6,061,000 Shares Common Stock ($0.001 par value per share) ENDOLOGIX, INC. PLACEMENT AGENCY AGREEMENT
Exhibit 1.1
6,061,000 Shares
Common Stock
($0.001 par value per share)
Common Stock
($0.001 par value per share)
ENDOLOGIX, INC.
May 31, 2006
Canaccord Xxxxx Inc.
00 Xxxx Xxxxxx, 00xx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
00 Xxxx Xxxxxx, 00xx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Ladies and Gentlemen:
Endologix, Inc., a Delaware corporation (the “Company”), proposes, subject to the terms and
conditions stated herein, to issue and sell to certain investors (collectively, the “Investors”) up
to an aggregate of 6,061,000 shares (the “Shares”) of the Company’s Common Stock, par value $0.001
per share (the “Common Stock”). The Company desires to engage Canaccord Xxxxx Inc. as its exclusive
placement agent (the “Placement Agent”) in connection with the issuance and sale of the Shares. The
Shares are described more fully in the Prospectus that is referred to below.
The Company confirms its agreements with the Placement Agent as follows:
1. Agreement to Act as Placement Agent.
(a) On the basis of the representations, warranties and agreements of the Company herein
contained and subject to all of the terms and conditions of this Agreement, the Company engages the
Placement Agent to act as its exclusive placement agent in connection with the issuance and sale of
the Shares and the Placement Agent hereby agrees, as an agent of the Company, to use its
commercially reasonable efforts to solicit offers to purchase the Shares upon the terms and
conditions set forth in the Prospectus (as defined below). Prior to the earlier of (i) the date on
which this Agreement is terminated and (ii) the Closing Date (as defined below), the Company shall
not, without the prior consent of the Placement Agent, solicit or accept offers to purchase Common
Stock (other than pursuant to the exercise of options or warrants to purchase shares of Common
Stock that are outstanding as of the date hereof) otherwise than through the Placement Agent in
accordance herewith.
(b) As compensation for the services rendered hereunder, on the Closing Date (as defined
below), the Company shall pay to the Placement Agent, by wire transfer of immediately available
U.S. funds payable to the order of the Placement Agent, to an account or accounts designated by the
Placement Agent, an amount equal to 5.8% of the aggregate gross proceeds received by the Company
from the sale of the Shares (the “Fee”). The Placement Agent may, in its discretion, retain other
brokers or dealers to act as sub-agents on the Placement Agent’s behalf in connection with the
offering of the Shares, provided that the Company shall not be obligated to pay any additional
amounts to the Placement Agent or any such sub-agent with respect thereto.
(c) This Agreement shall not give rise to a commitment by the Placement Agent or any of its
affiliates to underwrite or purchase any of the Shares or otherwise provide any financing, and the
Placement Agent shall have no authority to bind the Company in respect of the sale of any Shares.
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. The sale of the Shares shall be made pursuant to one or more purchase
agreements in substantially the form attached hereto as Exhibit A (the “Purchase
Agreements”).
2. Delivery and Payment. Subject to the terms and conditions hereof, delivery of the Shares shall
be made by the Company to the Investors, and payment of the purchase price shall be made by the
Investors, in accordance with the Purchase Agreements.
3. Representations and Warranties of the Company. The Company represents, warrants and covenants to
the Placement Agent that:
(a) The Company meets the requirements for the use of Form S-3 for a sale of the Shares by the
Company, a registration statement (Registration No. 333-133598) on Form S-3 relating to the Shares
being offered by the Company, including a base prospectus relating to the Shares being offered by
the Company (the “Base Prospectus”) and such amendments thereof as may have been required to the
date of this Agreement, has been prepared by the Company under the provisions of the Securities Act
of 1933, as amended (the “1933 Act”), and the rules and regulations (collectively referred to as
the “Rules and Regulations”) of the Securities and Exchange Commission (the “SEC”) thereunder, and
has been filed with and has been declared effective by the SEC, and the offering of the Shares by
the Company complies with Rule 415 under the 1933 Act. A final prospectus supplement to the Base
Prospectus relating to the Shares being offered by the Company and the offering thereof will be
filed promptly by the Company with the SEC in accordance with Rule 424(b) of the Rules and
Regulations. Such registration statement at any given time, including the 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, and any registration statement
relating to the offering of Shares by the Company contemplated by this Agreement and filed pursuant
to Rule 462(b) of the Rules and Regulations, is herein called the “Registration Statement.” The
term “Prospectus Supplement” means the final prospectus supplement to the Base Prospectus relating
to the Shares being offered by the Company and the offering thereof as first filed with the SEC
pursuant to Rule 424(b) of the Rules and Regulations. The term “Prospectus” means the Base
Prospectus together with 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) of the Rules and Regulations, the term “Prospectus” shall mean the Base Prospectus
as so amended or supplemented and as supplemented by the Prospectus Supplement. Any reference
herein to the Registration Statement, the Base 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, 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 “1934 Act”), after the time the Registration Statement initially became
effective (the “Effective Date”), the date of any preliminary prospectus or the date of the
Prospectus, as the case may be, and deemed to be incorporated therein by reference. The term
“Issuer Free Writing Prospectus” means an “issuer free writing prospectus” as defined in Rule 433
of the Rules and Regulations.
(b) The Registration Statement and any prospectus included therein, including the Prospectus,
at the time of filing, complied in all material respects with the requirements of the 1933 Act and
the 1934 Act and the Rules and Regulations and none of such Registration Statement or any
prospectus, including the Prospectus, contain or contained any untrue statement of a material fact
or omitted to state a material fact required to be stated therein or necessary in order to make the
statements therein, in the case of any prospectus in the light of the circumstances under which
they were made, not misleading.
(c) The Company has been duly incorporated and is validly existing as a corporation in good
standing under the laws of the State of Delaware, with full power and authority (corporate and
otherwise) to own its properties and conduct its business as described in the Prospectus, and has
been duly qualified as a foreign corporation for the transaction of business and is in good
standing under the laws of each other jurisdiction in which it owns or leases properties or
conducts any business so as to require such qualification, except where the failure to be so
qualified or in good standing would not result in a Material Adverse Effect (as defined below).
