RXi Pharmaceuticals Corporation 60 Prescott Street Worcester, MA 01605 Attn: Dr. Tod Woolf, CEO Dear Dr. Woolf:
Exhibit 1.1
March 17, 2009
Dear Xx. Xxxxx:
This letter (the “Agreement”) constitutes the agreement between RXi Pharmaceuticals Corporation
(the “Company”) and Xxxxxx & Xxxxxxx, LLC (“Xxxxxx”) that Xxxxxx shall serve as the exclusive
placement agent (the “Services”) for the Company, on a “best efforts” basis, in connection with the
proposed offer and placement (the “Offering”) by the Company of securities issued directly by the
Company (the “Securities”). For the avoidance of doubt, the Offering will not include, nor will the
Securities consist of, shares issued under the Company’s recent equity facility, or securities
issued pursuant to partnerships or other agreements to which Xxxxxx is not a party, or shares of
common stock of the Company (the “CytRx Shares”) proposed to be sold by CytRx Corporation (“CytRx”)
in the same transaction in which the Securities are to be offered and placed pursuant to a letter
agreement with Xxxxxx to be dated on or about the date hereof (the “CytRx Offering” and, together
with the Offering, the “Transaction”). The terms of the Offering and the Securities shall be
mutually agreed upon by the Company and the investors and nothing herein implies that Xxxxxx would
have the power or authority to bind the Company or an obligation for the Company to issue any
Securities or complete the Offering. The Company expressly acknowledges and agrees that Xxxxxx’x
obligations hereunder are on a reasonable best efforts basis only and that the execution of this
Agreement does not constitute a commitment by Xxxxxx to purchase the Securities and does not ensure
the successful placement of the Securities or any portion thereof or the success of Xxxxxx with
respect to securing any other financing on behalf of the Company. The Offering may consist of
shares of the Company’s common stock, warrants to purchase common stock, convertible securities, or
some combination thereof. The Company and Xxxxxx understand and agree that only after the Company
sells Securities in the Offering yielding gross proceeds to the Company of at least $10 million,
then CytRx may sell any CytRx Shares in the Offering. The Company has considered any potential
conflicts of interest in entering into this Agreement.
A. Fees and Expenses. In connection with the Services described above, the Company
shall pay to Xxxxxx the following compensation:
1. Placement Agent’s Fee. The Company shall pay to Rodman a cash placement fee (the
“Placement Agent’s Fee”) equal to 6% of the aggregate purchase price paid by each purchaser of
Securities that are placed in the Offering. The Placement Agent’s Fee shall be paid at the closing
of the Offering (the “Closing”) from the gross proceeds of the Securities sold. At the Company’s
election, up to 20% of (i) the Placement Agent’s Fee owed by the Company and (ii) the Warrants
described in Section 2 below may, in lieu of being paid and issued to Xxxxxx in accordance with
this Agreement, be paid to other parties.
2. Warrants. As additional compensation for the Services, the Company shall issue to
Xxxxxx or its designees at the Closing, warrants (the “Xxxxxx Warrants”) to purchase that number of
shares of common stock of the Company (“Shares”) equal to 1% of (i) the aggregate number of
Securities placed by the Company in the Offering if the gross amount raised by the Company is less
than $10 million, and 2% of the aggregate number of Securities placed by the Company in the
Offering if the gross amount raised by the Company is $10 million or more, plus (ii) any Shares
underlying any convertible
Securities sold by the Company in the Offering. The Xxxxxx Warrants shall have the same terms,
including exercise price and registration rights, as the warrants issued to investors (“Investors”)
in the Offering. If no warrants are issued to Investors, the Xxxxxx Warrants shall have an
exercise price equal to 125% of the price at which Securities are issued to Investors or, if no
Securities are issued, 125% of the current market price of the Shares at Closing, and an exercise
period of five years and registration rights for the Shares underlying the Xxxxxx Warrants
equivalent to those granted with respect to the Securities.
3. Expenses. In addition to any fees payable to Xxxxxx hereunder, but only if an
Offering is consummated, the Company hereby agrees to reimburse Xxxxxx for its pro rata share, as
allocated between the Company and CytRx according to the amount of proceeds received by each in the
Transaction (the “Pro Rata Ratio”), of all reasonable travel and other out-of-pocket expenses
incurred in connection with Xxxxxx’x engagement, including the reasonable fees and expenses of
Xxxxxx’x counsel. Such reimbursement by the Company and CytRx, collectively, shall be limited to
$35,000 without prior written approval by the Company and, to the extent applicable, CytRx and
shall be paid at the Closing from the gross proceeds of the Securities and CytRx Shares sold,
according to the Pro Rata Ratio as applicable.
B. Term and Termination of Engagement. The term (the “Term”) of Xxxxxx’x engagement
will begin on the date hereof and end on the earlier of the consummation of the Offering or 15 days
after the receipt by Xxxxxx of written notice of termination from the Company; provided that no
such notice may be given by the Company for a period of 60 days after the date hereof.
Notwithstanding anything to the contrary contained herein, the provisions concerning
confidentiality, indemnification, contribution and the Company’s obligations to pay fees and
reimburse expenses contained herein will survive any expiration or termination of this Agreement.
C. Fee Tail. Xxxxxx shall be entitled to a Placement Agent’s Fee and Xxxxxx Warrants,
calculated in the manner provided in Paragraph A, with respect to any public or private offering or
other financing or capital-raising transaction of any kind (“Tail Financing”) to the extent that
such financing or capital is provided to the Company by investors whom Xxxxxx had introduced
directly to the Company during the Term, as agreed to between the parties and to be scheduled
hereto, if such Tail Financing is consummated at any time within the 6-month period following the
expiration or termination of this Agreement (the “Tail Period”).
D. Use of Information. The Company will furnish Rodman such written information as
Xxxxxx reasonably requests in connection with the performance of its Services hereunder. The
Company understands, acknowledges and agrees that, in performing its Services hereunder, Xxxxxx
will use and rely entirely upon such information as well as publicly available information
regarding the Company and other potential parties to an Offering and that Xxxxxx does not assume
responsibility for independent verification of the accuracy or completeness of any information,
whether publicly available or otherwise furnished to it, concerning the Company or otherwise
relevant to an Offering, including, without limitation, any financial information, forecasts or
projections considered by Xxxxxx in connection with the provision of its Services.
E. Confidentiality. In the event of the consummation or public announcement of any
Offering, Xxxxxx shall have the right to disclose its participation in such Offering, including,
without limitation, the placement at its cost of “tombstone” advertisements in financial and other
newspapers and journals. Xxxxxx agrees not to use any confidential information concerning the
Company provided to Xxxxxx by the Company for any purposes other than those contemplated under this
Agreement and shall not disclose such confidential information to any party other than potential
parties to an Offering, except in response to a request from a regulator with jurisdiction over it.
