserted rights of others with respect to the foregoing except for those that
could not have a Material Adverse Effect. To the Company’s knowledge, the Intellectual
Property licenses which the company holds or has had granted to them by third parties
described in the General Disclosure Package and the Prospectus are valid, binding upon, and
enforceable by or against the parties thereto in accordance to its terms. The Company and
each of its subsidiaries have complied in all material respects with, are not in breach of
nor have they received any asserted or threatened claim of a breach of, and the Company has
no knowledge of, any breach or anticipated breach by any other person to any Intellectual
Property license which the company holds or has had granted to them by third parties. To
the Company’s knowledge, the Company’s and each of its Subsidiaries’ businesses as now
conducted and as proposed to be conducted do not and will not infringe or conflict with any
patents, trademarks, service marks, trade names, copyrights, trade secrets, licenses or
other Intellectual Property or franchise right of any person, except as would not,
individually or in the aggregate, reasonably be expected to result in a material adverse
effect. No claim has been made and is currently outstanding against the Company or any of
its Subsidiaries alleging the infringement by the Company or any of its Subsidiaries of any
patent, trademark, service xxxx, trade name, copyright, trade secret, license in or other
intellectual property right or franchise right of any person. The Company and each of its
subsidiaries have taken all commercially reasonable steps to protect, maintain and safeguard
their rights in all Intellectual Property, including the execution of appropriate
nondisclosure and confidentiality agreements. The consummation of the transactions
contemplated by this Agreement will not result in the loss or impairment of or payment of
any additional amounts with respect to, nor require the consent of any other person in
respect of, the Company’s or any of its subsidiaries’ right to own, use or hold for use any
of the Intellectual Property as owned, used or held for use in the conduct of the businesses
as currently conducted, except for those that could not have a Material Adverse Effect. No
claims have been asserted or threatened against the Company or any of its Subsidiaries
alleging a violation of any person’s privacy or personal information or
11
data rights and the consummation of the transactions contemplated hereby will not breach or
otherwise cause any violation of any law related to privacy, data protection, or the
collection and use of personal information collected, used, or held for use by the Company
or any of its Subsidiaries in the conduct of the Company’s or any of its Subsidiaries’
businesses. The Company and each of its Subsidiaries take reasonable measures to ensure
that such information is protected against unauthorized access, use, modification, or other
misuse.
(v) The Company and each of its Subsidiaries have good and marketable title in fee simple
to, or have valid rights to lease or otherwise use, all items of real or personal property
which are material to the business of the Company and its Subsidiaries taken as a whole, in
each case free and clear of all liens, encumbrances, security interests, claims and defects
that do not, singularly or in the aggregate, materially affect the value of such property
and do not interfere with the use made and proposed to be made of such property by the
Company or any of its Subsidiaries; and all of the leases and subleases material to the
business of the Company and its Subsidiaries, considered as one enterprise, and under which
the Company or any of its Subsidiaries hold properties described in the General Disclosure
Package and the Prospectus, are in full force and effect, and neither the Company nor any
subsidiary has received any notice of any material claim of any sort that has been asserted
by anyone adverse to the rights of the Company or any subsidiary under any of the leases or
subleases mentioned above, or affecting or questioning the rights of the Company or such
subsidiary to the continued possession of the leased or subleased premises under any such
lease or sublease.
(w) There is no document, contract, permit or instrument, affiliate transaction or
off-balance sheet transaction (including, without limitation, any “variable interests” in
“variable interest entities,” as such terms are defined in Financial Accounting Standards
Board Interpretation No. 46) of a character required to be described in the Registration
Statement, the Pricing Prospectus or the Prospectus or to be filed as an exhibit to the
Registration Statement that is not so described or filed as required.
(x) No labor disturbance by the employees of the Company or any of its Subsidiaries exists
or, to the best of the Company’s knowledge, is imminent, and the Company has not received
notice of any existing or imminent labor disturbance by its or any of its Subsidiaries’
principal contractors, that could reasonably be expected, singularly or in the aggregate, to
have a Material Adverse Effect. The Company has not received notice that any key employee
or significant group of employees of the Company or any subsidiary plans to terminate
employment with the Company or any such subsidiary.
(y) No “prohibited transaction” (as defined in Section 406 of the Employee Retirement Income
Security Act of 1974, as amended, including the regulations and published interpretations
thereunder (“ERISA”), or Section 4975 of the Internal Revenue Code of 1986, as amended from
time to time (the “Code”)) or “accumulated funding deficiency” (as defined in Section 302 of
ERISA) or any of the events set forth in Section 4043(b) of ERISA (other than events with
respect to which the thirty (30)-day notice requirement under Section 4043 of ERISA has been
waived) has occurred or could reasonably be expected to occur with respect to any employee
benefit plan of the Company or any of its Subsidiaries which could, singularly or in the
aggregate, have a
12
Material Adverse Effect. Each employee benefit plan of the Company or any of its
Subsidiaries is in compliance in all material respects with applicable law, including ERISA
and the Code. The Company and its Subsidiaries have not incurred and could not reasonably
be expected to incur liability under Title IV of ERISA with respect to the termination of,
or withdrawal from, any pension plan (as defined in ERISA). Each pension plan for which the
Company or any of its Subsidiaries would have any liability that is intended to be qualified
under Section 401(a) of the Code is so qualified, and nothing has occurred, whether by
action or by failure to act, which could, singularly or in the aggregate, cause the loss of
such qualification.
(z) The Company and its Subsidiaries are in compliance with all foreign, federal, state and
local rules, laws and regulations relating to the use, treatment, storage and disposal of
hazardous or toxic substances or waste and protection of health and safety or the
environment which are applicable to their businesses (“Environmental Laws”), except where
the failure to comply would not, singularly or in the aggregate, have a Material Adverse
Effect.
(aa) The Company and each of its Subsidiaries (i) have timely filed all necessary federal,
state, local and foreign tax returns, and all such returns were true, complete and correct,
(ii) have paid all federal, state, local and foreign taxes, assessments, governmental or
other charges due and payable for which they are liable, including, without limitation, all
sales and use taxes and all taxes which the Company or any of its Subsidiaries is obligated
to withhold from amounts owing to employees, creditors and third parties, and (iii) except
as described in the documents incorporated by reference in the Prospectus, do not have any
tax deficiency or claims outstanding or assessed or, to the best of their knowledge,
proposed against any of them, except those, in each of the cases described in clauses (i),
(ii) and (iii) of this paragraph (aa), that would not, singularly or in the aggregate, have
a Material Adverse Effect. The Company and its Subsidiaries each have not engaged in any
transaction which is a corporate tax shelter or which could be characterized as such by the
Internal Revenue Service or any other taxing authority. The accruals and reserves on the
books and records of the Company and its Subsidiaries in respect of tax liabilities for any
taxable period not yet finally determined are adequate to meet any assessments and related
liabilities for any such period, and since December 31, 2008 the Company and its
Subsidiaries each have not incurred any liability for taxes other than in the ordinary
course.
(bb) The Company and each of its Subsidiaries carry, or are covered by, insurance provided
by recognized, financially sound and reputable institutions with policies in such amounts
and covering such risks as is adequate for the conduct of their respective businesses and
the value of their respective properties and as is customary for companies engaged in
similar businesses in similar industries. The Company has no reason to believe that it or
any subsidiary will not be able (i) to renew its existing insurance coverage as and when
such policies expire or (ii) to obtain comparable coverage from similar institutions as may
be necessary or appropriate to conduct its business as now conducted and at a cost that
would not result in a Material Adverse Effect. Neither the Company nor any of its
Subsidiaries have been denied any insurance coverage that they have sought or for which they
have applied.
13
(cc) The Company and its Subsidiaries each maintain a system of internal accounting and
other controls sufficient to provide reasonable assurances that (i) transactions are
executed in accordance with management’s general or specific authorizations; (ii)
transactions are recorded as necessary to permit preparation of financial statements in
conformity with GAAP 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. Except as
described in the General Disclosure Package, since the end of the Company’s most recent
audited fiscal year, there as been (A) no material weakness in the Company’s internal
control over financial reporting (whether or not remediated) and (B) no change in the
Company’s internal control over financial reporting that has materially affected, or is
reasonably likely to materially affect, the Company’s internal control over financial
reporting.
(dd) The Company maintains disclosure controls and procedures (as defined in Rule 13a-14(c)
under the Exchange Act); such disclosure controls and procedures have been designed to
ensure that material information relating to the Company and its Subsidiaries is made known
to the Company’s principal executive officer and principal financial officer by others
within the Company; and such disclosure controls and procedures are effective.
(ee) There are no affiliations or associations between any member of FINRA and any of the
Company’s officers, directors or, to the Company’s knowledge, 5% or greater
security-holders, except as set forth in the Registration Statement and the Prospectus.