(d) The Company has the full corporate power and authority to enter into and to consummate the
transactions contemplated by each of the Transaction Documents (as defined below) and otherwise to
carry out its obligations hereunder and thereunder. The execution and delivery of each of the
Transaction Documents by the Company and the consummation by it of the transactions contemplated
hereby and thereby have been duly authorized by all necessary action on the part of the Company and
no further consent or action is required by the Company, its Board
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of Directors or its stockholders. Each of the Transaction Documents has been (or upon delivery
will be) duly executed by the Company and is, or when delivered in accordance with the terms
hereof, will constitute, the valid and binding obligation of the Company enforceable against the
Company in accordance with its terms, except as such enforceability may be limited by applicable
(i) bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or similar laws in
effect which affect creditors’ rights generally, or (ii) laws relating to the availability of
specific performance, injunctive relief or other equitable remedies. The execution, delivery and
performance of the Transaction Documents by the Company and the consummation by the Company of the
transactions contemplated hereby and thereby do not and will not: (i) conflict with or violate any
provision of the Company’s certificate of incorporation, bylaws or other organizational or charter
documents as of the date of execution of this Agreement, or (ii) subject to obtaining the Required
Approvals (as defined below), conflict with, breach, or constitute a default (or an event that with
notice or lapse of time or both would become a default) under, or give to others any rights of
termination, amendment, acceleration or cancellation (with or without notice, lapse of time or
both) of, any agreement, mortgage, indenture, credit facility, debt or other instrument (evidencing
a Company debt or otherwise) or other understanding to which the Company is a party or by which any
property or asset of the Company is bound or affected, or (iii) result in a violation of any law,
rule, regulation, order, judgment, injunction, decree or other restriction of any court or
governmental authority to which the Company is subject (including federal and state securities laws
and regulations), or by which any property or asset of the Company is bound or affected; except in
the case of each of clauses (ii) and (iii), such as could not, individually or in the aggregate:
(a) adversely affect the legality, validity or enforceability of this Agreement and any other
documents or agreements executed in connection with the transactions contemplated hereunder
(collectively, the “Transaction Documents”), (b) could reasonably be expected to have or result in
a material adverse effect on the results of operations, assets, business, management, operations or
financial condition of the Company, or (c) adversely impair the Company’s ability to perform fully
on a timely basis its obligations under any of the Transaction Documents (any of foregoing clauses
(a), (b) or (c), a “Material Adverse Effect”).
(e) Neither the Company nor any of its subsidiaries is in violation of its Certificate of
Incorporation or Bylaws (or similar organizational documents) or in default in the performance or
observance of any material obligation, agreement, covenant or condition contained in any agreement,
mortgage, indenture, credit facility, debt or other instrument (evidencing a Company debt or
otherwise) or other understanding to which the Company or any of its subsidiaries is a party or by
which any property or asset of the Company or any of its subsidiaries is bound or affected.
(f) The Company is not required to obtain any consent, approval, waiver, authorization or
order of, give any notice to, or make any filing or registration with, or qualification of, any
court or other federal, state, local or other governmental authority or other Person in connection
with the execution, delivery and performance by the Company of the Transaction Documents, other
than (i) the filings of a Form 8-K disclosing the transaction contemplated hereby, (ii) the filing
with the SEC of the Prospectus Supplement, (iii) the filing of a notification form for the listing
of additional securities to The Nasdaq National Market (the “Principal Market”) for the listing of
the Shares for trading thereon in the time and manner required thereby, and (iv) applicable Blue
Sky filings (collectively, the “Required Approvals”). “Person” means an individual or corporation,
partnership, trust, incorporated or unincorporated association, joint venture, limited liability
company, joint stock company, government (or an agency or subdivision thereof) or other entity of
any kind.
(g) There are no contracts or other documents required to be described in the Registration
Statement or to be filed as exhibits to the Registration Statement by the 1933 Act or by the Rules
and Regulations which have not been described in, filed as exhibits to, or incorporated by
reference in the Registration Statement, as required. The contracts so described in the Prospectus
to which the Company or any of its subsidiaries is a party have been duly authorized, executed and
delivered by the Company or its subsidiaries, constitute valid and binding agreements of the
Company or its subsidiaries (as applicable) and are enforceable against the Company or its
subsidiaries (as applicable) in accordance with their respective terms, except as such
enforceability may be limited by (i) bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance or similar laws in effect which affect creditors’ rights generally, or (ii) laws
relating to the availability of specific performance, injunctive relief or other equitable
remedies, and, to the Company’s knowledge, such contracts are enforceable in accordance with their
respective terms by the Company against the other parties thereto, except as such enforceability
may be limited by (x) bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or
similar laws in effect which affect creditors’ rights generally, or (y) laws relating to the
availability of specific performance, injunctive relief or other
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equitable remedies, and such contracts are in full force and effect on the date hereof.
Neither the Company nor any of its subsidiaries, nor, to the best of the Company’s knowledge, any
other party thereto, is in breach of or default under any of such contracts, except for such
breaches or defaults that will not result in a Material Adverse Effect.
(h) As of May 30, 2006, the authorized capital stock of the Company consists of (a) 60,000,000
shares of Common Stock, par value $0.001 per share, of which 36,538,364 shares are issued and
outstanding, 3,119,341 shares are reserved for issuance upon exercise of stock options outstanding
under the Company’s employee and director stock option plans 2,244,612 shares are reserved for
grants of rights to purchase under the Company’s employee and director stock option plans, 348,136
shares are reserved for issuance pursuant to the Company’s employee stock purchase plan. All the
issued shares of capital stock of the Company have been duly and validly authorized and issued, are
fully paid and non-assessable and conform to the descriptions thereof incorporated by reference in
the Prospectus. 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 and conform to the descriptions
thereof incorporated by reference in the Prospectus. All of the issued shares of capital stock of
each subsidiary of the Company (i) have been duly and validly authorized and issued, are fully paid
and non-assessable and (ii) except as disclosed in the Prospectus, are owned directly by the
Company, free and clear of all liens, encumbrances, equities or claims. Except as disclosed in
this Section 3(h) and except for the transactions contemplated by this Agreement, neither the
Company nor any subsidiary has outstanding any options to purchase, or any preemptive rights or
other rights to subscribe for or to purchase any securities or obligations convertible into, or any
contracts or commitments to issue or sell, shares of its capital stock or any such options, rights,
convertible securities or obligations. The description of the Company’s stock option and stock
purchase plans and the options or other rights granted and exercised thereunder incorporated by
reference in the Prospectus accurately and fairly presents in all material respects the information
required by the 1933 Act and the published rules and regulations of the SEC thereunder to be shown
with respect to such plans, options and rights.