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F. Securities Matters. The Company shall be responsible for any and all compliance
with the securities laws applicable to it, including Regulation D and the Securities Act of 1933,
as amended (the “Securities Act”), and Rule 506 promulgated thereunder, and unless otherwise agreed
in writing, all state securities (“blue sky”) laws. Xxxxxx agrees to cooperate with counsel to the
Company in that regard.
G. Indemnity.
1. In connection with the Company’s engagement of Xxxxxx as placement agent for the Offering,
the Company hereby agrees to indemnify and hold harmless Xxxxxx and its affiliates, and the
respective controlling persons, directors, officers, shareholders, agents and employees of any of
the foregoing (collectively the “Indemnified Persons”), from and against any and all claims,
actions, suits, proceedings (including those of shareholders), damages, liabilities and expenses
incurred by any of them (including the reasonable fees and expenses of counsel), as incurred,
(collectively a “Claim”), that are (A) related to or arise out of (i) any actions taken or omitted
to be taken (including any untrue statements made or any statements omitted to be made) by the
Company, or (ii) any actions taken or omitted to be taken by any Indemnified Person in connection
with the Company’s engagement of Xxxxxx for the Offering, or (B) otherwise relate to or arise out
of Xxxxxx’x activities on the Company’s behalf under Xxxxxx’x engagement for the Offering, and the
Company shall reimburse any Indemnified Person for all expenses (including the reasonable fees and
expenses of counsel) as incurred by such Indemnified Person in connection with investigating,
preparing or defending any such claim, action, suit or proceeding, whether or not in connection
with pending or threatened litigation in which any Indemnified Person is a party, provided that any
amounts paid by an Indemnified hereunder shall be refunded in the event that it is finally
judicially determined that such Indemnified Person was not entitled therein. The Company will not,
however, be responsible for any Claim, that resulted from the gross negligence or willful
misconduct of any person seeking indemnification for such Claim. The Company further agrees that
no Indemnified Person shall have any liability to the Company for or in connection with the
Company’s engagement of Xxxxxx except for any Claim incurred by the Company as a result of such
Indemnified Person’s gross negligence or willful misconduct.
2. The Company further agrees that it will not, without the prior written consent of Xxxxxx,
which consent will not be unreasonably withheld or delayed, settle, compromise or consent to the
entry of any judgment in any pending or threatened Claim in respect of which indemnification may be
sought hereunder (whether or not any Indemnified Person is an actual or potential party to such
Claim), unless such settlement, compromise or consent includes an unconditional, irrevocable
release of each Indemnified Person from any and all liability arising out of such Claim.
3. Promptly upon receipt by an Indemnified Person of notice of any complaint or the assertion
or institution of any Claim with respect to which indemnification is being sought hereunder, such
Indemnified Person shall notify the Company in writing of such complaint or of such assertion or
institution but failure to so notify the Company shall not relieve the Company from any obligation
it may have hereunder, except and only to the extent such failure results in the forfeiture by the
Company of substantial rights and defenses. If the Company so elects or is requested by such
Indemnified Person, the Company will assume the defense of such Claim, including the employment of
counsel reasonably satisfactory to such Indemnified Person and the payment of the fees and expenses
of such counsel. In the event, however, that legal counsel to such Indemnified Person reasonably
determines that having common counsel would present such counsel with a conflict of interest or if
the defendant in, or target of, any such Claim, includes an Indemnified Person and the Company, and
legal counsel to such Indemnified Person reasonably concludes that there may be legal defenses
available to it or other Indemnified Persons different from or in addition to those available to
the Company, then such Indemnified Person may
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employ its own separate counsel to represent or defend him, her or it in any such Claim and
the Company shall pay the reasonable fees and expenses of no more than one such counsel, in
addition to one local counsel. Notwithstanding anything herein to the contrary, if the Company
fails timely or diligently to defend, contest, or otherwise protect against any Claim, the relevant
Indemnified Party shall have the right, but not the obligation, to defend, contest, compromise,
settle, assert crossclaims, or counterclaims or otherwise protect against the same, and shall be
fully indemnified by the Company therefor, including without limitation, for the reasonable fees
and expenses of its counsel and all amounts paid as a result of such Claim or the compromise or
settlement thereof. In addition, with respect to any Claim in which the Company assumes the
defense, the Indemnified Person shall have the right to participate in such Claim and to retain
his, her or its own counsel therefor at his, her or its own expense.
4. The Company agrees that if any indemnity sought by an Indemnified Person hereunder is held
by a court to be unavailable for any reason then (whether or not Xxxxxx is the Indemnified Person),
the Company and Xxxxxx shall contribute to the Claim for which such indemnity is held unavailable
in such proportion as is appropriate to reflect the relative benefits to the Company, on the one
hand, and Xxxxxx on the other, in connection with Xxxxxx’x engagement for the Offering referred to
above, subject to the limitation that in no event shall the amount of Xxxxxx’x contribution to such
Claim exceed the amount of fees actually received by Xxxxxx from the Company pursuant to Xxxxxx’x
engagement for the Offering. The Company hereby agrees that the relative benefits to the Company,
on the one hand, and Xxxxxx on the other, with respect to Xxxxxx’x engagement for the Offering
shall be deemed to be in the same proportion as (a) the total value paid or proposed to be paid or
received by the Company or its stockholders (except for any benefit received by CytRx pursuant to
the CytRx Offering, which shall not be attributed to the Company in any way) as the case may be,
pursuant to the Offering (whether or not consummated) for which Xxxxxx is engaged to render
Services bears to (b) the fee paid or proposed to be paid to Xxxxxx in connection with such
engagement for the Offering.
5. The Company’s indemnity, reimbursement and contribution obligations under this Agreement
(a) shall be in addition to, and shall in no way limit or otherwise adversely affect any rights
that any Indemnified Party may have at law or at equity and (b) shall be effective whether or not
the Company is at fault in any way.