(ff) The minute books of the Company and each of its Subsidiaries that would be a
“significant subsidiary” within the meaning of Rule 1-02(w) of Regulation S-X under the
Exchange Act and as listed on Schedule C (such a significant subsidiary of the
Company, a “Significant Subsidiary”) for the period commencing on July 1, 2006 to the date
of this Agreement have been made available to the Placement Agent and counsel for the
Placement Agent, and such books (i) contain a complete summary of all meetings and actions
of the board of directors (including each board committee) and shareholders of the Company
(or analogous governing bodies and interest holders, as applicable), and each of its
Significant Subsidiaries since the time of its respective incorporation or organization
through the date of the latest meeting and action, and (ii) accurately in all material
respects reflect all transactions referred to in such minutes.
(gg) There is no franchise, lease, contract, agreement or document required by the
Securities Act or by the Rules and Regulations to be described in the General Disclosure
Package and in the Prospectus or a document incorporated by reference therein or to be filed
as an exhibit to the Registration Statement or a document incorporated by reference therein
which is not described or filed therein as required; and all descriptions of any such
franchises, leases, contracts, agreements or documents contained in the Registration
Statement or in a document incorporated by reference therein are accurate and complete
descriptions of such documents in all material respects. Other than as described in the
General Disclosure Package, no such franchise, lease, contract or agreement has been
suspended or terminated for convenience or default by the Company or any of its
14
Subsidiaries or any of the other parties thereto, and neither the Company nor any of its
Subsidiaries has received notice nor does the Company have any other knowledge of any such
pending or threatened suspension or termination, except for such pending or threatened
suspensions or terminations that would not reasonably be expected to, singularly or in the
aggregate, have a Material Adverse Effect.
(hh) No relationship, direct or indirect, exists between or among the Company and any of its
Subsidiaries on the one hand, and the directors, officers, or to the Company’s knowledge,
the stockholders (or analogous interest holders), customers or suppliers of the Company or
any of its Subsidiaries or any of their affiliates on the other hand, which is required to
be described in the General Disclosure Package and the Prospectus or a document incorporated
by reference therein and which is not so described.
(ii) No person or entity has the right to require registration of shares of Common Stock or
other securities of the Company or any of its Subsidiaries because of the filing or
effectiveness of the Registration Statement or otherwise, except for persons and entities
who have expressly waived such right in writing or who have been given timely and proper
written notice and have failed to exercise such right within the time or times required
under the terms and conditions of such right. Except as described in the General Disclosure
Package and in any documents filed or referred to as exhibits to the documents incorporated
by reference in the Registration Statement, there are no persons with registration rights or
similar rights to have any securities registered by the Company or any of its Subsidiaries
under the Securities Act.
(jj) Other than any agreements between the Company and the Placement Agent, neither the
Company nor any of its Subsidiaries owns any “margin securities” as that term is defined in
Regulation U of the Board of Governors of the Federal Reserve System (the “Federal Reserve
Board”), and none of the proceeds of the sale of the Shares will be used, directly or
indirectly, for the purpose of purchasing or carrying any margin security, for the purpose
of reducing or retiring any indebtedness which was originally incurred to purchase or carry
any margin security or for any other purpose which might cause any of the Shares to be
considered a “purpose credit” within the meanings of Regulation T, U or X of the Federal
Reserve Board.
(kk) Neither the Company nor any of its Subsidiaries is a party to any contract, agreement
or understanding with any person that would give rise to a valid claim against the Company
or the Placement Agent for a brokerage commission, finder’s fee or like payment in
connection with the offering and sale of the Shares or any transaction contemplated by this
Agreement, the Registration Statement, the General Disclosure Package or the Prospectus.
(ll) No forward-looking statement (within the meaning of Section 27A of the Securities Act
and Section 21E of the Exchange Act) contained in either the General Disclosure Package or
the Prospectus has been made or reaffirmed without a reasonable basis or has been disclosed
other than in good faith.
(mm) The Company is subject to and in compliance in all material respects with the reporting
requirements of Section 13 or Section 15(d) of the Exchange Act. The Common Stock is
registered pursuant to Section 12(b) of the Exchange Act and is listed
15
on the Nasdaq Global Market (the “NASDAQ GM”), and the Company has taken no action designed
to, or reasonably likely to have the effect of, terminating the registration of the Common
Stock under the Exchange Act or delisting the Common Stock from the NASDAQ GM, nor has the
Company received any notification that the Commission or NASDAQ GM or is contemplating
terminating such registration or listing. No consent, approval, authorization or order of,
or filing, notification or registration with, the NASDAQ GM is required for the listing and
trading of the Common Stock on the NASDAQ GM, except for (i) a Notification Form: Listing of
Additional Shares and (ii) a Notification Form: Change in the Number of Shares Outstanding.
(nn) The Company is in compliance with all applicable provisions of the Xxxxxxxx-Xxxxx Act
of 2002 and all rules and regulations promulgated thereunder or implementing the provisions
thereof (the “Xxxxxxxx-Xxxxx Act”).
(oo) The Company is in compliance with all applicable corporate governance requirements set
forth in the Nasdaq Marketplace Rules that are then in effect.
(pp) Neither the Company nor any of its Subsidiaries nor, to the best of the Company’s
knowledge, any employee or agent of the Company or any subsidiary, has made any contribution
or other payment to any official of, or candidate for, any federal, state, local or foreign
office in violation of any law (including the Foreign Corrupt Practices Act of 1977, as
amended) or of the character required to be disclosed in the Registration Statement, the
General Disclosure Package or the Prospectus or a document incorporated by reference
therein.
(qq) There are no transactions, arrangements or other relationships between and/or among the
Company, any of its affiliates (as such term is defined in Rule 405 of the Securities Act)
and any unconsolidated entity, including, but not limited to, any structure finance, special
purpose or limited purpose entity that could reasonably be expected to materially affect the
Company’s or any of its Subsidiaries’ liquidity or the availability of or requirements for
their capital resources required to be described in the General Disclosure Package and the
Prospectus or a document incorporated by reference therein which have not been described as
required.
(rr) There are no outstanding loans, advances (except normal advances for business expenses
in the ordinary course of business) or guarantees or indebtedness by the Company or any of
its Subsidiaries to or for the benefit of any of the officers or directors of the Company,
any of its Subsidiaries or any of their respective family members, except as disclosed in
the Registration Statement, the General Disclosure Package and the Prospectus.
(ss) The statistical and market related data included in the Registration Statement, the
General Disclosure Package and the Prospectus are based on or derived from sources that the
Company believes to be reliable and accurate, and such data agree with the sources from
which they are derived.
(tt) The operations of the Company and its Subsidiaries are and have been conducted at all
times in compliance with applicable financial recordkeeping and reporting requirements of
the Currency and Foreign Transactions Reporting Act of 1970, as amended, applicable money
laundering statutes and applicable rules and regulations
16
thereunder (collectively, the “Money Laundering Laws”), and no action, suit or proceeding by
or before any court or governmental agency, authority or body or any arbitrator involving
the Company or any of its Subsidiaries with respect to the Money Laundering Laws is pending,
or to the best knowledge of the Company, threatened.
(uu) Neither the Company nor any of its Subsidiaries nor, to the knowledge of the Company,
any director, officer, agent, employee or affiliate of the Company or any of its
subsidiaries is currently subject to any U.S. sanctions administered by the Office of
Foreign Assets Control of the U.S. Treasury Department (“OFAC”); and the Company will not
directly or indirectly use the proceeds of the offering, or lend, contribute or otherwise
make available such proceeds to any subsidiary, joint venture partner or other person or
entity, for the purpose of financing the activities of any person currently subject to any
U.S. sanctions administered by OFAC.
(vv) Neither the Company nor any subsidiary nor any of their affiliates (within the meaning
of FINRA Conduct Rule 2720(b)(1)(a)) directly or indirectly controls, are controlled by, or
is under common control with, or is an associated person (within the meaning of Article I,
Section 1(ee) of the By-laws of FINRA) of, any member firm of FINRA.
(ww) The Company satisfies the pre-1992 eligibility requirements for the use of a
registration statement on Form S-3 in connection with the Offering contemplated thereby (the
pre-1992 eligibility requirements for the use of the registration statement on Form S-3
include (i) having a non-affiliate, public common equity float of at least $150 million, or
a non-affiliate, public common equity float of at least $100 million and annual trading
volume of at least three million shares and (ii) having been subject to the Exchange Act
reporting requirements for a period of 36 months).
(xx) No approval of the shareholders of the Company under the rules and regulations of
Nasdaq (including Rule 5635 of the Nasdaq Listing Rules) is required for the Company to
issue and deliver to the Purchasers the Shares.
Any certificate signed by or on behalf of the Company and delivered to the Placement Agent or to
counsel for the Placement Agent shall be deemed to be a representation and warranty by the Company
to the Placement Agent and the Purchasers as to the matters covered thereby.