(i) Except as disclosed in the Prospectus, there are no legal or governmental actions, suits
or proceedings pending or, to the best of the Company’s knowledge, threatened to which the Company
or any of its subsidiaries is or may be a party or of which property owned or leased by the Company
or any of its subsidiaries is or may be the subject, or related to environmental or discrimination
matters, which actions, suits or proceedings, would reasonably be expected, individually or in the
aggregate, to prevent or adversely affect the transactions contemplated by the Transaction
Documents or have a Material Adverse Effect. No labor disturbance by the employees of the Company
or any of its subsidiaries exists or, to the knowledge of the Company, is imminent that would
reasonably be expected to have a Material Adverse Effect. Neither the Company nor any of its
subsidiaries is a party or subject to the provisions of any material injunction, judgment, decree
or order of any court, regulatory body, administrative agency or other governmental body, that
would reasonably be expected to have a Material Adverse Effect.
(j) The Company owns, or possesses sufficient rights in and/or has been granted valid and
enforceable licenses for, all registered patents, patent applications, trademarks, trademark
applications, tradenames, servicemarks and copyrights necessary to the conduct of its business as
such business is described in the Prospectus (collectively, the “Registered Intellectual
Property”). The expected expiration of any of the Company’s rights to the Registered Intellectual
Property would not, singly or in the aggregate, reasonably be expected to have a Material Adverse
Effect. The Company has no knowledge of any infringement or misappropriation by third parties of
any of the Registered Intellectual Property, or any material inventions, manufacturing processes,
formulae, trade secrets, know-how, unregistered trademarks, and other intangible property and
assets necessary to the conduct of its business as such business is described in the Prospectus
(collectively, the “Other Intellectual Property,” and together with the Registered Intellectual
Property, the “Intellectual Property”), nor is there any pending or, to the best knowledge of the
Company, threatened action, suit, proceeding or claim by others challenging the Company’s rights of
title or other interest in or to any Intellectual Property. There is no pending or, to the best
knowledge of the Company, threatened action, suit, proceeding or claim by others challenging the
validity and scope of any Intellectual Property. There is no pending or, to the best knowledge of
the Company, threatened action, suit, proceeding or claim by others that the Company or any of its
products or processes or the Intellectual Property infringe or otherwise violate any patent,
trademark, servicemark, copyright, trade secret or other proprietary right of others. There is no
pending or, to the best knowledge of the Company, threatened action, suit proceeding or claim by
any current or former employee, consultant or agent of the Company seeking either ownership rights
to any invention or other intellectual property right or compensation from the Company for any
invention or other intellectual property right made by such employee, consultant or agent in the
course of his/her employment with the Company or otherwise. The Prospectus fairly and accurately describes in all material respects the Company’s rights with
respect to the Intellectual Property.
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(k) The Company and its subsidiaries have good and marketable title to all tangible properties
and assets described in the Prospectus as owned by it, in each case free and clear of all liens,
charges, claims, encumbrances or restrictions, except such as (i) are described in the Prospectus
or (ii) do not 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 and its subsidiaries. Any real property
and buildings held under lease by the Company and its subsidiaries are held by them under valid,
subsisting and enforceable leases with such exceptions as are not material and do not interfere
with the use made and proposed to be made of such property and buildings by the Company and its
subsidiaries. The Company and its subsidiaries own or lease all such properties as are necessary to
its operations as now conducted or as proposed to be conducted, except where the failure to so own
or lease would not have a Material Adverse Effect.
(l) The Company and its subsidiaries possess all licenses, certificates, authorizations or
permits issued by the appropriate governmental or regulatory agencies or authorities that are
necessary to enable them to own, lease and operate their respective properties and to carry on
their respective businesses as presently conducted (including those that may be required by the U.
S. Food and Drug Administration (the “FDA”), any agency of any foreign government and any other
foreign regulatory authority exercising authority comparable to that of the FDA (including any
non-governmental entity whose approval or authorization is required under foreign law comparable to
that administered by the FDA), except where the failure to possess such licenses, certificates,
authorization or permits would not reasonably be expected to have a Material Adverse Effect.
Neither the Company nor any of its subsidiaries has received any notice of proceedings relating to
the revocation or modification of any such license, certificate, authority or permit which, singly
or in the aggregate, would reasonably be expected to have a Material Adverse Effect.
(m) Each of the Company and its subsidiaries maintains insurance of the types and in the
amounts which it deems adequate for its business, including, but not limited to, product liability
insurance and insurance covering real and personal property owned or leased by the Company and its
subsidiaries against theft, damage, destruction, acts of vandalism and all other risks customarily
insured against, all of which insurance is in full force and effect.
(n) Neither the Company nor any of its subsidiaries has sustained since the date of the latest
audited financial statements incorporated by reference in the Prospectus 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, that is in
each case material to the Company and its subsidiaries taken as a whole, otherwise than as set
forth in the Prospectus. Since the respective dates as of which information is given in the
Registration Statement, the Prospectus and the Prospectus Supplement, (i) there has not been any
change in the capital stock or long-term debt of the Company or any of its subsidiaries or any
Material Adverse Effect, and (ii) the Company or its subsidiaries have not entered into material
transaction or incurred any material obligation outside of the ordinary course of business,
otherwise than as set forth, or incorporated by reference, in the Prospectus and the Prospectus
Supplement.
(o) The Shares that are being purchased hereunder are duly authorized and, when issued and
paid for in accordance with the applicable Transaction Documents, will be duly and validly issued,
fully paid and nonassessable, free and clear of all liens and will conform to the description of
the Common Stock incorporated by reference in the Prospectus. No preemptive rights or other rights
to subscribe for or purchase exist with respect to the issuance and sale of the Shares by the
Company pursuant to the Transaction Documents and no stockholder of the Company has any right,
which has not been waived, to require the Company to register the sale of any shares of capital
stock owned by such stockholder under the 1933 Act in the public offering contemplated by this
Agreement. No further approval or authority of the stockholders or the Board of Directors of the
Company will be required for the issuance and sale of the Shares to be sold by the Company as
contemplated by the Transaction Documents.