H. Limitation of Engagement to the Company. The Company acknowledges that Xxxxxx has
been retained for the Offering only by the Company, that Xxxxxx is providing Services hereunder as
an independent contractor (and not in any fiduciary or agency capacity) and that the Company’s
engagement of Xxxxxx for the Offering is not deemed to be on behalf of, and is not intended to
confer rights upon, any shareholder, owner or partner of the Company or any other person not a
party hereto as against Xxxxxx or any of its affiliates, or any of its or their respective
officers, directors, controlling persons (within the meaning of Section 15 of the Securities Act or
Section 20 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), employees or
agents. Unless otherwise expressly agreed in writing by Xxxxxx, no one other than the Company is
authorized to rely upon this Agreement or any other statements or conduct of Xxxxxx, and no one
other than the Company is intended to be a beneficiary of this Agreement. The Company acknowledges
that any recommendation or advice, written or oral, given by Xxxxxx to the Company in connection
with Xxxxxx’x engagement for the Offering is intended solely for the benefit and use of the
Company’s management and directors in considering a possible Offering, and any such recommendation
or advice is not on behalf of, and shall not confer any rights or remedies upon, any other person
or be used or relied upon for any other purpose. Xxxxxx shall not have the authority to make any
commitment binding on the Company. The Company, in its sole discretion, shall have the right to
reject any investor introduced to it by Xxxxxx, but only with respect to any potential sale of
Securities by the Company in the Offering. The Company agrees that it will perform and comply with
the covenants and other obligations set forth in the purchase agreement and related transaction
documents between the Company and the investors in the Offering, and that Xxxxxx will be
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entitled to rely on the representations, warranties, agreements and covenants of the Company
contained in such purchase agreement and any related transaction documents as if such
representations, warranties, agreements and covenants were made directly to Xxxxxx by the Company.
I. Limitation of Xxxxxx’x Liability to the Company. Xxxxxx and the Company further
agree that neither Xxxxxx nor any of its affiliates or any of its their respective officers,
directors, controlling persons (within the meaning of Section 15 of the Securities Act or Section
20 of the Exchange Act), employees or agents shall have any liability to the Company, its security
holders or creditors, or any person asserting claims on behalf of or in the right of the Company
(whether direct or indirect, in contract, tort, for an act of negligence or otherwise) for any
losses, fees, damages, liabilities, costs, expenses or equitable relief arising out of or relating
to this Agreement or the Services rendered hereunder, except for losses, fees, damages,
liabilities, costs or expenses that arise out of or are based on any action of or failure to act by
Xxxxxx and that are finally judicially determined to have resulted solely from the gross negligence
or willful misconduct of Xxxxxx.
J. Governing Law. This Agreement shall be governed by and construed in accordance
with the laws of the State of New York applicable to agreements made and to be fully performed
therein. Any disputes that arise under this Agreement, even after the termination of this
Agreement, will be heard only in the state or federal courts located in the City of New York, State
of New York. The parties hereto expressly agree to submit themselves to the jurisdiction of the
foregoing courts in the City of New York, State of New York. The parties hereto expressly waive any
rights they may have to contest the jurisdiction, venue or authority of any court sitting in the
City and State of New York. In the event of the bringing of any action, or suit by a party hereto
against the other party hereto, arising out of or relating to this Agreement, the party in whose
favor the final judgment or award shall be entered shall be entitled to have and recover from the
other party the costs and expenses incurred in connection therewith, including its reasonable
attorneys’ fees. Any rights to trial by jury with respect to any such action, proceeding or suit
are hereby waived by Xxxxxx and the Company.
K. Notices. All notices hereunder will be in writing and sent by certified mail, hand
delivery, overnight delivery or fax, if sent to Xxxxxx, Xxxxxx & Xxxxxxx, LLC, at the address set
forth on the first page hereof, fax number (000) 000-0000, Attention: General Counsel, and if sent
to the Company, to the address set forth on the first page hereof, fax number (000) 000-0000,
Attention: Chief Financial Officer. Notices sent by certified mail shall be deemed received five
days thereafter, notices sent by hand delivery or overnight delivery shall be deemed received on
the date of the relevant written record of receipt, and notices delivered by fax shall be deemed
received as of the date and time printed thereon by the fax machine.
L. Miscellaneous. This Agreement shall not be modified or amended except in writing
signed by Xxxxxx and the Company. This Agreement shall be binding upon and inure to the benefit of
both Xxxxxx and the Company and their respective assigns, successors, and legal representatives.
This Agreement constitutes the entire agreement of Xxxxxx and the Company, and supersedes any prior
agreements, with respect to the subject matter hereof. If any provision of this Agreement is
determined to be invalid or unenforceable in any respect, such determination will not affect such
provision in any other respect, and the remainder of the Agreement shall remain in full force and
effect. This Agreement may be executed in counterparts (including facsimile and .pdf
counterparts), each of which shall be deemed an original but all of which together shall constitute
one and the same instrument.
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In acknowledgment that the foregoing correctly sets forth the understanding reached by Xxxxxx
and the Company, please sign in the space provided below, whereupon this letter shall constitute a
binding Agreement as of the date indicated above.
| Very truly yours, XXXXXX & XXXXXXX, LLC |
||||
| By | /s/ Xxxx Xxxxx | |||
| Name: | Xxxx Xxxxx | |||
| Title: | Senior Managing Director | |||
Accepted and Agreed:
| RXI PHARMACEUTICALS CORPORATION |
||||
| By | /s/ Xxx Xxxxx | |||
| Name: | Xxx Xxxxx | |||
| Title: | President and CEO | |||
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May 26, 2009
Dear Xx. Xxxxx:
This letter (the “Agreement”) constitutes the agreement between RXi Pharmaceuticals
Corporation (the “Company”) and Xxxxxx & Xxxxxxx, LLC (“Xxxxxx” or the “Placement Agent”) to amend
the agreement between the parties dated March 17, 2009 (the “March 17 Agreement”) as follows:
| 1. | to add the following sentence at the end of the first paragraph: “If the Company chooses to have the Offering consist of registered securities, then the provisions of Annex A will apply in addition to the provisions set forth herein.” | ||
| 2. | to add the following language at the beginning of Section C: “Unless the Offering consists of registered securities,” | ||
| 3. | and to add Annex A, attached to this Agreement. |
All undefined terms used herein or in Annex A shall be as defined in the March 17 Agreement.
In acknowledgment that the foregoing correctly sets forth the understanding reached by Xxxxxx
and the Company, please sign in the space provided below, whereupon this letter shall constitute a
binding Agreement as of the date indicated above.
| Very truly yours, XXXXXX & XXXXXXX, LLC |
||||
| By | /s/ Xxxx Xxxxx | |||
| Name: | Xxxx Xxxxx | |||
| Title: | Senior Managing Director | |||
Accepted and Agreed:
| RXI PHARMACEUTICALS CORPORATION |
||||
| By | /s/ Xxx Xxxxx | |||
| Name: | Xxx Xxxxx | |||
| Title: | President and CEO | |||
Annex A
Additional Provisions With Respect to a Registered Offering
SECTION 1. WARRANTS The Xxxxxx Warrants described in Section A.2 shall not be transferable
except as permitted by FINRA Rule 5110.
SECTION 2. REGISTRATION STATEMENT.