3. The Closing. The time and date of closing and delivery of the documents required to be
delivered to the Placement Agent pursuant to Sections 4 and 6 hereof shall be at
10:00 A.M., New York time, on July 2, 2009 (the “Closing Date”) at the office of Cooley Godward
Kronish LLP, 0000 Xxxxxxx Xxxxxx, Xxxx Xxxx, XX 00000-0000.
4. Further Agreements Of The Company. The Company agrees with the Placement Agent
and the Purchasers:
(a) To prepare the Rule 462(b) Registration Statement, if necessary, in a form approved by
the Placement Agent and file such Rule 462(b) Registration Statement with the Commission on
the date hereof; to prepare the Prospectus in a form approved by the Placement Agent
containing information previously omitted at the time of effectiveness of the Registration
Statement in reliance on rules 430A, 430B and 430C and to file such Prospectus pursuant to
Rule 424(b) of the Rules and Regulations not later than the second
17
(2nd) business day following the execution and delivery of this Agreement or, if
applicable, such earlier time as may be required by Rule 430A of the Rules and Regulations;
to notify the Placement Agent immediately of the Company’s intention to file or prepare any
supplement or amendment to any Registration Statement or to the Prospectus and to make no
amendment or supplement to the Registration Statement, the General Disclosure Package or to
the Prospectus to which the Placement Agent shall reasonably object by notice to the Company
after a reasonable period to review; to advise the Placement Agent, promptly after it
receives notice thereof, of the time when any amendment to any Registration Statement has
been filed or becomes effective or any supplement to the General Disclosure Package or the
Prospectus or any amended Prospectus has been filed and to furnish the Placement Agent
copies thereof; to file promptly all material required to be filed by the Company with the
Commission pursuant to Rule 433(d) or 163(b)(2), as the case may be; to file promptly all
reports and any definitive proxy or information statements required to be filed by the
Company with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange
Act subsequent to the date of the Prospectus and for so long as the delivery of a prospectus
(or in lieu thereof, the notice referred to in Rule 173(a) of the Rules and Regulations) is
required in connection with the offering or sale of the Shares; to advise the Placement
Agent, promptly after it receives notice thereof, of the issuance by the Commission of any
stop order or of any order preventing or suspending the use of any Preliminary Prospectus,
any Issuer Free Writing Prospectus or the Prospectus, of the suspension of the qualification
of the Shares for offering or sale in any jurisdiction, of the initiation or threatening of
any proceeding for any such purpose, or of any request by the Commission for the amending or
supplementing of the Registration Statement, the General Disclosure Package or the
Prospectus or for additional information; and, in the event of the issuance of any stop
order or of any order preventing or suspending the use of any Preliminary Prospectus, any
Issuer Free Writing Prospectus or the Prospectus or suspending any such qualification, and
promptly to use its best efforts to obtain the withdrawal of such order.
(b) The Company represents and agrees that, unless it obtains the prior consent of the
Placement Agent, it has not made and will not, make any offer relating to the Shares that
would constitute a “free writing prospectus” as defined in Rule 405 of the Rules and
Regulations unless the prior written consent of the Placement Agent has been received (each,
a “Permitted Free Writing Prospectus”); provided that the prior written consent of the
Placement Agent hereto shall be deemed to have been given in respect of the Issuer Free
Writing Prospectus(es) included in Schedule A hereto. The Company represents that
it has treated and agrees that it will treat each Permitted Free Writing Prospectus as an
Issuer Free Writing Prospectus, comply with the requirements of Rules 164 and 433 of the
Rules and Regulations applicable to any Issuer Free Writing Prospectus, including the
requirements relating to timely filing with the Commission, legending and record keeping and
will not take any action that would result in the Placement Agent or the Company being
required to file with the Commission pursuant to Rule 433(d) of the Rules and Regulations a
free writing prospectus prepared by or on behalf of such Placement Agent that such Placement
Agent otherwise would not have been required to file thereunder.
(c) If at any time when a Prospectus relating to the Shares is required to be delivered
under the Securities Act, any event occurs or condition exists as a result of which the
18
Prospectus, as then amended or supplemented, would include any untrue statement of a
material fact or omit to state a material fact necessary in order to make the statements
therein, in light of the circumstances under which they were made, not misleading, or the
Registration Statement, as then amended or supplemented, would include any untrue statement
of a material fact or omit to state a material fact necessary to make the statements therein
not misleading, or if for any other reason it is necessary at any time to amend or
supplement any Registration Statement or the Prospectus to comply with the Securities Act or
the Exchange Act, the Company will promptly notify the Placement Agent, and upon the
Placement Agent’s request, the Company will promptly prepare and file with the Commission,
at the Company’s expense, an amendment to the Registration Statement or an amendment or
supplement to the Prospectus that corrects such statement or omission or effects such
compliance and will deliver to the Placement Agent, without charge, such number of copies
thereof as the Placement Agent may reasonably request. The Company consents to the use of
the Prospectus or any amendment or supplement thereto by the Placement Agent.
(d) If the General Disclosure Package is being used to solicit offers to buy the Shares at a
time when the Prospectus is not yet available to prospective purchasers and any event shall
occur as a result of which, in the judgment of the Company or in the reasonable opinion of
the Placement Agent, it becomes necessary to amend or supplement the General Disclosure
Package in order to make the statements therein, in the light of the circumstances then
prevailing, not misleading, or to make the statements therein not conflict with the
information contained or incorporated by reference in the Registration Statement then on
file and not superseded or modified, or if it is necessary at any time to amend or
supplement the General Disclosure Package to comply with any law, the Company promptly will
either (i) prepare, file with the Commission (if required) and furnish to the Placement
Agent and any dealers an appropriate amendment or supplement to the General Disclosure
Package or (ii) prepare and file with the Commission an appropriate filing under the
Exchange Act which shall be incorporated by reference in the General Disclosure Package so
that the General Disclosure Package as so amended or supplemented will not, in the light of
the circumstances then prevailing, be misleading or conflict with the Registration Statement
then on file, or so that the General Disclosure Package will comply with law.
(e) If at any time following issuance of an Issuer Free Writing Prospectus there occurred or
occurs an event or development as a result of which such Issuer Free Writing Prospectus
conflicted or will conflict with the information contained in the Registration Statement,
Pricing Prospectus or Prospectus, including any document incorporated by reference therein
and any prospectus supplement deemed to be a part thereof and not superseded or modified or
included or would include an untrue statement of a material fact or omitted or would omit to
state a material fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances prevailing at the subsequent time, not
misleading, the Company has promptly notified or will promptly notify the Placement Agent so
that any use of the Issuer Free Writing Prospectus may cease until it is amended or
supplemented and has promptly amended or will promptly amend or supplement, at its own
expense, such Issuer Free Writing Prospectus to eliminate or correct such conflict, untrue
statement or omission. The
19
foregoing sentence does not apply to statements in or omissions from any Issuer Free Writing
Prospectus in reliance upon, and in conformity with, written information furnished to the
Company by the Placement Agent specifically for inclusion therein, which information the
parties hereto agree is limited to the Placement Agent’s Information.
(f) To furnish promptly to the Placement Agent and to counsel for the Placement Agent a
signed copy of the Registration Statement as originally filed with the Commission, and of
each amendment thereto filed with the Commission, including all consents and exhibits filed
therewith.
(g) To the extent not available on the Commission’s XXXXX system, to deliver promptly to the
Placement Agent in New York City such number of the following documents as the Placement
Agent shall reasonably request: (i) conformed copies of the Registration Statement as
originally filed with the Commission (in each case excluding exhibits), (ii) any Preliminary
Prospectus, (iii) any Issuer Free Writing Prospectus, (iv) the Prospectus (the delivery of
the documents referred to in clauses (i), (ii), (iii) and (iv) of this paragraph (g) to be
made not later than 10:00 A.M., New York time, on the business day following the execution
and delivery of this Agreement), (v) conformed copies of any amendment to the Registration
Statement (excluding exhibits), (vi) any amendment or supplement to the General Disclosure
Package or the Prospectus (the delivery of the documents referred to in clauses (v) and (vi)
of this paragraph (g) to be made not later than 10:00 A.M., New York City time, on the
business day following the date of such amendment or supplement) and (vii) any document
incorporated by reference in the General Disclosure Package or the Prospectus (excluding
exhibits thereto) (the delivery of the documents referred to in clause (vi) of this
paragraph (g) to be made not later than 10:00 A.M., New York City time, on the business day
following the date of such document).
(h) To make generally available to its shareholders as soon as practicable, but in any event
not later than eighteen (18) months after the effective date of each Registration Statement
(as defined in Rule 158(c) of the Rules and Regulations), an earnings statement of the
Company and its Subsidiaries (which need not be audited) complying with Section 11(a) of the
Securities Act and the Rules and Regulations (including, at the option of the Company, Rule
158); and to furnish to its shareholders as soon as practicable after the end of each fiscal
year an annual report (including a balance sheet and statements of income, shareholders’
equity and cash flows of the Company and its consolidated subsidiaries certified by
independent public accountants) and as soon as possible after each of the first three fiscal
quarters of each fiscal year (beginning with the first fiscal quarter after the effective
date of such Registration Statement), consolidated summary financial information of the
Company and its Subsidiaries for such quarter in reasonable detail.