(p) The issuance by the Company of the Shares has been registered under the 1933 Act and all
of the Shares are freely transferable and tradable by the Investors without restriction. The
Registration Statement and the Prospectus, including all documents incorporated by reference to the
Registration Statement and Prospectus, each in the form heretofore delivered to the Placement
Agent, is effective and available for the issuance of the Shares thereunder and the Company has not
received any notice that the SEC has issued or intends to issue a stop-order with respect to the
5
Registration Statement or the Prospectus or that the SEC otherwise has suspended or withdrawn
the effectiveness of the Registration Statement, either temporarily or permanently, or has
threatened to do so. No other document with respect to the Registration Statement or document
incorporated by reference in the Registration Statement or Prospectus Supplement has heretofore
been filed with the SEC. The “Plan of Distribution” section under the Registration Statement and
the Supplement permits the issuance and sale of the Shares hereunder. The description of the
Company’s capital stock incorporated by reference into the Prospectus, insofar as it purports to
constitute a summary of the terms of the Common Stock, is accurate, complete and fair. Upon
receipt of the Shares, the Investors will have good and marketable title to the Shares free and
clear of any liens or encumbrances except those incurred by the Investors.
(q) Neither the Company, nor any of its Affiliates, nor any Person acting on its or their
behalf has, directly or indirectly, made any offers or sales of any security or solicited any
offers to buy any security, under circumstances that would cause this offering of the Shares to be
integrated with prior offerings by the Company for purposes of any applicable stockholder approval
provisions, including, without limitation, under the rules and regulations of any exchange or
automated quotation system on which any of the securities of the Company are listed or designated,
nor will the Company take any action or steps that would cause the offering of the Shares to be
integrated with other offerings. Except as disclosed in the SEC Reports, the Company has not, in
the 12 months preceding the date hereof, received notice from the Principal Market on which the
Common Stock is or has been listed or quoted to the effect that the Company is not in compliance
with the listing or maintenance requirements of the Principal Market. The Company is, and has no
reason to believe that it will not in the foreseeable future continue to be, in compliance with all
such listing and maintenance requirements. The issuance and sale of the Shares hereunder does not
contravene the rules and regulations of the Principal Market and no stockholder approval is
required for the Company to fulfill its obligations under the Transaction Documents. The Common
Stock has been registered pursuant to Section 12(g) of the 1934 Act and is currently listed on the
Principal Market.
(r) The Company has filed all reports required to be filed by it under the 1934 Act, including
pursuant to Section 13(a) or 15(d) thereof, for the three (3) years preceding the filing date of
the Registration Statement and for the three (3) year period preceding the date hereof (the
foregoing materials being collectively referred to herein as the “SEC Reports”) on a timely basis
or has received a valid extension of such time of filing and has filed any such SEC Reports prior
to the expiration of any such extension. As of their respective dates, the SEC Reports complied in
all material respects with the requirements of the 1934 Act and the rules and regulations of the
SEC promulgated thereunder, and none of the SEC Reports, when filed, contained any untrue statement
of a material fact or omitted 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 under which they were
made, not misleading.
(s) The Company is in material compliance with the Xxxxxxxx-Xxxxx Act of 2002, and the rules
and regulations promulgated thereunder by all government and regulatory authorities and agencies.
The Company maintains a system of internal accounting controls sufficient to provide reasonable
assurance that (i) transactions are executed in accordance with management’s general or specific
authorizations, (ii) transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles in the United States 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 the existing assets at reasonable intervals and appropriate action is taken with
respect thereto. The Company has established and maintains and evaluates “disclosure controls and
procedures” (as such term is defined in Rule 13a-15 and Rule 15d-15 under the 0000 Xxx) and
“internal control over financial reporting” (as such term is defined in Rule 13a-15 and Rule 15d-15
under the 1934 Act). Such disclosure controls and procedures are designed to ensure that material
information relating to the Company, including its consolidated subsidiaries, is made know to the
Company’s Chief Executive Officer and Chief Financial Officer by others within those entities, and
such disclosure controls and procedures are effective to perform the functions for which they were
established.
(t) The financial statements of the Company included in the SEC Reports comply in all material
respects with applicable accounting requirements and the rules and regulations of the SEC with
respect thereto as in effect at the time of filing. Such financial statements have been prepared in
accordance with generally accepted accounting principles applied on a consistent basis, as
certified by the Company’s independent public accountants (with respect to the Company’s audited
financial statements), during the periods involved (“GAAP”), except as may be otherwise specified
in such financial statements or the notes thereto, and fairly present in all material respects the
financial
6
position of the Company as of and for the dates thereof and the results of operations and cash
flows for the periods then ended, subject, in the case of unaudited statements, to normal,
immaterial, year-end audit adjustments. PricewaterhouseCoopers LLP, who has audited certain
financial statements of the Company, are independent public accountants as required by the 1933 Act
and the rules and regulations of the SEC thereunder and have been appointed by the Company’s audit
committee and such audit committee is comprised entirely of independent directors of the Board of
Directors of the Company.
(u) Since the date of the latest audited financial statements included within the SEC Reports,
except as specifically disclosed in the SEC Reports: (i) there has been no event, occurrence or
development that, individually or in the aggregate, has had or that could result in a Material
Adverse Effect, (ii) the Company has not incurred any liabilities (contingent or otherwise) other
than (A) trade payables and accrued expenses incurred in the ordinary course of business consistent
with past practice and (B) liabilities not required to be reflected in the Company’s financial
statements pursuant to GAAP or required to be disclosed in filings made with the SEC, (iii) the
Company has not altered its method of accounting or the identity of its auditors, (iv) the Company
has not declared or made any dividend or distribution of cash or other property to its stockholders
or purchased, redeemed or made any agreements to purchase or redeem any shares of its capital
stock, and (v) the Company has not issued any equity securities to any officer, director or
Affiliate, except pursuant to existing Company stock option and purchase plans. “Affiliate” means
any Person that, directly or indirectly through one or more intermediaries, controls or is
controlled by or is under common control with a Person, as such terms are used in and construed
under Rule 144. “Rule 144” means Rule 144 promulgated by the SEC pursuant to the 1933 Act, as such
Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the
SEC having substantially the same effect as such Rule.
(v) As the time of filing of the Registration Statement, the Company was not, and the Company
on the date of this Agreement is not, an “ineligible issuer” as defined in Rule 405 under the Act.
(w) Without the prior consent of the Placement Agent, the Company 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 under the Act.