The Company represents and warrants to, and agrees with, the Placement Agent that:
(A) The Company has filed with the Securities and Exchange Commission (the “Commission”) a
registration statement on Form S-3 (Registration File No. 333-158968) under the Securities Act of
1933, as amended (the “Securities Act”), which became effective on May [ ], 2009, for the
registration under the Securities Act of the Shares. At the time of such filing, the Company met
the requirements of Form S-3 under the Securities Act. Such registration statement meets the
requirements set forth in Rule 415(a)(1)(x) under the Securities Act and complies with said Rule.
The Company will file with the Commission pursuant to Rule 424(b) under the Securities Act, and the
rules and regulations (the “Rules and Regulations”) of the Commission promulgated thereunder, a
supplement to the form of prospectus included in such registration statement relating to the
placement of the Shares and the plan of distribution thereof and has advised the Placement Agent of
all further information (financial and other) with respect to the Company required to be set forth
therein. Such registration statement, including the exhibits thereto, as amended at the date of
this Agreement, is hereinafter called the “Registration Statement”; such prospectus in the form in
which it appears in the Registration Statement is hereinafter called the “Base Prospectus”; and the
supplemented form of prospectus, in the form in which it will be filed with the Commission pursuant
to Rule 424(b) (including the Base Prospectus as so supplemented) is hereinafter called the
“Prospectus Supplement.” Any reference in this Agreement to the Registration Statement, the Base
Prospectus or the Prospectus Supplement shall be deemed to refer to and include the documents
incorporated by reference therein (the “Incorporated Documents”) pursuant to Item 12 of Form S-3
which were filed under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), on or
before the date of this Agreement, or the issue date of the Base Prospectus or the Prospectus
Supplement, as the case may be; and any reference in this Agreement to the terms “amend,”
“amendment” or “supplement” with respect to the Registration Statement, the Base Prospectus or the
Prospectus Supplement shall be deemed to refer to and include the filing of any document under the
Exchange Act after the date of this Agreement, or the issue date of the Base Prospectus or the
Prospectus Supplement, as the case may be, deemed to be incorporated therein by reference. All
references in this Agreement to financial statements and schedules and other information which is
“contained,” “included,” “described,” “referenced,” “set forth” or “stated” in the Registration
Statement, the Base Prospectus or the Prospectus Supplement (and all other references of like
import) shall be deemed to mean and include all such financial statements and schedules and other
information which is or is deemed to be incorporated by reference in the Registration Statement,
the Base Prospectus or the Prospectus Supplement, as the case may be. No stop order suspending the
effectiveness of the Registration Statement or the use of the Base Prospectus or the Prospectus
Supplement has been issued, and no proceeding for any such purpose is pending or has been initiated
or, to the Company’s knowledge, is threatened by the Commission. For purposes of this Agreement,
“free writing prospectus” has the meaning set forth in Rule 405 under the Securities Act and the
“Time of Sale Prospectus” means the preliminary prospectus, if any, together with the free writing
prospectuses, if any, used in connection with the Placement, including any documents incorporated
by reference therein.
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(B) The Registration Statement (and any further documents to be filed with the Commission in
connection with the sale of the shares) contains all exhibits and schedules as required by the
Securities Act. Each of the Registration Statement and any post-effective amendment thereto, at the
time it became effective, complied in all material respects with the Securities Act and the
Exchange Act and the applicable Rules and Regulations and did not and, as amended or supplemented,
if applicable, will not, contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements therein not
misleading. The Base Prospectus, the Time of Sale Prospectus, if any, and the Prospectus
Supplement, each as of its respective date, comply in all material respects with the Securities Act
and the Exchange Act and the applicable Rules and Regulations. Each of the Base Prospectus, the
Time of Sale Prospectus, if any, and the Prospectus Supplement, as amended or supplemented, did not
and will not contain as of the date thereof 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. The Incorporated Documents, when they
were filed with the Commission, conformed in all material respects to the requirements of the
Exchange Act and the applicable Rules and Regulations, and none of such documents, when they were
filed with the Commission, contained any untrue statement of a material fact or omitted to state a
material fact necessary to make the statements therein (with respect to Incorporated Documents
incorporated by reference in the Base Prospectus or Prospectus Supplement), in light of the
circumstances under which they were made not misleading; and any further documents so filed and
incorporated by reference in the Base Prospectus, the Time of Sale Prospectus, if any, or
Prospectus Supplement, when such documents are filed with the Commission, will conform in all
material respects to the requirements of the Exchange Act and the applicable Rules and Regulations,
as applicable, 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 light of the circumstances under which
they were made, not misleading. No post-effective amendment to the Registration Statement
reflecting any facts or events arising after the date thereof which represent, individually or in
the aggregate, a fundamental change in the information set forth therein is required to be filed
with the Commission. There are no documents required to be filed with the Commission in connection
with the transaction contemplated hereby that (x) have not been filed as required pursuant to the
Securities Act or (y) will not be filed within the requisite time period.
(C) The Company is eligible to use free writing prospectuses in connection with the Placement
pursuant to Rules 164 and 433 under the Securities Act. Any free writing prospectus that the
Company is required to file pursuant to Rule 433(d) under the Securities Act has been, or will be,
filed with the Commission in accordance with the requirements of the Securities Act and the
applicable rules and regulations of the Commission thereunder. Each free writing prospectus that
the Company has filed, or is required to file, pursuant to Rule 433(d) under the Securities Act or
that was prepared by or behalf of or used by the Company complies or will comply in all material
respects with the requirements of the Securities Act and the applicable rules and regulations of
the Commission thereunder. The Company will promptly notify the Placement Agent if it prepares,
uses or refers to, any free writing prospectus.
(D) The Company has delivered, or will as promptly as practicable deliver, to the Placement
Agent complete conformed copies of the Registration Statement and of each consent and certificate
of experts, as applicable, filed as a part thereof, and conformed copies of the Registration
Statement (without exhibits), the Base Prospectus, the Time of Sale Prospectus, if any, and the
Prospectus Supplement, as amended or supplemented, in such quantities and at such places as the
Placement Agent reasonably requests. Neither the Company nor any of its directors and officers has
distributed and none of them will distribute, prior to the Closing Date, any offering material in
connection with the offering and sale of the Shares other than the Base Prospectus, the Time of
Sale Prospectus, if any, the Prospectus Supplement, the Registration Statement, copies of the
documents incorporated by reference therein and any other materials permitted by the Securities
Act.
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SECTION 3. REPRESENTATIONS AND WARRANTIES. Except as set forth under the
corresponding section of the Disclosure Schedules which Disclosure Schedules shall be deemed a part
hereof, or as described in the Registration Statement or any SEC Report, the Company hereby makes
the representations and warranties set forth below to the Placement Agent as of the closing of the
transactions described in the Transaction Documents.