(i) To take promptly from time to time such actions as the Placement Agent may reasonably
request to qualify the Shares for offering and sale under the securities or Blue Sky laws of
such jurisdictions (domestic or foreign) as the Placement Agent may designate and to
continue such qualifications in effect, and to comply with such laws, for so long as
required to permit the offer and sale of Shares in such jurisdictions; provided
20
that the Company and its Subsidiaries shall not be obligated to qualify as foreign
corporations in any jurisdiction in which they are not so qualified or to file a general
consent to service of process in any jurisdiction.
(j) To the extent not available on the Commission’s XXXXX system, upon request, during the
period of five (5) years from the date hereof, to the extent not available on the
Commission’s XXXXX system, to deliver to the Placement Agent, (i) as soon as they are
available, copies of all reports or other communications furnished to shareholders, and (ii)
as soon as they are available, copies of any reports and financial statements furnished or
filed with the Commission or any national securities exchange or automatic quotation system
on which the Shares are listed or quoted.
(k) That the Company will not, for a period of ninety (90) days from the date of the
Prospectus, (the “Lock-Up Period”) without the prior written consent of Xxxxxxx, directly or
indirectly offer, sell, assign, transfer, pledge, contract to sell, or otherwise dispose of,
any shares of Common Stock or any securities convertible into or exercisable or exchangeable
for Common Stock, other than (i) the Company’s sale of the Shares hereunder, (ii) the
issuance of restricted Common Stock or options to acquire Common Stock pursuant to the
Company’s employee benefit plans, qualified stock option plans or other employee
compensation plans as such plans are in existence on the date hereof and described in the
Prospectus, (iii) the issuance of Common Stock or any securities convertible into or
exercisable or exchangeable for Common Stock pursuant to the vesting or exercises of
options, restricted stock units, warrants or rights outstanding on the date hereof, and (iv)
the Company’s withholding of shares to cover tax payments due upon vesting of restricted
stock held by certain officers of the Company, or (v) the issuance of Common Stock or
securities convertible into or exercisable or exchangeable for Common Stock (and the
issuance of Common Stock pursuant to the terms of such securities convertible into or
exercisable or exchangeable for Common Stock) in connection with strategic transactions
approved by the Board of Directors of the Company involving the Company and other entities,
including without limitation, joint venture, licensing, collaboration, manufacturing,
development, marketing, co-promotion or distribution arrangements. The Company will cause
each executive officer and director listed in Schedule B to furnish to the Placement
Agent, prior to the Closing Date, a letter, substantially in the form of Exhibit B
hereto, pursuant to which each such person shall agree, among other things, not to directly
or indirectly offer, sell, assign, transfer, pledge, contract to sell, or otherwise dispose
of, any shares of Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock, not to engage in any swap or other agreement or arrangement
that transfers, in whole or in part, directly or indirectly, the economic risk of ownership
of Common Stock or any such securities and not to engage in any short selling of any Common
Stock or any such securities, during the Lock-Up Period, without the prior written consent
of Xxxxxxx. The Company also agrees that during such period, the Company will not file any
registration statement, preliminary prospectus or prospectus, or any amendment or supplement
thereto, under the Securities Act for any such transaction or which registers, or offers for
sale, Common Stock or any securities convertible into or exercisable or exchangeable for
Common Stock, except for a registration statement on Form S-8 relating to employee benefit
plans and, if required as a result of or contractual obligation
21
of the Company, registration statements required to be filed under existing agreements filed
or referenced as exhibits to the documents incorporated by reference in the Registration
Statement. The Company hereby agrees that (i) if it issues an earnings release or material
news, or if a material event relating to the Company occurs, during the last seventeen (17)
days of the Lock-Up Period, or (ii) if prior to the expiration of the Lock-Up Period, the
Company announces that it will release earnings results during the sixteen (16)-day period
beginning on the last day of the Lock-Up Period, the restrictions imposed by this paragraph
(k) or the letter shall continue to apply until the expiration of the eighteen (18)-day
period beginning on the issuance of the earnings release or the occurrence of the material
news or material event.
(l) To supply the Placement Agent with copies of all correspondence to and from, and all
documents issued to and by, the Commission in connection with the registration of the Shares
under the Securities Act or the Registration Statement, any Preliminary Prospectus or the
Prospectus, or any amendment or supplement thereto or document incorporated by reference
therein.
(m) [Intentionally Omitted]
(n) Prior to the Closing Date, not to issue any press release or other communication
directly or indirectly or hold any press conference with respect to the Company, its
condition, financial or otherwise, or earnings, business affairs or business prospects
(except for routine oral marketing communications in the ordinary course of business and
consistent with the past practices of the Company and of which the Placement Agent is
notified), without the prior written consent of the Placement Agent, unless in the judgment
of the Company and its counsel, and after notification to the Placement Agent, such press
release or communication is required by law.
(o) Until the Placement Agent shall have notified the Company of the completion of the
offering of the Shares, that the Company will not, and will cause its affiliated purchasers
(as defined in Regulation M under the Exchange Act) not to, either alone or with one or more
other persons, bid for or purchase, for any account in which it or any of its affiliated
purchasers has a beneficial interest, any Shares, or attempt to induce any person to
purchase any Shares; and not to, and to cause its affiliated purchasers not to, make bids or
purchase for the purpose of creating actual, or apparent, active trading in or of raising
the price of the Shares.
(p) Not to take any action prior to the Closing Date that would require the Prospectus to be
amended or supplemented pursuant to Section 4(c).
(q) To at all times comply with all applicable provisions of the Xxxxxxxx-Xxxxx Act in
effect from time to time.
(r) To apply the net proceeds from the sale of the Shares as set forth in the Registration
Statement, the General Disclosure Package and the Prospectus under the heading “Use of
Proceeds.”
(s) To use its commercially reasonable best efforts to list, subject to notice of issuance,
the Shares on the NASDAQ GM, and effect and maintain the quotation of the Shares on the
NASDAQ GM.
22
(t) To use its commercially reasonable best efforts to do and perform all things required to
be done or performed under this Agreement by the Company prior to the Closing Date and to
satisfy all conditions precedent to the delivery of the Shares.
5. Payment of Expenses. The Company agrees to pay, or reimburse if paid by the Placement
Agent, whether or not the transactions contemplated hereby are consummated or this Agreement is
terminated: (a) the costs incident to the authorization, issuance, sale, preparation and
delivery of the Shares to the Purchasers and any taxes payable in that connection; (b) the costs
incident to the Registration of the Shares under the Securities Act; (c) the costs incident to
the preparation, printing and distribution of the Registration Statement, the Base Prospectus,
any Preliminary Prospectus, any Issuer Free Writing Prospectus, the General Disclosure Package,
the Prospectus, any amendments, supplements and exhibits thereto or any document incorporated by
reference therein and the costs of printing, reproducing and distributing any transaction
document by mail, telex or other means of communications; (d) if applicable, the fees and
expenses (including related fees and expenses of counsel for the Placement Agent) incurred in
connection with securing any required review by FINRA of the terms of the sale of the Shares and
any filings made with FINRA; (e) any applicable listing, quotation or other fees; (f) the fees
and expenses (including related fees and expenses of counsel to the Placement Agent) of
qualifying the Shares under the securities laws of the several jurisdictions as provided in
Section 4(i) and of preparing, printing and distributing wrappers, Blue Sky Memoranda
and Legal Investment Surveys; (g) the cost of preparing and printing stock certificates; (h) all
fees and expenses of the registrar and transfer agent of the Shares; (i) the fees, disbursements
and expenses of counsel to the Placement Agent, which shall not exceed $75,000 and (j) all other
costs and expenses incident to the offering of the Shares or the performance of the obligations
of the Company under this Agreement (including, without limitation, the fees and expenses of the
Company’s counsel and the Company’s independent accountants and the travel and other expenses
incurred by Company personnel in connection with any “road show” including, without limitation,
any expenses advanced by the Placement Agent on the Company’s behalf (which will be promptly
reimbursed.); provided that, except to the extent otherwise provided in this Section 5,
and in Sections 6 and 8, the Placement Agent shall pay its own costs and
expenses.