(x) The Company will comply with the requirements of Rules 164 and 433 under the 1933 Act
applicable to any Free Writing Prospectus, including timely filing with the SEC or retention where
required and legending.
(y) Neither the Company, nor any director or officer thereof, is or has been the subject of
any action involving a claim of violation of or liability under federal or state securities laws or
a claim of breach of fiduciary duty, or any criminal statute during the term of such director or
officer’s tenure with the Company, nor, to the knowledge of the Company, prior to such tenure that
is of a nature that would be required to be disclosed in the Company’s SEC Reports pursuant to Item
103 of Regulation S-K with regard to the Company or Item 401 of Regulation S-K with regard to the
Company’s officer’s or directors. There has not been, and to the knowledge of the Company, there is
not pending or contemplated, any investigation by the SEC involving the Company. The SEC has not
issued any stop order or other order suspending the effectiveness of any registration statement
filed by the Company under the 1934 Act or the 1933 Act.
(z) The Company is not an “investment company” or an “affiliated person” of, or “promoter” or
“principal underwriter” for, an “investment company”, as such terms are defined in the Investment
Company Act of 1940, as amended (the “Investment Company Act”).
(aa) The Company has not, and to its knowledge no one acting on its behalf has, (i) taken,
directly or indirectly, any action designed to cause or to result in the stabilization or
manipulation of the price of any security of the Company to facilitate the sale or resale of any of
the Shares, (ii) sold, bid for, purchased, or, paid any compensation for soliciting purchases of,
any of the Shares (other than for the placement agent’s placement of the Shares), or (iii) paid or
agreed to pay to any person any compensation for soliciting another to purchase any other
securities of the Company.
7
4. Agreements of the Company. The Company covenants and agrees with the Placement Agent as follows:
(a) The Company will not, during such period as the Prospectus is required by law to be
delivered in connection with sales of the Shares or a dealer, file any amendment or supplement to
the Registration Statement, any Issuer Free Writing Prospectus or the Prospectus, unless a copy
thereof shall first have been submitted to the Placement Agent within a reasonable period of time
prior to the filing thereof (to the extent practicable) and the Placement Agent shall not have
objected thereto in good faith.
(b) Until the earlier of the completion of the offering contemplated by this Agreement or the
termination of this Agreement, the Company will notify the Placement Agent promptly, and will
confirm such advice in writing, (i) when any post-effective amendment to the Registration Statement
becomes effective, (ii) of any request by the SEC for amendments or supplements to the Registration
Statement or the Prospectus or for additional information, (iii) of the issuance by the SEC of any
stop order suspending the effectiveness of the Registration Statement or the initiation of any
proceedings for that purpose or the threat thereof, (iv) of the happening of any event during the
period mentioned in the second sentence of Section 4(e) that in the judgment of the Company makes
any statement made in the Registration Statement, any Issuer Free Writing Prospectus or the
Prospectus untrue or that requires the making of any changes in the Registration Statement or the
Prospectus in order to make the statements therein, in the light of the circumstances in which they
are made, not misleading, and (v) of receipt by the Company or any representative or attorney of
the Company of any other communication from the SEC relating to the Company, the Registration
Statement, any preliminary prospectus or the Prospectus or any Issuer Free Writing Prospectus.
Upon the Placement Agent’s request, prepare and furnish as many copies as the Placement Agent may
from time to time reasonably request or an amended Prospectus or a supplement to the Prospectus
that will correct any misstatements or omissions. If at any time the SEC shall issue any order
suspending the effectiveness of the Registration Statement, the Company will make every reasonable
effort to obtain the withdrawal of such order at the earliest possible moment. If the Company has
omitted any information from the Registration Statement pursuant to Rule 430A of the Rules and
Regulations promulgated under the 1933 Act, the Company will comply with the provisions of and make
all requisite filings with the SEC pursuant to said Rule 430A and notify the Placement Agent
promptly of all such filings. If the Company elects to rely upon Rule 462(b) under the Act, the
Company shall file a registration statement under Rule 462(b) with the SEC in compliance with Rule
462(b) by 10:00 P.M., Eastern Standard Time, on the date of this Agreement, and the Company shall
at the time of filing either pay to the SEC the filing fee for such Rule 462(b) registration
statement or give irrevocable instructions for the payment of such fee pursuant to the Rules and
Regulations.
(c) If requested by the Placement Agent, the Company will furnish to the Placement Agent,
without charge, a copy of one signed copy of each of the Registration Statement and of any
post-effective amendment thereto, including financial statements and schedules, and all exhibits
thereto and will furnish to such Placement Agent, without charge, a copy of the Registration
Statement and any pre-or post-effective amendment thereto, including financial statements and
schedules but without exhibits.
(d) The Company will comply with all the provisions of any undertakings contained in the
Registration Statement.
(e) From time to time, the Company will deliver to the Placement Agent, without charge, as
many copies of the Prospectus or any amendment or supplement thereto 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, both in connection with the offering or sale of the
Shares and for any period of time thereafter during which the Prospectus is required by law to be
delivered in connection therewith. If during such period of time any event shall occur that in the
judgment of the Company or counsel to the Placement Agent should be set forth in the Prospectus in
order to make any statement therein, in the light of the circumstances under which it was made, not
misleading, or if it is necessary to supplement or amend the Prospectus to comply with law, the
Company will forthwith prepare and duly file with the SEC an appropriate supplement or amendment
thereto, and will deliver to the Placement Agent, without charge, such number of copies of such
supplement or amendment to the Prospectus as the Placement Agent may reasonably request.
(f) Prior to any public offering of the Shares, the Company will cooperate with the Placement
Agent and counsel to the Placement Agent in connection with the registration or qualification of
the Shares for offer and sale under the securities or Blue Sky laws of such jurisdictions as the
Placement Agent may request; provided, that in no event shall the Company be obligated to qualify
to do business in any jurisdiction where it is not now so qualified or
8
to take any action that would subject it to general service of process in any jurisdiction
where it is not now so subject.
(g) The Company will, so long as required under the Rules and Regulations, furnish to its
stockholders as soon as practicable after the end of each fiscal year an annual report (including a
balance sheet and statements of income, stockholders’ equity and cash flow of the Company and its
consolidated subsidiary(ies), if any, certified by independent public accountants) and, as soon as
practicable after the end of each of the first three quarters of each fiscal year (beginning with
the fiscal quarter ending after the effective date of the Registration Statement), consolidated
summary financial information of the Company and its subsidiary(ies), if any, for such quarter in
reasonable detail.