(A) Organization and Qualification. The Company has no direct or indirect
subsidiaries (individually, a “Subsidiary”). The Company is an entity duly incorporated or
otherwise organized, validly existing and in good standing under the laws of the jurisdiction of
its incorporation or organization (as applicable), with the requisite power and authority to own
and use its properties and assets and to carry on its business as currently conducted. The Company
is not in violation or default of any of the provisions of its certificate or articles of
incorporation, bylaws or other organizational or charter documents. The Company is duly qualified
to conduct business and is in good standing as a foreign corporation or other entity in each
jurisdiction in which the nature of the business conducted or property owned by it makes such
qualification necessary, except where the failure to be so qualified or in good standing, as the
case may be, could not have or reasonably be expected to result in (i) a material adverse effect on
the legality, validity or enforceability of any Transaction Document, (ii) a material adverse
effect on the results of operations, assets, business, prospects or condition (financial or
otherwise) of the Company, or (iii) a material adverse effect on the Company’s ability to perform
in any material respect on a timely basis its obligations under any Transaction Document (any of
(i), (ii) or (iii), a “Material Adverse Effect”) and no “Proceeding” (which for
purposes of this Agreement shall mean any action, claim, suit, investigation or proceeding
(including, without limitation, an investigation or partial proceeding, such as a deposition),
whether commenced or threatened) has been instituted in any such jurisdiction revoking, limiting or
curtailing or seeking to revoke, limit or curtail such power and authority or qualification.
(B) Authorization; Enforcement. The Company has the requisite corporate power and
authority to enter into and to consummate the transactions contemplated by each of the Transaction
Documents 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 thereby have been duly authorized by all necessary action on the part of
the Company and no further action is required by the Company, its board of directors or its
stockholders in connection therewith other than in connection with the “Required Approvals”
(as defined in subsection 3(D) below). Each Transaction Document has been (or upon delivery will
have been) duly executed by the Company and, when delivered in accordance with the terms hereof and
thereof, will constitute the valid and binding obligation of the Company enforceable against the
Company in accordance with its terms except (i) as limited by applicable bankruptcy, insolvency,
reorganization, moratorium and other laws of general application affecting enforcement of
creditors’ rights generally and (ii) as limited by laws relating to the availability of specific
performance, injunctive relief or other equitable remedies.
(C) No Conflicts. The execution, delivery and performance of the Transaction
Documents by the Company, the issuance and sale of the Securities and the consummation by the
Company of the other transactions contemplated hereby and thereby do not and will not (i) conflict
with or violate any provision of the Company’s certificate or articles of incorporation, bylaws or
other organizational or charter documents, or (ii) conflict with, or constitute a default (or an
event that with notice or lapse of time or both would become a default) under, result in the
creation of any Lien upon any of the properties or assets of the Company or give to others any
rights of termination, amendment, acceleration or cancellation (with or without notice, lapse of
time or both) of, any agreement, 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) subject to the Required Approvals, conflict
with or 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
4
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 have or reasonably be expected to
result in a Material Adverse Effect.
(D) Filings, Consents and Approvals. The Company is not required to obtain any
consent, waiver, authorization or order of, give any notice to, or make any filing or registration
with, any court or other federal, state, local or other governmental authority or other
“Person” (defined as 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, including, without
limitation, any Trading Market) in connection with the execution, delivery and performance by the
Company of the Transaction Documents, other than such filings as are required to be made under
applicable Federal and state securities laws (collectively, the “Required Approvals”) or
except to the extent that the same has been obtained or made.
(E) Issuance of the Securities; Registration. The Securities 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 imposed by the Company
other than restrictions on transfer provided for in the Transaction Documents. The Company has or
will have prior to issuance reserved from its duly authorized capital stock the maximum number of
shares of Common Stock issuable pursuant to the Transaction Documents. The issuance by the Company
of the Securities has been registered under the Securities Act and all of the Securities are freely
transferable and tradable by the Purchasers without restriction (other than any restrictions
arising solely from an act or omission of a Purchaser). The Securities are being issued pursuant
to the Registration Statement and the issuance of the Securities has been registered by the Company
under the Securities Act. The Registration Statement is effective and available for the issuance
of the Securities thereunder and the Company has not received any notice that the Commission has
issued or intends to issue a stop-order with respect to the Registration Statement or that the
Commission otherwise has suspended or withdrawn the effectiveness of the Registration Statement,
either temporarily or permanently, or intends or has threatened in writing to do so. The “Plan of
Distribution” section under the Registration Statement permits the issuance and sale of the
Securities hereunder. Upon receipt of the Securities, the Purchasers will have good and marketable
title to such Securities and the Securities will be freely tradable on the “Trading Market”
(which, for purposes of this Agreement shall mean means the following markets or exchanges on which
the Common Stock is listed or quoted for trading on the date in question: the Nasdaq Capital
Market, the NYSE Alternext US, the New York Stock Exchange, the Nasdaq National Market or the OTC
Bulletin Board).
(F) Capitalization. The capitalization of the Company is as set forth on Schedule
3(F). The Company has not issued any capital stock since its most recently filed periodic report
under the Exchange Act, other than pursuant to the exercise of employee stock options under the
Company’s stock option plans, the issuance of shares of Common Stock to directors and employees
pursuant to the Company’s employee stock purchase plan and pursuant to the conversion or exercise
of securities exercisable, exchangeable or convertible into Common Stock (“Common Stock
Equivalents”). No Person has any right of first refusal, preemptive right, right of
participation, or any similar right to participate in the transactions contemplated by the
Transaction Documents that has not been waived or lapsed. Except as a result of the purchase and
sale of the Securities, there are no outstanding options, warrants, script rights to subscribe to,
calls or commitments of any character whatsoever relating to, or securities, rights or obligations
convertible into or exercisable or exchangeable for, or giving any Person any right to subscribe
for or acquire, any shares of Common Stock, or contracts, commitments, understandings or
arrangements by which the Company is or may become bound to issue additional shares of Common Stock
or Common Stock Equivalents. The issuance and sale of the Securities will not obligate the Company
to issue shares of Common Stock or other securities to any Person (other than the Purchasers) and
will not result in a right of any holder of Company securities to adjust the
5
exercise, conversion, exchange or reset price under such securities. All of the outstanding
shares of capital stock of the Company are validly issued, fully paid and nonassessable, have been
issued in compliance with all federal and state securities laws, and none of such outstanding
shares was issued in violation of any preemptive rights or similar rights to subscribe for or
purchase securities. No further approval or authorization of any stockholder, the Board of
Directors of the Company or others is required for the issuance and sale of the Securities. There
are no stockholders agreements, voting agreements or other similar agreements with respect to the
Company’s capital stock to which the Company is a party or, to the knowledge of the Company,
between or among any of the Company’s stockholders.