6. Conditions to the Obligations of the Placement Agent and the Purchasers, and the Sale of
the Shares. The respective obligations of the Placement Agent hereunder and the Purchasers
under the Subscription Agreements, and the Closing of the sale of the Shares, are subject to the
accuracy, when made and as of the Applicable Time and on the Closing Date, of the
representations and warranties of the Company contained herein, to the accuracy of the
statements of the Company made in any certificates pursuant to the provisions hereof, to the
performance by the Company of its obligations hereunder, and to each of the following additional
terms and conditions:
(a) No stop order suspending the effectiveness of the Registration Statement or any part
thereof, preventing or suspending the use of any Base Prospectus, any Preliminary Prospectus,
the Prospectus or any Permitted Free Writing Prospectus or any part thereof shall have been
issued and no proceedings for that purpose or pursuant to Section 8A under the Securities Act
shall have been initiated or threatened by the Commission, and all requests for additional
information on the part of the Commission (to be included or incorporated by
23
reference in the Registration Statement or the Prospectus or otherwise) shall have been
complied with to the reasonable satisfaction of the Placement Agent; the Rule 462(b)
Registration Statement, if any, each Issuer Free Writing Prospectus, if any, and the Prospectus
shall have been filed with the Commission within the applicable time period prescribed for such
filing by, and in compliance with, the Rules and Regulations and in accordance with Section
4(a), and the Rule 462(b) Registration Statement, if any, shall have become effective
immediately upon its filing with the Commission; and FINRA shall have raised no objection to the
fairness and reasonableness of the terms of this Agreement or the transactions contemplated
hereby.
(b) The Placement Agent shall not have discovered and disclosed to the Company on or prior
to the Closing Date that the Registration Statement or any amendment or supplement thereto
contains an untrue statement of a fact which, in the opinion of counsel for the Placement Agent,
is material or omits to state any fact which, in the opinion of such counsel, is material and is
required to be stated therein or is necessary to make the statements therein not misleading, or
that the General Disclosure Package, any Issuer Free Writing Prospectus or the Prospectus or any
amendment or supplement thereto contains an untrue statement of fact which, in the opinion of
such counsel, is material or omits to state any fact which, in the opinion of such counsel, is
material and is necessary in order to make the statements, in the light of the circumstances in
which they were made, not misleading.
(c) All corporate proceedings and other legal matters incident to the authorization, form
and validity of each of this Agreement, the Subscription Agreements, the Escrow Agreement, the
Shares, the Registration Statement, the General Disclosure Package, each Issuer Free Writing
Prospectus, if any, and the Prospectus and all other legal matters relating to this Agreement
and the transactions contemplated hereby shall be reasonably satisfactory in all material
respects to counsel for the Placement Agent, and the Company shall have furnished to such
counsel all documents and information that they may reasonably request to enable them to pass
upon such matters.
(d) Xxxxxx Godward Kronish LLP shall have furnished to the Placement Agent such counsel’s
written opinion, as counsel to the Company, addressed to the Placement Agent and dated the
Closing Date, in form and substance reasonably satisfactory to the Placement Agent. Such
counsel shall also have furnished to the Placement Agent a written statement, addressed to the
Placement Agent and dated the Closing Date, in form and substance satisfactory to the Placement
Agent.
(e) [Intentionally Omitted]
(f) The Placement Agent shall have received from Proskauer Rose LLP, counsel for the
Placement Agent, such opinion or opinions and negative assurances statement, dated the Closing
Date, with respect to such matters as the Placement Agent may reasonably require, and the
Company shall have furnished to such counsel such documents as they request for enabling them to
pass upon such matters.
(g) At the time of the execution of this Agreement, the Placement Agent shall have received
from Ernst & Young LLP a letter, addressed to the Placement Agent, executed and dated such date,
in form and substance satisfactory to the Placement Agent (i) confirming that they are an
independent registered accounting firm with respect to the Company and its
24
Subsidiaries within the meaning of the Securities Act and the Rules and Regulations and
PCAOB and (ii) stating the conclusions and findings of such firm, of the type ordinarily
included in accountants’ “comfort letters” to underwriters, with respect to the financial
statements and certain financial information contained or incorporated by reference in the
Registration Statement, the General Disclosure Package and the Prospectus.
(h) On the effective date of any post-effective amendment to any Registration Statement and
on the Closing Date, the Placement Agent shall have received a letter (the “Bring-Down Letter”)
from Ernst & Young LLP addressed to the Placement Agent and dated the Closing Date confirming,
as of the date of the Bring-Down Letter (or, with respect to matters involving changes or
developments since the respective dates as of which specified financial information is given in
the General Disclosure Package and the Prospectus, as the case may be, as of a date not more
than three (3) business days prior to the date of the Bring-Down Letter), the conclusions and
findings of such firm, of the type ordinarily included in accountants’ “comfort letters” to
underwriters, with respect to the financial information and other matters covered by its letter
delivered to the Placement Agent concurrently with the execution of this Agreement pursuant to
paragraph (g) of this Section 6.
(i) The Company shall have furnished to the Placement Agent and the Purchasers a
certificate, dated the Closing Date, of its Chairman of the Board, Chief Executive Officer, its
President or a Vice President and its chief financial officer stating that (i) such officers
have carefully examined the Registration Statement, the General Disclosure Package, any
Permitted Free Writing Prospectus and the Prospectus and, in their opinion, the Registration
Statement and each amendment thereto, at the Applicable Time and as of the date of this
Agreement and as of the Closing Date did not include any untrue statement of a material fact and
did not omit to state a material fact required to be stated therein or necessary to make the
statements therein not misleading, and the General Disclosure Package, as of the Applicable Time
and as of the Closing Date, any Permitted Free Writing Prospectus as of its date and as of the
Closing Date, the Prospectus and each amendment or supplement thereto, as of the respective date
thereof and as of the Closing Date, did not include any untrue statement of a material fact and
did not omit to state a material fact necessary in order to make the statements therein, in the
light of the circumstances in which they were made, not misleading, (ii) since the effective
date of the Initial Registration Statement, no event has occurred which should have been set
forth in a supplement or amendment to the Registration Statement, the General Disclosure Package
or the Prospectus, (iii) to the best of their knowledge after reasonable investigation, as of
the Closing Date, the representations and warranties of the Company in this Agreement are true
and correct and the Company has complied with all agreements and satisfied all conditions on its
part to be performed or satisfied hereunder at or prior to the Closing Date, and (iv) there has
not been, subsequent to the date of the most recent audited financial statements included or
incorporated by reference in the General Disclosure Package, any material adverse change in the
financial position or results of operations of the Company and its Subsidiaries, or any change
or development that, singularly or in the aggregate, would involve a material adverse change or
a prospective material adverse change, in or affecting the condition (financial or otherwise),
results of operations, business or assets of the Company and its Subsidiaries taken as a whole,
except as set forth in the Prospectus.
25
(j) Since the date of the latest audited financial statements included in the General
Disclosure Package or incorporated by reference in the General Disclosure Package as of the date
hereof, (i) neither the Company nor any of its Subsidiaries shall have sustained any loss or
interference with its 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, otherwise than as set forth in the General Disclosure Package, and (ii) there shall not
have been any change in the number of shares of capital stock (other than Common Stock of the
Company issued pursuant to the exercise of stock options previously outstanding under the
Company’s stock option plans or the issuance of restricted Common Stock pursuant to employee
stock purchase plans) or long-term debt of the Company or any of its Subsidiaries, or any
change, or any development involving a prospective change, in or affecting the business, general
affairs, management, financial position, stockholders’ equity (other than Common Stock of the
Company issued pursuant to the exercise of stock options previously outstanding under the
Company’s stock option plans or the issuance of restricted Common Stock pursuant to employee
stock purchase plans) or results of operations of the Company and its Subsidiaries, otherwise
than as set forth in the General Disclosure Package, the effect of which, in any such case
described in clause (i) or (ii) of this paragraph (j), is, in the judgment of the Placement
Agent, so material and adverse as to make it impracticable or inadvisable to proceed with the
sale or delivery of the Shares on the terms and in the manner contemplated in the General
Disclosure Package.
(k) No action shall have been taken and no law, statute, rule, regulation or order shall
have been enacted, adopted or issued by any governmental agency or body which would prevent the
issuance or sale of the Shares or materially and adversely affect or potentially materially and
adversely affect the business or operations of the Company; and no injunction, restraining order
or order of any other nature by any federal or state court of competent jurisdiction shall have
been issued which would prevent the issuance or sale of the Shares or materially and adversely
affect or potentially materially and adversely affect the business or operations of the Company.
(l) The Company shall have filed an additional listing application with the NASDAQ GM in
connection with the Offering, and shall have received no objections thereto from the NASDAQ GM.
(m) The Placement Agent shall have received the written agreements, substantially in the
form of Exhibit B hereto, of the executive officers, directors, shareholders,
optionholders and warrantholders of the Company listed in Schedule B to this Agreement.
(n) The Company shall have entered into Subscription Agreements with each of the Purchasers
and such agreements shall be in full force and effect.
(o) The Company shall have entered into the Escrow Agreement and such agreement shall be in
full force and effect.