(h) During the period of two years commencing on the date hereof, if requested by the
Placement Agent, the Company will furnish to such Placement Agent copies of such financial
statements and other periodic and special reports as the Company may from time to time distribute
generally to the holders of any class of its capital stock, and will furnish to such Placement
Agent a copy of each annual or other report it shall be required to file with the SEC, the
Principal Market, the NASD or any national securities exchange on which any class of securities of
the Company is listed.
(i) If required by the Rules and Regulations, the Company will make generally available to
holders of its securities as soon as may be practicable, but in no event later than the
Availability Date (as defined below), an earning statement (which need not be audited but shall be
in reasonable detail) covering a period of 12 months commencing after the Effective Date that will
satisfy the provisions of Section 11(a) of the 1933 Act (including Rule 158 of the Rules and
Regulations). For the purpose of the preceding sentence, “Availability Date” means the 45th day
after the end of the fourth fiscal quarter following the fiscal quarter that includes such
Effective Date, except that if such fourth fiscal quarter is the last quarter of the Company’s
fiscal year, “Availability Date” means the 90th day after the end of such fourth fiscal quarter.
(j) Whether or not the transactions contemplated by this Agreement are consummated or this
Agreement is terminated, the Company will pay or reimburse if paid by the Placement Agent all
documented costs and expenses incident to the performance of the obligations of the Company under
this Agreement and in connection with the transactions contemplated hereby, including but not
limited to costs and expenses of or relating to (i) the preparation, printing and filing of the
Registration Statement and exhibits to it, each preliminary prospectus, the Prospectus and any
amendment or supplement to any of the foregoing, (ii) the preparation and delivery of certificates
representing the Shares, (iii) furnishing (including costs of shipping and mailing) such copies of
the Registration Statement, the Prospectus and any preliminary prospectus, and all amendments and
supplements thereto, as may be requested by the Placement Agent for use in connection with the
offering and sale of the Shares, (iv) the listing of the Shares on the Principal Market, (v) any
filings required to be made by the Placement Agent or the Company with the NASD, and the reasonable
fees and disbursements of counsel for the Placement Agent in connection therewith, (vi) the
registration or qualification of the Shares for offer and sale under the securities or Blue Sky
laws of applicable jurisdictions, including the fees, disbursements and other charges of counsel to
the Placement Agent in connection therewith, and the preparation and printing of preliminary,
supplemental and final Blue Sky memoranda, not to exceed $5,000, (vii) fees, disbursements and
other charges of counsel to the Company and its independent registered public accounting firm,
(viii) the transfer agent for the Shares, and (ix) any travel expenses of the Company’s officers,
directors and employees and any other expenses of the Company in connection with attending or
hosting meetings with prospective Investors.
(k) The Company will not at any time, directly or indirectly, take any action designed or that
might reasonably be expected to cause or result in, or that will constitute, stabilization of the
price of the shares of Common Stock to facilitate the sale or resale of any of the Shares.
(l) The Company will apply the net proceeds from the offering and sale of the Shares to be
sold by the Company in the manner set forth in the Prospectus Supplement under “Use of Proceeds”
and in a manner such that the Company will not become an “investment company” as such term is
defined in the Investment Company Act of 1940.
9
5. Further Agreements.
(a) The Company represents and agrees that, without the prior written consent of the Placement
Agent, and the Placement Agent represents and agrees that, without the prior written consent of the
Company, 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.
(b) The Company shall, on or before 9:30 a.m., New York City Time, on the business day
following the date hereof, issue a press release disclosing all material terms of the transactions
contemplated hereby in compliance with applicable SEC rules. On or before 5:30 p.m., New York City
Time, on the first business day following the execution and delivery of this Agreement, the Company
shall file a Current Report on Form 8-K describing the terms of the transactions contemplated by
the Transaction Documents in the form required by the 1934 Act, and attaching the form of this
Agreement as an exhibit to such filing (including all attachments, the “8-K Filing”). The Company
shall not, and shall cause each of its officers, directors, employees and agents, not to, provide
the Placement Agent with any material, nonpublic information regarding the Company from and after
the filing of the press release referred to in the first sentence of this Section without the
express written consent of the Placement Agent. Subject to the foregoing, neither the Company nor
the Placement Agent shall issue any press releases or any other public statements with respect to
the transactions contemplated hereby nor shall the Company disclose the name of a Placement Agent
in any filing, announcement, release or otherwise without the Placement Agent’s consent; provided,
however, that the Company shall be entitled, without the prior approval of the Placement Agent, to
make any press release or other public disclosure with respect to such transactions (i) in
substantial conformity with the 8-K Filing and contemporaneously therewith and (ii) as is required
by applicable law and regulations, including the applicable rules and regulations of the Principal
Market.
(c) From the date hereof through the 90 day anniversary of the date hereof, the Company will
not, directly or indirectly, except pursuant to its existing employee and director stock and stock
option plans, and the existing direct stock purchase plan, offer, sell, grant any option to
purchase, or otherwise dispose of (or announce any offer, sale, grant or any option to purchase or
other disposition of) any of its equity or equity equivalent securities, including without
limitation any debt, preferred stock or other instrument or security that is, at any time during
its life and under any circumstances, convertible into or exchangeable or exercisable for shares of
Common Stock or Options or Convertible Securities. “Options” means any rights, warrants or options
to subscribe for or purchase shares of Common Stock or Convertible Securities. “Convertible
Securities” means any stock or securities (other than Options) convertible into or exercisable or
exchangeable for shares of Common Stock.
6. Conditions of the Issuance and Sale of the Shares and the Obligations of the Placement Agent.
The issuance and sale of the Shares pursuant to the Purchase Agreements and the obligations of the
Placement Agent hereunder are subject to the following conditions:
(a) All filings required by Rule 424 and Rule 430A of the Rules and Regulations shall have
been made. If the Company has elected to rely upon Rule 462(b), the registration statement filed
under Rule 462(b) shall have become effective by 10:00 p.m., Eastern Standard Time, on the date of
this Agreement.