(G) SEC Reports; Financial Statements. The Company has complied in all material
respects with requirements to file all reports, schedules, forms, statements and other documents
required to be filed by it under the Securities Act and the Exchange Act, including pursuant to
Section 13(a) or 15(d) thereof, for the two years preceding the date hereof (or such shorter period
as the Company was required by law to file such material) (the foregoing materials, including the
exhibits thereto and documents incorporated by reference therein, 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 Securities Act and the Exchange Act and the rules and regulations of the
Commission 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. 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 Commission with respect thereto as in effect at the time of filing. Such
financial statements have been prepared in accordance with United States generally accepted
accounting principles applied on a consistent basis during the periods involved (“GAAP”),
except as may be otherwise specified in such financial statements or the notes thereto and except
that unaudited financial statements may not contain all footnotes required by GAAP, and fairly
present in all material respects the financial 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.
6
(H) Material Changes; Undisclosed Events, Liabilities or Developments. Since the date
of the latest audited financial statements included within the SEC Reports, (i) there has been no
event, occurrence or development that has had or that could reasonably be expected to 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 Commission, (iii) the Company has not altered its method of accounting, (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” (defined as 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 under the Securities Act), except pursuant to
existing Company stock option plans. The Company does not have pending before the Commission any
request for confidential treatment of information. Except for the issuance of the Securities
contemplated by this Agreement or as set forth on Schedule 3(H), no event, liability or development
has occurred or exists with respect to the Company or its business, properties, operations or
financial condition, that would be required to be disclosed by the Company under applicable
securities laws at the time this representation is made that has not been publicly disclosed 1
Trading Day prior to the date that this representation is made.
(I) Litigation. There is no action, suit, inquiry, notice of violation, Proceeding or
investigation pending or, to the knowledge of the Company, threatened against or affecting the
Company or any of its properties before or by any court, arbitrator, governmental or administrative
agency or regulatory authority (federal, state, county, local or foreign) (collectively, an
“Action”) which (i) adversely affects or challenges the legality, validity or
enforceability of any of the Transaction Documents or the Securities or (ii) is required to be
disclosed in a SEC Report. 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 related to the Company. There has not been,
and to the knowledge of the Company, there is not pending or contemplated, any investigation by the
Commission involving the Company or any current or former director or officer of the Company. The
Commission has not issued any stop order or other order suspending the effectiveness of any
registration statement filed by the Company under the Exchange Act or the Securities Act. None of
the Company’s employees is a member of a union that relates to such employee’s relationship with
the Company, and the Company is not a party to a collective bargaining agreement, and the Company
believes that its relationships with its employees are good. No executive officer, to the
knowledge of the Company, is, or is now expected to be, in violation of any material term of any
employment contract, confidentiality, disclosure or proprietary information agreement or
non-competition agreement, or any other contract or agreement or any restrictive covenant, and the
continued employment of each such executive officer does not subject the Company to any liability
with respect to any of the foregoing matters. The Company is in compliance with all U.S. federal,
state, local and foreign laws and regulations relating to employment and employment practices,
terms and conditions of employment and wages and hours, except where the failure to be in
compliance could not, individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.
(J) Labor Relations. No material labor dispute exists or, to the knowledge of the
Company, is imminent with respect to any of the employees of the Company which could reasonably be
expected to result in a Material Adverse Effect.
(K) Compliance. The Company (i) is not in default under or in violation of (and no
event has occurred that has not been waived that, with notice or lapse of time or both, would
result in a default by the Company), nor has the Company received notice of a claim that it is in
default under or that it is in violation of, any indenture, loan or credit agreement or any other
agreement or instrument to which it is a party or by
7
which it or any of its properties is bound (whether or not such default or violation has been
waived), (ii) is not in violation of any order of any court, arbitrator or governmental body
specifically naming the Company, or (iii) is or has not been in violation of any statute, rule or
regulation of any governmental authority, including without limitation all foreign, federal, state
and local laws applicable to its business and all such laws that affect the environment, except in
each case as could not have a Material Adverse Effect.
(L) Regulatory Permits. The Company possesses all certificates, authorizations and
permits issued by the appropriate federal, state, local or foreign regulatory authorities necessary
to conduct its business as described in the SEC Reports, except where the failure to possess such
permits could not have or reasonably be expected to result in a Material Adverse Effect
(“Material Permits”), and its the Company has not received any notice of proceedings
relating to the revocation or modification of any Material Permit.
(M) Title to Assets. The Company has good and marketable title in fee simple to all
real property owned by them that is material to the business of the Company and good and marketable
title in all personal property owned by them that is material to the business of the Company, in
each case free and clear of all Liens, except for Liens as do not materially affect the value of
such property and do not materially interfere with the use made and proposed to be made of such
property by the Company and Liens for the payment of federal, state or other taxes, the payment of
which is neither delinquent nor subject to penalties. Any real property and facilities held under
lease by the Company are held by them under valid, subsisting and enforceable leases of which the
Company and is in compliance.
(N) Patents and Trademarks. The Company has, or has rights to use, all patents,
patent applications, trademarks, trademark applications, service marks, trade names, trade secrets,
inventions, copyrights, licenses and other similar intellectual property rights necessary or
material for use in connection with its respective business as described in the SEC Reports and as
currently being conducted and which the failure to so have could have a Material Adverse Effect
(collectively, the “Intellectual Property Rights”). The Company has not received a notice
(written or otherwise) that the Intellectual Property Rights used by the Company violates or
infringes upon the rights of any Person. To the knowledge of the Company, all such Intellectual
Property Rights are enforceable and there is no existing infringement by another Person of any of
the Intellectual Property Rights of others. The Company has taken reasonable security measures to
protect the secrecy, confidentiality and value of all of their intellectual properties, except
where failure to do so could not, individually or in the aggregate, reasonably be expected to have
a Material Adverse Effect.
(O) Insurance. The Company is insured by insurers of recognized financial
responsibility against such losses and risks and in such amounts as are prudent and customary in
the businesses in which the Company is engaged, including, but not limited to, directors and
officers insurance coverage at least equal to the aggregate subscription amount under the
Transaction Documents. To the knowledge of the Company, such insurance contracts and policies are
accurate and complete. The Company has no reason to believe that it will not be able to renew its
existing insurance coverage as and when such coverage expires or to obtain similar coverage from
similar insurers as may be necessary to continue its business without a significant increase in
cost.
(P) Transactions With Affiliates and Employees. None of the officers or directors of
the Company and, to the knowledge of the Company, none of the employees of the Company is presently
a party to any transaction with the Company (other than for services as employees, officers and
directors), including any contract, agreement or other arrangement providing for the furnishing of
services to or by, providing for rental of real or personal property to or from, or otherwise
requiring payments to or from any officer, director or such employee or, to the knowledge of the
Company, any entity in which any officer, director, or any such employee has a substantial interest
or is an officer, director, trustee or partner, other than (i) for payment of salary or consulting
fees for services rendered, (ii) reimbursement for expenses incurred on behalf of the
8
Company and (iii) for other employee benefits, including stock option agreements under any
stock option plan of the Company.