(p) Prior to the Closing Date, the Company shall have furnished to the Placement Agent such
further information, opinions, certificates (including a Secretary’s Certificate), letters or
documents as the Placement Agent shall have reasonably requested.
26
All opinions, letters, evidence and certificates mentioned above or elsewhere in this
Agreement shall be deemed to be in compliance with the provisions hereof only if they are in form
and substance reasonably satisfactory to counsel for the Placement Agent.
7. Indemnification and Contribution.
(a) The Company will indemnify and hold harmless the Placement Agent, its affiliates,
and their respective directors, officers, managers, members, employees, representatives
and agents and each person, if any, who controls the Placement Agent within the meaning
of Section 15 of the Securities Act or Section 20 of the Exchange Act, from and against
any and all losses, claims, liabilities, expenses and damages (including any and all
investigative, legal and other expenses reasonably incurred in connection with, and any
amount paid in settlement of, any action, suit or proceeding or any claim asserted), to
which they, or any of them, may become subject under the Securities Act, the Exchange
Act or other federal or state statutory law or regulation, at common law or otherwise,
insofar as such losses, claims, liabilities, expenses or damages arise out of or are
based on (A) any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement, any preliminary prospectus, the Base
Prospectus, the Pricing Prospectus, the Prospectus or any amendment or supplement
thereto, or any Issuer Free Writing Prospectus or any “issuer information” filed or
required to be filed pursuant to Rule 433(d) of the Rules and Regulations, or (B) the
omission or alleged omission to state in such document a material fact required to be
stated in it or necessary to make the statements in it not misleading in the light of
the circumstances in which they were made, in whole or in part, any inaccuracy in the
representations and warranties of the Company contained herein, or any failure of the
Company to perform its obligations hereunder or under law in connection with the
transactions contemplated hereby; provided, however, that the Company will not be liable
to the extent that such loss, claim, liability, expense or damage arises from the sale
of the Shares to any Purchaser and is based on an untrue statement or omission or
alleged untrue statement or omission made in reliance on and in conformity with
information relating to the Placement Agent furnished in writing to the Company by the
Placement Agent expressly for inclusion in the Registration Statement, any preliminary
prospectus, the Base Prospectus, the Pricing Prospectus, the Prospectus, or any Issuer
Free Writing Prospectus. The Company acknowledges that the Placement Agent’s
Information in the Pricing Prospectus and the Prospectus constitutes the only
information relating to the Placement Agent furnished in writing to the Company by the
Placement Agent expressly for inclusion in the Registration Statement, any preliminary
prospectus, the Base Prospectus, the Pricing Prospectus, the Prospectus, or any Issuer
Free Writing Prospectus. This indemnity agreement will be in addition to any liability
that the Company might otherwise have.
(b) The Placement Agent will indemnify and hold harmless the Company, each director of
the Company, each officer of the Company who signs the Registration Statement, and each
person, if any, who controls the Company within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act, to the same extent as the foregoing
indemnity from the Company to the Placement Agent, as set forth in Section 7(a),
but only insofar as losses, claims, liabilities, expenses or damages arise
27
out of or are based on any untrue statement or omission or alleged untrue statement or
omission made in reliance on and in conformity with information relating to the
Placement Agent furnished in writing to the Company by the Placement Agent expressly for
use in any preliminary prospectus, the Registration Statement, the Base Prospectus, any
Prospectus Supplement, the Prospectus, or any Issuer Free Writing Prospectus. The
Company acknowledges that the Placement Agent’s Information in the Prospectus
constitutes the only information relating to the Placement Agent furnished in writing to
the Company by the Placement Agent expressly for use in any preliminary prospectus, the
Registration Statement, the Base Prospectus, any Prospectus Supplement, the Prospectus,
or any Issuer Free Writing Prospectus. This indemnity will be in addition to any
liability that the Placement Agent might otherwise have.
(c) Any party that proposes to assert the right to be indemnified under this
Section 7 shall, promptly after receipt of notice of commencement of any action
against such party in respect of which a claim is to be made against an indemnifying
party or parties under this Section 7, notify each such indemnifying party in
writing of the commencement of such action, enclosing with such notice a copy of all
papers served, but the omission so to notify such indemnifying party will not relieve it
from any liability that it may have to any indemnified party under the foregoing
provisions of this Section 7 unless, and only to the extent that, such omission
results in the loss of substantive rights or defenses by the indemnifying party. If any
such action is brought against any indemnified party and it notifies the indemnifying
party of its commencement, the indemnifying party will be entitled to participate in
and, to the extent that it elects by delivering written notice to the indemnified party
promptly after receiving notice of the commencement of the action from the indemnified
party, jointly with any other indemnifying party similarly notified, to assume the
defense of the action, with counsel reasonably satisfactory to the indemnified party.
After notice from the indemnifying party to the indemnified party of its election to
assume the defense, the indemnifying party will not be liable to the indemnified party
for any legal or other expenses except as provided below and except for the reasonable
costs of investigation incurred by the indemnified party in connection with the defense.
The indemnified party will have the right to employ its own counsel in any such action,
but the fees, expenses and other charges of such counsel will be at the expense of such
indemnified party, unless (i) the employment of counsel by the indemnified party has
been authorized in writing by the indemnifying party, (ii) the indemnified party has
reasonably concluded (based on advice of counsel) that there may be legal defenses
available to it or other indemnified parties that are different from or in addition to
those available to the indemnifying party, (iii) a conflict or potential conflict exists
(based on advice of counsel to the indemnified party) between the indemnified party and
the indemnifying party (in which case the indemnifying party will not have the right to
direct the defense of such action on behalf of the indemnified party) or (iv) the
indemnifying party has not in fact employed counsel reasonably satisfactory to the
indemnified party to assume the defense of such action within a reasonable time after
receiving notice of the commencement of the action, in each of which cases the
reasonable fees, disbursements and other charges of counsel will be at the expense of
the indemnifying party or parties. It is understood that the
28
indemnifying party or parties shall not, in connection with any proceeding or related
proceedings in the same jurisdiction, be liable for the reasonable fees, disbursements
and other charges of more than one separate firm admitted to practice in such
jurisdiction at any one time for all such indemnified party or parties. All such fees,
disbursements and other charges will be reimbursed by the indemnifying party promptly as
they are incurred. No indemnifying party shall, without the prior written consent of
the indemnified party, effect any settlement of any pending or threatened action 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 (i) includes
an unconditional release of such indemnified party from all liability on any claims that
are the subject matter of such action and (ii) does not include a statement as to, or an
admission of, fault, culpability or a failure to act by or on behalf of an indemnified
party. An indemnifying party will not be liable for any settlement of any action or
claim effected without its written consent (which consent will not be unreasonably
withheld or delayed).
(d) If the indemnification provided for in this Section 7 is applicable in
accordance with its terms but for any reason is held to be unavailable to or
insufficient to hold harmless an indemnified party under paragraphs (a), (b) and (c) of
this Section 7 in respect of any losses, claims, liabilities, expenses and
damages referred to therein, then each applicable indemnifying party, in lieu of
indemnifying such indemnified party, shall contribute to the amount paid or payable
(including any investigative, legal and other expenses reasonably incurred in connection
with, and any amount paid in settlement of, any action, suit or proceeding or any claim
asserted, but after deducting any contribution received by the Company from persons
other than the Placement Agent, such as persons who control the Company within the
meaning of the Securities Act, officers of the Company who signed the Registration
Statement and directors of the Company, who also may be liable for contribution) by such
indemnified party as a result of such losses, claims, liabilities, expenses and damages
in such proportion as shall be appropriate to reflect the relative benefits received by
the Company, on the one hand, and the Placement Agent, on the other hand. The relative
benefits received by the Company, on the one hand, and the Placement Agent, on the other
hand, shall be deemed to be in the same proportion as the total net proceeds from the
offering (before deducting expenses) received by the Company bear to the total Placement
Fee received by the Placement Agent pursuant to this Agreement. If, but only if, the
allocation provided by the foregoing sentence is not permitted by applicable law, the
allocation of contribution shall be made in such proportion as is appropriate to reflect
not only the relative benefits referred to in the foregoing sentence but also the
relative fault of the Company, on the one hand, and the Placement Agent, on the other
hand, with respect to the statements or omissions that resulted in such loss, claim,
liability, expense or damage, or action in respect thereof, as well as any other
relevant equitable considerations with respect to such offering. Such relative fault
shall be determined by reference to whether the untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact relates to
information supplied by the Company or the Placement Agent, the intent of the parties
and their relative knowledge, access to information and opportunity to correct or
prevent such statement or omission. The Company and the
29
Placement Agent agree that it would not be just and equitable if contributions pursuant
to this Section 7(d) were to be determined by pro rata allocation or by any
other method of allocation that does not take into account the equitable considerations
referred to herein. The amount paid or payable by an indemnified party as a result of
the loss claim, liability, expense or damage, or action in respect thereof, referred to
above in this Section 7(d) shall be deemed to include, for purposes of this
Section 7(d), any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such action or
claim. Notwithstanding the provisions of this Section 7(d), in no case shall
the Placement Agent be required to contribute any amount in excess of the Fee received
by the Placement Agent pursuant to this Agreement. No person found guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act) will be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section 7(d), any person who controls a
party to this Agreement within the meaning of the Securities Act will have the same
rights to contribution as that party, and each officer of the Company who signed the
Registration Statement will have the same rights to contribution as the Company, subject
in each case to the provisions hereof. Any party entitled to contribution, promptly
after receipt of notice of commencement of any action against any such party in respect
of which a claim for contribution may be made under this Section 7(d), will
notify any such party or parties from whom contribution may be sought, but the omission
so to notify will not relieve the party or parties from whom contribution may be sought
from any other obligation it or they may have under this Section 7(d). No party
will be liable for contribution with respect to any action or claim settled without its
written consent (which consent will not be unreasonably withheld).