(b) (i) No stop order suspending the effectiveness of the Registration Statement shall have
been issued and no proceedings for that purpose shall be pending or threatened by the SEC, (ii) no
order suspending the effectiveness of the Registration Statement or the qualification or
registration of the Shares under the securities or Blue Sky laws of any jurisdiction shall be in
effect and no proceeding for such purpose shall be pending before or threatened or contemplated by
the SEC or the authorities of any such jurisdiction, (iii) any request for additional information
on the part of the staff of the SEC or any such authorities shall have been complied with to the
satisfaction of the staff of the SEC or such authorities, (iv) after the date hereof no amendment
or supplement to the Registration Statement or the Prospectus shall have been filed unless a copy
thereof was first submitted to the Placement Agent and the Placement Agent does not object thereto
in good faith, and (v) the Placement Agent shall have received certificates, dated the Closing Date
and signed by the Chief Executive Officer and the Chief Financial Officer of the Company (who may,
as to proceedings threatened, rely upon the best of their information and belief), to the effect of
clauses (i), (ii) and (iii) of this paragraph.
(c) Each of the representations and warranties of the Company contained herein shall be true
and correct in all respects (in the case of any representation or warranty containing a materiality
or Material Adverse Effect qualification) or in all material respects (in the case of any
representation or warranty not containing a materiality or
10
Material Adverse Effect qualification) at the Closing Date and all covenants and agreements
contained herein to be performed on the part of the Company and all conditions contained herein to
be fulfilled or complied with by the Company at or prior to the closing date for the transactions
contemplated by the Transaction Documents (the “Closing Date”) shall have been duly performed,
fulfilled or complied with.
(d) The Placement Agent shall have received an opinion, dated the Closing Date, satisfactory
in form and substance to the Placement Agent and counsel for the Placement Agent, from Xxxxxxxxx
Xxxxx Xxxxxxx & Xxxxx, counsel to the Company, in the form attached hereto as Exhibit B.
(e) Each executive officer of the Company and each member of the Board of Directors of the
Company shall have executed and delivered to the Placement Agent a “lock-up” agreement in the form
attached hereto as Exhibit C.
(f) At the Closing Date, there shall be furnished to the Placement Agent a certificate, dated
the date of its delivery, executed by each of the Chief Executive Officer and the Chief Financial
Officer of the Company, in form and substance satisfactory to the Placement Agent, to the effect
that:
(i) Each of the Chief Executive Officer and Chief Financial Officer has carefully examined
the Registration Statement and the Prospectus (including any documents filed under the Exchange
Act and deemed to be incorporated by reference into the Prospectus) and (A) as of the date of
such certificate, such documents are true and correct in all material respects and do not omit
to state a material fact required to be stated therein or necessary in order to make the
statements therein not untrue or misleading and (B) in the case of the certificate delivered at
the Closing Date, since the Effective Date no event has occurred as a result of which it is
necessary to amend or supplement the Prospectus in order to make the statements therein not
untrue or misleading.
(ii) Each of the representations and warranties of the Company contained in this Agreement
was, when originally made, and is, at the time such certificate is delivered, true and correct
in all material respects.
(iii) Each of the covenants required to be performed by the Company herein on or prior to
the date of such certificate has been duly, timely and fully performed and each condition herein
required to be satisfied or fulfilled on or prior to the date of such certificate has been duly,
timely and fully satisfied or fulfilled.
(g) At the Closing Date, there shall be furnished to the Placement Agent, a certificate, dated
the date of its delivery, executed by the Secretary of the Company, in form and substance
satisfactory to the Placement Agent, certifying (i) the resolutions of the Board of Directors of
the Company adopted in connection with the transactions contemplated by this Agreement, (ii)
resolutions of the pricing committee of the Board of Directors of the Company adopted in connection
with the transactions contemplated by this Agreement, (iii) the Restated Certificate of
Incorporation of the Company, (iv) the Bylaws of the Company and (v) that an authorized officer of
the Company executed this Agreement and the Purchase Agreements.
(h) The Shares shall be qualified for sale in such jurisdictions as the Placement Agent may
reasonably request (subject to Section 4(f) hereof) and each such qualification shall be in effect
and not subject to any stop order or other proceeding on the Closing Date.
(i) 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.
(j) Prior to the Closing Date, the Company shall submit a notification form for the listing of
additional shares with the Principal Market covering the Shares. On or after the date hereof there
shall not have occurred any of the following: (i) additional material governmental restrictions,
not in force and effect on the date hereof, shall have been imposed upon trading in securities
generally or minimum or maximum prices shall have been generally established on the New York Stock
Exchange, the Nasdaq National Market, the American Stock Exchange or in the over-the-counter market
by the NASD, or trading in securities generally shall have been suspended on the New
11
York Stock Exchange, the Nasdaq National Market, the American Stock Exchange or in the over
the counter market by the NASD, or a general banking moratorium shall have been established by
federal or New York authorities, (ii) a suspension or material limitation in trading in securities
generally on the Principal Market, (iii) a suspension or material limitation in trading in the
Company’s securities on Principal Market, (iv) an outbreak of major hostilities or other national
or international calamity or any substantial change in political, financial or economic conditions
shall have occurred or shall have accelerated or escalated to such an extent, as, in the sole
judgment of the Placement Agent, to affect materially and adversely the marketability of the Shares
or (v) there shall be any action, suit or proceeding pending or threatened, or there shall have
been any development or prospective development involving particularly the business or properties
or securities of the Company or any of its subsidiaries or the transactions contemplated by this
Agreement, which, in the sole judgment of the Placement Agent, has materially and adversely
affected the Company’s business or earnings and makes it impracticable or inadvisable to consummate
the transactions contemplated by the Transaction Documents.