(Q) Xxxxxxxx-Xxxxx. The Company is in material compliance with all provisions of the
Xxxxxxxx-Xxxxx Act of 2002 which are applicable to it as of the date hereof and of the closing date
of the Placement.
(R) Certain Fees. Except as otherwise provided in this Agreement, no brokerage or
finder’s fees or commissions are or will be payable by the Company to any broker, financial advisor
or consultant, finder, placement agent, investment banker, bank or other Person with respect to the
transactions contemplated by the Transaction Documents. The Purchasers shall have no obligation
with respect to any fees or with respect to any claims made by or on behalf of other Persons for
fees of a type contemplated in this Section that may be due in connection with the transactions
contemplated by the Transaction Documents.
(S) Trading Market Rules. The issuance and sale of the Securities hereunder does not
contravene the rules and regulations of the Trading Market on which the Common Stock is currently
listed.
(T) Investment Company. The Company is not, and is not an Affiliate of, and
immediately after receipt of payment for the Securities, will not be or be an Affiliate of, an
“investment company” within the meaning of the Investment Company Act of 1940, as amended. The
Company shall conduct its business in a manner so that it will not become subject to the Investment
Company Act.
(U) Registration Rights. No Person has any right to cause the Company to effect the
registration under the Securities Act of any securities of the Company.
(V) Listing and Maintenance Requirements. The Company’s Common Stock is registered
pursuant to Section 12(b) or 12(g) of the Exchange Act, and the Company has taken no action
designed to, or which to its knowledge is likely to have the effect of, terminating the
registration of the Common Stock under the Exchange Act nor has the Company received any
notification that the Commission is contemplating terminating such registration. The Company has
not, in the 12 months preceding the date hereof, received notice from any Trading 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 such Trading 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.
9
(W) Application of Takeover Protections. The Company and its Board of Directors have
taken all necessary action, if any, in order to render inapplicable any control share acquisition,
business combination, poison pill (including any distribution under a rights agreement) or other
similar anti-takeover provision under the Company’s Certificate of Incorporation (or similar
charter documents) or the laws of its state of incorporation that is or could become applicable to
the Purchasers as a result of the Purchasers and the Company fulfilling their obligations or
exercising their rights under the Transaction Documents, including without limitation as a result
of the Company’s issuance of the Securities and the Purchasers’ ownership of the Securities.
(X) Tax Status. Except for matters that would not, individually or in the aggregate,
have or reasonably be expected to result in a Material Adverse Effect, the Company has filed all
necessary federal, state and foreign income and franchise tax returns and has paid or accrued all
taxes shown as due thereon, and the Company has no knowledge of a tax deficiency which has been
asserted or threatened against the Company.
(Y) Foreign Corrupt Practices. Neither the Company, nor to the knowledge of the
Company, any agent or other person acting on behalf of the Company, has (i) directly or indirectly,
used any funds for unlawful contributions, gifts, entertainment or other unlawful expenses related
to foreign or domestic political activity, (ii) made any unlawful payment to foreign or domestic
government officials or employees or to any foreign or domestic political parties or campaigns from
corporate funds, (iii) failed to disclose fully any contribution made by the Company (or made by
any person acting on its behalf of which the Company is aware) which is in violation of law, or
(iv) violated in any material respect any provision of the Foreign Corrupt Practices Act of 1977,
as amended.
(Z) Accountants. The Company’s accountants BDO Xxxxxxx, LLP. To the knowledge of the
Company, such accountants, who the Company expects will express their opinion with respect to the
financial statements to be included in the Company’s next Annual Report on Form 10-K, are a
registered public accounting firm as required by the Securities Act.
(AA) Regulation M Compliance. 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 Securities, (ii) sold, bid for, purchased, or, paid any compensation
for soliciting purchases of, any of the Securities (other than for the placement agent’s placement
of the Securities), or (iii) paid or agreed to pay to any person any compensation for soliciting
another to purchase any other securities of the Company.
(BB) Approvals. The issuance and listing on the Nasdaq Capital Market of the Shares
requires no further approvals, including but not limited to, the approval of shareholders.
(CC) FINRA Affiliations. Other than Xxxxxx X. Xxxxxxxxx, there are no affiliations
with any FINRA member firm among the Company’s officers, directors or, to the knowledge of the
Company, any five percent (5%) or greater stockholder of the Company, except as set forth in the
Base Prospectus.
10
SECTION 4. CLOSING. The obligations of the Placement Agent and the Purchasers,
and the closing of the sale of the Securities hereunder are subject to the accuracy, when made and
on the Closing Date, of the representations and warranties on the part 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 and 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 shall have been
issued and no proceedings for that purpose shall have been initiated or threatened by the
Commission, and any request for additional information on the part of the Commission (to be
included in the Registration Statement, the Base Prospectus or the Prospectus Supplement or
otherwise) shall have been complied with to the reasonable satisfaction of the Placement Agent.
(B) The Placement Agent shall not have discovered and disclosed to the Company on or prior to
the Closing Date that the Registration Statement, the Base Prospectus or the Prospectus Supplement
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.
(C) All corporate proceedings and other legal matters incident to the authorization, form,
execution, delivery and validity of each of this Agreement, the Securities, the Registration
Statement, the Base Prospectus and the Prospectus Supplement 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) The Placement Agent shall have received from outside counsel to the Company such counsel’s
written opinion, addressed to the Placement Agent and the Purchasers dated as of the Closing Date,
in form and substance reasonably satisfactory to the Placement Agent, which opinion shall include a
“10b-5” representation from such counsel.
(E) The Company shall not have sustained since the date of the latest audited financial
statements included or incorporated by reference in the Base Prospectus, any loss or interference
with its business from fire, explosion, flood, terrorist act 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 or contemplated by the Base Prospectus and (ii) since such date
there shall not have been any change in the capital stock or long-term debt of the Company or any
change, or any development involving a prospective change, in or affecting the business, general
affairs, management, financial position, stockholders’ equity, results of operations or prospects
of the Company, otherwise than as set forth in or contemplated by the Base Prospectus, the effect
of which, in any such case described in clause (i) or (ii), 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 Securities on the terms and in the manner contemplated by the Base Prospectus,
the Time of Sale Prospectus, if any, and the Prospectus Supplement.
(F) The Common Stock is registered under the Exchange Act and, as of the Closing Date, the
Shares shall be listed and admitted and authorized for trading on Nasdaq Capital Market, and
satisfactory evidence of such actions shall have been provided to the Placement Agent. The Company
shall have taken no action designed to, or likely to have the effect of terminating the
registration of the Common Stock under the Exchange Act or delisting or suspending from trading the
Common Stock from Nasdaq
11
Capital Market, nor has the Company received any information suggesting that the Commission or
Nasdaq Capital Market is contemplating terminating such registration or listing.