(e) The indemnity and contribution agreements contained in this Section 7 and
the representations and warranties of the Company contained in this Agreement shall
remain operative and in full force and effect regardless of (i) any investigation made
by or on behalf of the Placement Agent, (ii) acceptance by the Purchasers of any of the
Shares and payment therefor, or (iii) any termination of this Agreement.
8. Termination. The obligations of the Placement Agent and the Purchasers under this
Agreement and under the Subscription Agreements may be terminated at any time on or prior to the
Closing Date, by notice to the Company from the Placement Agent, without liability on the part
of the Placement Agent or the Purchasers to the Company if in the sole judgment of the Placement
Agent, (i) trading in any of the equity securities of the Company shall have been suspended or
limited by the Commission or by the NASDAQ GM, (ii) trading in securities generally on the New
York Stock Exchange or the NASDAQ GM shall have been suspended or limited or minimum or maximum
prices shall have been generally established on such exchange, or additional material
governmental restrictions, not in force on the date of this Agreement, shall have been imposed
upon trading in securities generally by such exchange, by order of the Commission or any court
or other governmental authority, or by the NASDAQ GM, (iii) a general banking moratorium shall
have been declared by either federal or New York State authorities or any material disruption of
the securities settlement or clearance services in the United States shall have occurred, or
(iv) any material adverse change in the financial or securities markets in the United States or
in
30
political, financial or economic conditions in the United States, any outbreak or
escalation of hostilities involving the United States, a declaration of a national emergency or
war by the United States, or other calamity or crisis, either within or outside the United
States, shall have occurred, the effect of which is such as to make it, in the sole judgment of
the Placement Agent, impracticable or inadvisable to proceed with completion of the placement of
the Shares on the terms and in the manner contemplated in the General Disclosure Package and the
Prospectus. In addition, the obligations of the Placement Agent and the Purchasers hereunder and
under the Subscription Agreements may be terminated by the Placement Agent, in its absolute
discretion by notice given to the Company prior to delivery of and payment for the Shares if,
prior to that time, any of the events described in Sections 6(i) and (j) have
occurred or if the Purchasers shall decline to purchase the Shares for any reason permitted
under this Agreement or the Subscription Agreements.
9. Reimbursement of Placement Agent’s Expenses. Notwithstanding anything to the contrary
in this Agreement, if (a) this Agreement shall have been terminated pursuant to
Section 8, (b) the Company shall fail to tender the Shares for delivery to the
Purchasers for any reason not permitted under this Agreement, (c) the Purchasers shall decline
to purchase the Shares for any reason permitted under this Agreement or (d) the sale of the
Shares is not consummated because any condition to the obligations of the Purchasers or the
Placement Agent set forth herein is not satisfied or because of the refusal, inability or
failure on the part of the Company to perform any agreement herein or to satisfy any condition
or to comply with the provisions hereof, then in addition to the payment of amounts in
accordance with Section 5, the Company shall reimburse the Placement Agent for the fees
and expenses of the Placement Agent’s counsel and for such other out-of-pocket expenses as shall
have been reasonably incurred by them in connection with this Agreement and the proposed
purchase of the Shares, and upon demand the Company shall pay the full amount thereof to the
Placement Agent.
10. No Fiduciary Relationship. Notwithstanding any preexisting relationship, advisory or
otherwise, between the parties or any oral representations or assurances previously or
subsequently made by the Placement Agent, the Company acknowledges and agrees that (i) the
purchase and sale of the Shares pursuant to this Agreement and the Subscription Agreements
(including the determination of the terms of the offering of the Shares) is an arm’s-length
commercial transaction between the Company and the several Purchasers, (ii) the Placement Agent
has not assumed any advisory or fiduciary responsibility in favor of the Company with respect to
the offering contemplated hereby or the process leading thereto (irrespective of whether the
Placement Agent has advised or is currently advising the Company on other matters) or any other
obligation to the Company except the obligations expressly set forth in this Agreement, (iii)
the Placement Agent and its affiliates may be engaged in a broad range of transactions that
involve interests that differ from those of the Company and have no obligation to disclose or
account to the Company for any of such differing interests, and (iv) the Company has consulted
its own legal, tax, accounting and financial advisors to the extent it deemed appropriate. The
Company hereby agrees that it will not claim that the Placement Agent has rendered advisory
services of any nature or respect, or owe a fiduciary or similar duty to the Company, in
connection with such transaction or the process leading thereto.
31
11. Successors; Persons Entitled to Benefit of Agreement. This Agreement shall inure to
the benefit of and be binding upon the Placement Agent, the Company, and each of their
respective successors and assigns. This Agreement shall also inure to the benefit of the
Purchasers as against the Company, and their respective successors and assigns, which shall be
third party beneficiaries hereof. Nothing expressed or mentioned in this Agreement is intended
or shall be construed to give any person, other than the persons mentioned in the preceding
sentences, any legal or equitable right, remedy or claim under or in respect of this Agreement,
or any provisions herein contained, this Agreement and all conditions and provisions hereof
being intended to be and being for the sole and exclusive benefit of such persons and for the
benefit of no other person; except that the representations, warranties, covenants, agreements
and indemnities of the Company contained in this Agreement shall also be for the benefit of the
Placement Agent Indemnified Parties and the indemnities of the Placement Agent shall be for the
benefit of the Company Indemnified Parties. It is understood that the Placement Agent’s
responsibility to the Company is solely contractual in nature and the Placement Agent does not
owe the Company, or any other party, any fiduciary duty as a result of this Agreement.
12. Survival of Indemnities, Representations, Warranties, etc. The respective indemnities,
covenants, agreements, representations, warranties and other statements of the Company and the
Placement Agent, as set forth in this Agreement or made by them respectively, pursuant to this
Agreement, shall remain in full force and effect, regardless of any investigation made by or on
behalf of the Placement Agent, the Company, the Purchasers or any person controlling any of them
and shall survive delivery of and payment for the Shares. Notwithstanding any termination of
this Agreement, including without limitation any termination pursuant to Sections 8 or
9, the indemnity and contribution agreements contained in Section 7 and the
covenants, representations, warranties set forth in this Agreement shall not terminate and shall
remain in full force and effect at all times.
13. Notices. All statements, requests, notices and agreements hereunder shall be in writing,
and:
(i) if to the Placement Agent, shall be delivered or sent by mail, telex, facsimile
transmission or email to Xxxxxxx & Company, LLC, Attention: Xxxxx Xxxxxxx, Fax: 000-000-0000
and email xxxxxxxx@xxxxxxx.xxx; and
(ii) if to the Company, shall be delivered or sent by mail, telex, facsimile transmission
or email to Phoenix Technologies Ltd., Attention: Xxxxxxx X. Xxx, VP, General Counsel, Fax:
(000) 000-0000, email xxx_xxx@xxxxxxx.xxx.
provided, however, that any notice to the Placement Agent pursuant to Section 7 shall be
delivered or sent by mail, telex or facsimile transmission to the Placement Agent at its address
set forth in its acceptance telex to the Placement Agent, which address will be supplied to any
other party hereto by the Placement Agent upon request. Any such statements, requests, notices or
agreements shall take effect at the time of receipt thereof, except that any such statement,
request, notice or agreement delivered or sent by email shall take effect at the time of
confirmation of receipt thereof by the recipient thereof.
32
14. Definition of Certain Terms. For purposes of this Agreement, (a) “business day” means any
day on which the New York Stock Exchange, Inc. is open for trading and (b) “Subsidiary” has the
meaning set forth in Rule 405 of the Rules and Regulations.