7. Indemnification.
(a) The Company will indemnify and hold harmless the Placement Agent, the directors, officers,
employees and agents of the Placement Agent and each person, if any, who controls any Placement
Agent within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 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 1933 Act, the 1934 Act or other federal or state statutory law
or regulation, at common law or otherwise, insofar as such losses, claims, liabilities, expenses or
damages (i) arise out of or are based on any untrue statement or alleged untrue statement of a
material fact contained in any preliminary prospectus, the Registration Statement, the Prospectus
or any amendment or supplement thereto, or any Issuer Free Writing Prospectus, “any issuer
information” filed or required to be filed pursuant to Rule 433(d) under the 1933 Act or any “road
show” (as defined in Rule 433 under the 0000 Xxx) not constituting an Issuer Free Writing
Prospectus (a “Non-Prospectus Road Show”) or the omission or alleged omission to state, in the case
of the Registration Statement, a material fact required to be stated in it or necessary to make the
statements in it not misleading, and in the case of the Prospectus, any Issuer Free Writing
Prospectus, any “issuer information” filed or required to be filed pursuant to Rule 433(d) under
the 1933 Act or a Non-Prospectus Road Show, 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, or (ii) arise out of or are based in whole or in part on 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 Investor 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 any preliminary prospectus, the Registration
Statement, the Prospectus or any Issuer Free Writing Prospectus. The Company acknowledges that the
statements set forth in the first paragraph and the first sentence of the last paragraph under the
heading “Plan of Distribution” in the Prospectus constitute the only information relating to the
Placement Agent furnished in writing to the Company by the Placement Agent expressly for inclusion
in any preliminary prospectus, the Registration Statement or the 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 Act or Section 20 of the 1934 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 1933 Act, the 1934 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 any untrue statement or alleged untrue statement
of a material fact contained in any preliminary prospectus, the Registration Statement, the
Prospectus or any amendment or supplement thereto, or any Issuer Free Writing Prospectus, “any
issuer information” filed or required to be filed pursuant to Rule 433(d) under the 1933 Act or any
Non-Prospectus Road Show or the omission or alleged omission to state, in the case of the
Registration Statement, a material fact required to be stated in it or necessary to make the
statements in it not
12
misleading, and in the case of the Prospectus, any Issuer Free Writing Prospectus, any “issuer
information” filed or required to be filed pursuant to Rule 433(d) under the 1933 Act or a
Non-Prospectus Road Show, 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 each
case to the extent, but only to the extent, that such losses, claims, liabilities, expenses or
damages arise out of or are based on any untrue statement or omission or alleged untrue statement
or omission made in reliance on and in conformity with information relating to such Placement Agent
furnished in writing to the Company by such Placement Agent expressly for use in any preliminary
prospectus, the Registration Statement, the Prospectus or any Issuer Free Writing Prospectus. The
Company acknowledges that the statements set forth in the first paragraph and the first sentence of
the last paragraph under the heading “Plan of Distribution” in the Prospectus constitute 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 Prospectus
or any Issuer Free Writing Prospectus. This indemnity will be in addition to any liability that the
Placement Agent might otherwise have. Notwithstanding the foregoing, in no case shall a Placement
Agent’s total liability under this Section 7(b) exceed the amount of the Fee received by such
Placement Agent pursuant to this Agreement.
(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. 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 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. 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 or compromise of, or consent to the entry of judgment with respect to, any
pending or threatened action or claim in respect of which any indemnified party is or could have
been a party and indemnity or contribution could have been sought hereunder by such indemnified
party unless such settlement, compromise or judgment (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
13
the Company within the meaning of the 1933 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 (or
actions in respect thereof) 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 other than the Fee) received by the Company bear to the total 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 relative intent of the parties and their
relative knowledge, access to information and opportunity to correct or prevent such statement or
omission. The Company and the Placement Agent agree that it would not be just and equitable if
contributions pursuant to this Section 7(d) were to be determined by pro rata allocation or by any
other method of allocation 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 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 0000 Xxx)
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 1933 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 Investors of any of the Shares and payment therefor, or
(iii) any termination of this Agreement.
8. Notices. Notice given pursuant to any of the provisions of this Agreement shall be in writing
and, unless otherwise specified, shall be mailed or delivered (a) if to the Company, at the office
of the Company, 11 Studebaker, Xxxxxx, Xxxxxxxxxx 00000, Attention: Chief Financial Officer, with a
copy to Xxxxxxxx Xxxx, Xxxxxxxxx Xxxxx Xxxxxxx & Xxxxx, 000 Xxxxxxx Xxxxxx Xxxxx, Xxxxx 0000,
Xxxxxxx Xxxxx, XX 00000, or (b) if to the Placement Agent, at the offices of Canaccord Xxxxx Inc.,
00 Xxxx Xxxxxx, 00xx Xxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, Attention: General Counsel,
with a copy to Xxxxxx X. Mo, Esq., Xxxxxx Xxxxxx Xxxxxxxxx Xxxx and Xxxx LLP, 0000 Xxxxxxxxxx
Xxxxxx, Xxxx Xxxx, XX 00000. Any such notice shall be effective only upon receipt. Any notice under
Section 8 may be made by facsimile or telephone, but if so made shall be subsequently confirmed in
writing.
9. 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 Purchase 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 Investors, (ii) the Placement Agent has not assumed an 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
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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.
10. Miscellaneous.
(a) This Agreement has been and is made solely for the benefit of the Placement Agent, the
Company, and the controlling persons, directors and officers referred to in Section 7, and their
respective successors and assigns, and no other person shall acquire or have any right under or by
virtue of this Agreement.
(b) This Agreement supersedes all prior agreements and understandings (whether written or
oral) between the Company and the Placement Agent with respect to the subject matter hereof.
(c) The obligations of the Placement Agent hereunder may be terminated by the Placement Agent,
in its sole discretion, by notice given to the Company prior to the payment and delivery of the
Shares if, prior to such time, (i) any of the events described in Sections 6(b)(i), 6(b)(ii), or
6(h) have occurred and/or (ii) the Shares shall have not been qualified for sale in such
jurisdictions as the Placement Agent may reasonably request (subject to Section 4(f) hereof) and
each such qualification shall not be in effect and subject to any stop order or other proceeding on
the Closing Date.
(d) This Agreement shall be governed by and construed in accordance with the laws of the State
of New York applicable to contracts made and to be performed entirely within such State.
(e) This Agreement may be signed in two or more counterparts with the same effect as if the
signatures thereto and hereto were upon the same instrument.
(f) In case any provision in this Agreement shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.
(g) Each of the Company and the Placement Agent hereby waives any right it may have to a trial
by jury in respect of any claim based upon or arising out of this Agreement or the transactions
contemplated hereby.
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Please confirm that the foregoing correctly sets forth the agreement between the Company and
the Placement Agent.
| Very truly yours, | ||||
| Endologix, Inc. | ||||
| By: | /s/ Xxxxxx X. Xxxxx | |||
| Name: Xxxxxx X. Xxxxx | ||||
| Title: Chief Financial Officer | ||||
Confirmed as of the date first
above mentioned:
above mentioned:
Canaccord Xxxxx Inc.
By:
|
/s/ Xxxxx X. Xxxxxxx | |||
| Title: Vice President |
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