(G) Subsequent to the execution and delivery of this Agreement, there shall not have occurred
any of the following: (i) trading in securities generally on the New York Stock Exchange, the
Nasdaq National Market or the NYSE Alternext US or in the over-the-counter market, or trading in
any securities of the Company on any exchange or in the over-the-counter market, shall have been
suspended or minimum or maximum prices or maximum ranges for prices shall have been established on
any such exchange or such market by the Commission, by such exchange or by any other regulatory
body or governmental authority having jurisdiction, (ii) a banking moratorium shall have been
declared by federal or state authorities or a material disruption has occurred in commercial
banking or securities settlement or clearance services in the United States, (iii) the United
States shall have become engaged in hostilities in which it is not currently engaged, the subject
of an act of terrorism, there shall have been an escalation in hostilities involving the United
States, or there shall have been a declaration of a national emergency or war by the United States,
or (iv) there shall have occurred any other calamity or crisis or any change in general economic,
political or financial conditions in the United States or elsewhere, if the effect of any such
event in clause (iii) or (iv) makes it, in the sole judgment of the Placement Agent, impracticable
or inadvisable to proceed with the sale or delivery of the Securities on the terms and in the
manner contemplated by the Base Prospectus and the Prospectus Supplement.
(H) No action shall have been taken and no statute, rule, regulation or order shall have been
enacted, adopted or issued by any governmental agency or body which would, as of the Closing Date,
prevent the issuance or sale of the Securities or materially and adversely affect or potentially
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 as of the Closing Date which would prevent the issuance or sale of the Securities
or materially and adversely affect or potentially and adversely affect the business or operations
of the Company.
(I) The Company shall have prepared and filed with the Commission a Current Report on Form 8-K
with respect to the Placement, including as an exhibit thereto this Agreement.
(J) The Company shall have entered into subscription agreements with each of the Purchasers
and such agreements shall be in full force and effect and shall contain representations and
warranties of the Company as agreed between the Company and the Purchasers.
(K) FINRA shall have raised no objection to the fairness and reasonableness of the terms and
arrangements of this Agreement. In addition, the Company shall, if requested by the Placement
Agent, make or authorize Placement Agent’s counsel to make on the Company’s behalf, an Issuer
Filing with FINRA pursuant to FINRA Rule 5110 with respect to the Registration Statement and pay
all filing fees required in connection therewith.
(L) Prior to the Closing Date, the Company shall have furnished to the Placement Agent such
further information, certificates and documents as the Placement Agent may reasonably request.
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.
12
July 22, 2009
Xxxxxx & Xxxxxxx, LLC
0000 Xxxxxx xx xxx Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attn: Xxxx Xxxxx
0000 Xxxxxx xx xxx Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attn: Xxxx Xxxxx
Dear Xx. Xxxxx:
This letter constitutes an agreement between RXi Pharmaceuticals Corporation (the “Company”)
and Xxxxxx & Xxxxxxx, LLC (the “Placement Agent”) to amend the agreement between the parties dated
March 17, 2009, as amended by a letter dated May 26, 2009 (the “Agreement”) as follows:
| 1. | Replace Section A.2 of the Agreement with the following: |
“Warrants. As additional compensation for the Services, the Company shall issue to
Xxxxxx or its designees (as permitted by FINRA Rule 5110(g)) at the Closing, warrants (the
“Xxxxxx Warrants”) to purchase that number of shares of common stock of the Company
(“Shares”) equal to the greatest of the following mutually exclusive alternatives: (i) 1% of
the aggregate number of Shares placed by the Company in the Offering, if the Offering
consists of Common Stock or units consisting of Common Stock and Common Stock purchase
warrants AND the gross amount raised by the Company is less than $10 million, (ii) 2% of
the aggregate number of Shares placed by the Company in the Offering, if the Offering
consists of Common Stock or units consisting of Common Stock and Common Stock purchase
warrants AND the gross amount raised by the Company is $10 million or more, (iii) 1% of the
number of shares of Common Stock issuable upon conversion of Securities convertible into
Common Stock placed by the Company in the Offering (if the Offering consists of convertible
securities or units consisting of convertible securities and Common Stock purchase
warrants)) AND the gross amount raised by the Company is less than $10 million, or (iv) 2%
of the number of shares of Common Stock issuable upon conversion of Securities convertible
into Common Stock placed by the Company in the Offering (if the Offering consists of
convertible securities or units consisting of convertible securities and Common Stock
purchase warrants) AND the gross amount raised by the Company is $10 million or more. The
Xxxxxx Warrants shall have the same terms as the warrants issued to investors in the
Offering (if any are offered to public), except that the Xxxxxx Warrants shall have an
exercise price equal to the greater of (i) 125% of the public offering price per share (as
to any Shares of Common Stock issued) or (ii) equal to 125% of the conversion price of any
convertible Securities issued (as to any convertible Securities convertible into Common
Stock), and shall be exercisable for a term of 5 years from the effective date of the
registration statement, have no price-based dilution protection, no registration rights and
shall be restricted from transfer for a period of 6 months from the closing date except as
expressly permitted by FINRA Rule 5110(g). For clarity, the
1
Xxxxxx Warrants shall only entitle Xxxxxx to purchase shares of Common Stock, and not to
purchase any type of convertible security.
| 2. | Remove Section C of the Agreement. | ||
| 3. | Replace Section A.3 of the Agreement with the following: | ||
| “3. Expenses. In addition to any fees payable to Xxxxxx hereunder, but only if an Offering is consummated, the Company agreement to reimburse Xxxxxx for all reasonable travel and other out of pocket expenses incurred in connection with Xxxxxx’x engagement, including the reasonable fees and expenses of Xxxxxx’x counsel. Such reimbursement shall be limited to 1.6% of Offering proceeds and shall not exceed $35,000 without the prior written approval of the Company, but in no event shall such reimbursement exceed 1.6% of Offering proceeds”. |
[Remainder of Page Intentionally Left Blank.]
2
In acknowledgement that the foregoing correctly sets forth the understanding reached by the
Company and the Placement Agent, please sign in the space provided below, whereupon this letter
shall constitute a binding agreement as of the date indicated above.
| Very truly yours, RXI PHARMACEUTICALS CORPORATION |
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| By: | /s/ Xxx Xxxxx | |||
| Name: | Xxx Xxxxx | |||
| Title: | President and CEO | |||
Accepted and Agreed:
| XXXXXX & XXXXXXX, LLC |
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| By: | /s/ Xxxx Xxxxx | |||
| Name: | Xxxx Xxxxx | |||
| Title: | Senior Managing Director | |||