15. Governing Law, Agent For Service and Jurisdiction. This Agreement shall be governed by
and construed in accordance with the laws of the State of New York, including without limitation
Section 5-1401 of the New York General Obligations Law. No legal proceeding may be commenced,
prosecuted or continued in any court other than the courts of the State of New York located in the
City and County of New York or in the United States District Court for the Southern District of New
York, which courts shall have jurisdiction over the adjudication of such matters, and the Company
and the Placement Agent each hereby consent to the jurisdiction of such courts and personal service
with respect thereto. The Company and the Placement Agent each hereby consent to personal
jurisdiction, service and venue in any court in which any legal proceeding arising out of or in any
way relating to this Agreement is brought by any third party against the Company or the Placement
Agent. The Company and the Placement Agent each hereby waive all right to trial by jury in any
legal proceeding (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 legal proceeding
brought in any such court shall be conclusive and binding upon the Company and the Placement Agent
and may be enforced in any other courts in the jurisdiction of which the Company is or may be
subject, by suit upon such judgment.
16. Partial Unenforceability. The invalidity or unenforceability of any section, paragraph,
clause or provision of this Agreement shall not affect the validity or enforceability of any other
section, paragraph, clause or provision hereof. If any section, paragraph, clause or provision of
this Agreement is for any reason determined to be invalid or unenforceable, there shall be deemed
to be made such minor changes (and only such minor changes) as are necessary to make it valid and
enforceable.
17. General. This Agreement constitutes the entire agreement of the parties to this Agreement
and supersedes all prior written or oral and all contemporaneous oral agreements, understandings
and negotiations with respect to the subject matter hereof. In this Agreement, the masculine,
feminine and neuter genders and the singular and the plural include one another. The section
headings in this Agreement are for the convenience of the parties only and will not affect the
construction or interpretation of this Agreement. This Agreement may be amended or modified, and
the observance of any term of this Agreement may be waived, only by a writing signed by the Company
and the Placement Agent.
18. Counterparts. This Agreement may be signed in any number of counterparts, each of which
shall be an original, with the same effect as if the signatures thereto and hereto were upon the
same instrument.
33
If the foregoing is in accordance with your understanding of the agreement between the Company
and the Placement Agent, kindly indicate your acceptance in the space provided for that purpose
below.
| Very truly yours, | ||||
| PHOENIX TECHNOLOGIES LTD. | ||||
| By: | /s/ Xxxxxxx Xxxxxx | |||
| Name: | Xxxxxxx Xxxxxx | |||
| Title: | COO & CFO | |||
Accepted as of the date
first above written:
first above written:
| XXXXXXX & COMPANY, LLC | ||||
By: |
/s/ Xxxxx Xxxxx | |||
| Title: Managing Director | ||||
34
SCHEDULE A
General Use Free Writing Prospectuses
None
SCHEDULE B
List of officers and directors subject to Section 4
Xxxxxxx X. Xxxxxxx
Xxxxxxx X. Xxxxx
Xxxxxxx X. Xxxxxx
Xxxxxxxx Xxxxxxx
Xxxxxxx X. Xxxxx
Xxxxxxx X. Xxxxxx
Xxxxxx Xxxxx
Xxxxx Xxxxx
Xxxxxxx X. Xxx
SCHEDULE C
List of Company Subsidiaries
| Name | Domestic Jurisdiction | |
PTL (Phoenix Technologies Israel) Limited
|
Israel | |
Phoenix Technologies GmbH
|
Germany | |
Phoenix Technologies (Hungary) Kft.
|
Hungary | |
Phoenix Technologies Kabushiki Kaisha
|
Japan | |
Phoenix Technologies (Korea) Ltd
|
Korea | |
Phoenix Technologies Asia Pacific Ltd
|
Hong Kong | |
Phoenix Technologies (Nanjing) Ltd
|
PRC | |
Phoenix Technologies (Nanjing) Ltd., Shanghai branch
of Phoenix Technologies (Nanjing) Ltd |
||
Award Software Far East Ltd.
|
Hong Kong | |
Phoenix Technologies (Netherlands) B.V.
|
The Netherlands | |
PTL Software (India) Private Limited
|
India |
Significant Subsidiary
Phoenix Technologies Asia Pacific Ltd.
EXHIBIT A
Form of Subscription Agreement
2
EXHIBIT B
FORM OF LOCK-UP AGREEMENT
Xxxxxxx & Company, LLC
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
| Re: | Phoenix Technologies Ltd. – Offering of Common Stock |
Ladies and Gentlemen:
In order to induce Xxxxxxx & Company, LLC (“Xxxxxxx”), to enter in to a certain placement
agent agreement with Phoenix Technologies Ltd., a Delaware corporation (the “Company”), with
respect to the public offering of shares of the Company’s Common Stock, par value $0.001 per share
(“Common Stock”), the undersigned hereby agrees that for a period (the “lock-up period”) of ninety
(90) days following the date of the final prospectus filed by the Company with the Securities and
Exchange Commission in connection with such public offering, the undersigned will not, without the
prior written consent of Xxxxxxx, directly or indirectly, (i) offer, sell, assign, transfer,
pledge, contract to sell, or otherwise dispose of, any shares of Common Stock or securities
convertible into or exercisable or exchangeable for Common Stock (including, without limitation,
shares of Common Stock or any such securities which may be deemed to be beneficially owned by the
undersigned in accordance with the rules and regulations promulgated under the Securities Act of
1933, as the same may be amended or supplemented from time to time (such shares or securities, the
“Beneficially Owned Shares”)), (ii) enter into any swap, hedge or other agreement or arrangement
that transfers in whole or in part, the economic risk of ownership of any Beneficially Owned
Shares, Common Stock or securities convertible into or exercisable or exchangeable for Common
Stock, or (iii) engage in any short selling of any Beneficially Owned Shares, Common Stock or
securities convertible into or exercisable or exchangeable for Common Stock. The foregoing
sentence shall not apply to (a) transactions relating to any Beneficially Owned Shares, Common
Stock or securities convertible into or exercisable or exchangeable for Common Stock acquired from
the Company in open market transactions or any sales pursuant to 10b5-1 plans in existence as of
the date hereof in accordance with the terms of such plans, (b) transfers of any Beneficially Owned
Shares, Common Stock or securities convertible into or exercisable or exchangeable for Common Stock
as a bona fide gift or pledge, (c) in the case of a natural person, transfers of any Beneficially
Owned Shares, Common Stock or securities convertible into or exercisable or exchangeable for Common
Stock by will or intestate succession or to any trust or partnership for the direct or indirect
benefit of the undersigned or any member of the immediate family of the undersigned, (d) any
transfer in connection with the Company’s withholding of shares to cover tax payments due upon
vesting of restricted stock held by certain officers of the Company, (e) the “net” exercise of
outstanding options or warrants to purchase Common Stock in accordance with their terms, or (f)
transfers pursuant to a sale or an offer to purchase 100% of the outstanding Common Stock, whether
pursuant to a merger, tender offer or otherwise, to a third party or group of third parties;
provided that in the case of any transfer or distribution pursuant to clause (b) or
(c) each donee, pledgee, distributee or transferee shall sign and deliver a lock-up agreement
substantially in the form of this Agreement; and provided, further, that any Common Stock acquired
upon the net exercise of options or warrants described in clause (e) above shall be subject to the
restrictions imposed by this Agreement. For the purposes of this paragraph, “immediate family”
shall mean spouse, domestic partner, lineal descendant (including adopted children), father,
mother, brother or sister of the transferor.
If (i) the Company issues an earnings release or material news or a material event relating to
the Company occurs during the last seventeen (17) days of the lock-up period, or (ii) prior to the
expiration of the lock-up period, the Company announces that it will release earnings results
during the sixteen (16)-day period beginning on the last day of the lock-up period, the
restrictions imposed by this Agreement shall continue to apply until the expiration of the eighteen
(18)-day period beginning on the issuance of the earnings release or the occurrence of the material
news or material event.
In addition, the undersigned hereby waives, from the date hereof until the expiration of the
ninety (90) day period following the date of the Company’s final prospectus, any and all rights, if
any, to request or demand registration pursuant to the Securities Act of 1933, as amended, of any
shares of Common Stock or securities convertible into or exercisable or exchangeable for Common
Stock that are registered in the name of the undersigned or that are Beneficially Owned Shares. In
order to enable the aforesaid covenants to be enforced, the undersigned hereby consents to the
placing of legends and/or stop transfer orders with the transfer agent of the Common Stock with
respect to any shares of Common Stock, securities convertible into or exercisable or exchangeable
for Common Stock or Beneficially Owned Shares.
If (i) the Company notifies Xxxxxxx in writing that it does not intend to proceed with the
offering of Common Stock, (ii) for any reason the offering of Common Stock is terminated prior to
the payment for and delivery of the Common Stock, (iii) the offering of Common Stock shall not have
been completed by July 17, 2009, or (iv) the undersigned ceases to serve as an officer or director
of the Company, then upon the occurrence of any such event, this Agreement shall immediately be
terminated and the undersigned shall be released from its obligations hereunder.
| [Signatory] | ||||||
| By: | ||||||
| Name: | ||||||
| Title: | ||||||
2
Signature Page to Lock-Up Agreement
3
