GEOVAX LABS, INC. From Units Representing $5 Million (________ Units) to Units Representing $35 Million (________ Units), Each Consisting of One Share of Common Stock and One Five-Year Warrant to Purchase one (1) Additional Share of Common Stock...
Exhibit 1.1
From Units Representing $5 Million (________ Units) to Units Representing $35 Million
(________ Units), Each Consisting of One Share of Common Stock and
One Five-Year Warrant to Purchase one (1) Additional Share of Common Stock
(________ Units), Each Consisting of One Share of Common Stock and
One Five-Year Warrant to Purchase one (1) Additional Share of Common Stock
PLACEMENT AGENCY AGREEMENT
____________, 2010
Global Hunter Securities LLC
000 Xxxxxxx Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxx Xxxxx, XX 00000
000 Xxxxxxx Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxx Xxxxx, XX 00000
Dear Sir or Madam:
GeoVax Labs, Inc., a Delaware corporation (the “Company”) proposes to issue and sell units
(the “Company Units”), with each Company Unit consisting of one share of common stock (each, a
“Company Share”), par value $0.001 per share (the “Common Stock”) and one five-year warrant to
purchase one (1) additional share of Common Stock, a form of which is attached hereto as Exhibit
A (each, a “Company Warrant”) to certain investors that are “accredited investors” within the
meaning of Rule 501(a) of Regulation D promulgated under the Securities Act of 1933, as amended
(the “Act”) or “qualified institutional buyers” within the meaning of Rule 144A (collectively, the
“Investors”). In addition, the Company together with Emory University (the “Selling Stockholder”)
propose to issue and sell units (the “Selling Stockholder Units,” and together with the Company
Units, the “Units”), with each Selling Stockholder Unit consisting of one share of Common Stock
held by the Selling Stockholder (each, a “Selling Stockholder Share” and together with the Company
Shares, the “Shares”) and one five-year warrant to purchase one (1) additional share of Common Stock
to be issued by the Company in the form of the Company Warrant (each, a “Selling Stockholder Unit
Warrant,” and together with the Company Warrants, the “Warrants”), to the Investors. The Company
and the Selling Stockholder desire to engage you as the placement agent (the “Placement Agent”) in
connection with such issuance and sale of the Units (the “Offering”). The Units, Shares and
Warrants are more fully described in the Registration Statement (as hereinafter defined). You, the
Company and the Selling Stockholder agree that the first Units sold hereunder, representing an
aggregate purchase price of up to $30 million, shall be Company Units and that no Selling
Stockholder Units will be sold until Company Units representing an aggregate purchase price of $30
million have been sold.
The Company and the Selling Stockholder hereby confirm as follows their agreement with the
Placement Agent.
1. Agreement to Act as Placement Agent. On the basis of the representations,
warranties and agreements of the Company and the Selling Stockholder herein contained and subject
to all the terms and conditions of this Agreement, the Placement Agent agrees to act as the
Company’s and the Selling Stockholder’s exclusive placement agent in connection with the issuance
and sale, on a minimum-maximum best efforts basis, by the Company and the Selling Stockholder of
the Units to the Investors. The Placement Agent agrees to use its commercially reasonable best
efforts to identify prospective Investors and assist the Company and the Selling Stockholder in
selling the Units in accordance with applicable federal and state laws. The Company shall pay
to the Placement Agent six percent (6%) of the proceeds received by the Company from the sale of
the Company Units. The Selling Stockholder shall pay to the Placement Agent six percent (6%) of
the proceeds it receives from the sale of Selling Stockholder Units.
2. Delivery and Payment.
(a) Delivery of and Payment for Company Units. Prior to or at the Closing Date
(defined below), each of the Investors will deposit an amount equal to the price per Unit as
shown on the cover page of the Prospectus (as hereinafter defined) multiplied by the number
of Units to be purchased by the Investor in an escrow account established, at the Company’s
expense, for the benefit of the Investors (the “Escrow Account”) at American Stock Transfer
& Trust Company, the Company’s transfer agent (the “Transfer Agent”). Until subscriptions for Units representing $5 million have been received,
the Placement Agent shall promptly, upon receipt of any and all checks, drafts, and money orders received from prospective purchasers of the Units, deliver same to the Transfer Agent (also serving as escrow agent)
for deposit into the Escrow Account by noon of the next business day following the receipt, together with a written account of each purchaser which sets
forth, among other things, the name and address of the purchaser, the number of Units purchased and the amount paid therefor. Any checks received which are made payable to any party other than the Transfer
Agent (also serving as escrow agent), shall be returned to the purchaser who submitted the check and not accepted. All Units sold until
the aggregate purchase price of $30 million is received shall be Company Units, and the
Units sold subsequently will be Selling Stockholder Units.
(b) At 10:00 a.m., New York City time, on ___, 2010, or at such other time on such
other date as may be agreed upon by the Company and the Placement Agent (such date is
hereinafter referred to as the “Closing Date”), the Company shall deliver (i) the Company
Shares, which delivery may be made through the facilities of the Depository Trust Company
directly to the Investors, and (ii) the Company Warrants, which delivery shall be made
through delivery of a duly executed Warrant, each in the name of the Investor to the
Placement Agent for forwarding to the Investors, upon payment for the Units by the
Investors. The closing (the “Closing”) shall take place at the office of Xxxxxx Xxxxxxx
Xxxxxxxxx & Xxxx, PLLC, 000 00xx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxx 00000-0000.
All actions taken at the Closing shall be deemed to have occurred simultaneously.
(c) Delivery and Payment for Selling Stockholder Units. At the Closing Date,
the Transfer Agent, who is also acting as Custodian for the Selling Stockholder Shares,
shall deliver the Selling Stockholder Shares and the Company shall deliver the Selling
Stockholder Warrants, which delivery shall be made through delivery of a duly executed
Warrant, to the Investors upon payment therefor on behalf of the Investors. All actions
taken at the Closing shall be deemed to have occurred simultaneously.
(d) Form of Warrants and Shares. The Company Warrants and the certificates
evidencing the Company Shares shall be in definitive form and shall be registered in such
names and in such denominations as the Placement Agent shall request by written notice to
the Company. The Selling Stockholder Warrants and the certificates evidencing the Selling
Stockholder Shares shall be in definitive form and shall be registered in such names and in
such denominations as the Placement Agent shall request, consistent with the Investor
Subscription Agreement (defined below) by written notice to the Transfer Agent or the
Company, as applicable. For the purpose of expediting the checking and packaging of
certificates for the Company Units, the Company agrees to make the Company Warrants and
certificates evidencing the Company Shares available for inspection at least 24 hours prior
to delivery to the Investors. For the purpose of expediting the checking and packaging of
certificates for the Selling Stockholder Units, the Company agrees to make the Selling
Stockholder Warrants available for inspection at least 24 hours prior to delivery to the
Investors, and the Selling Stockholder agrees to cause the Custodian to make the
certificates
evidencing the Selling Stockholder Shares available for inspection at least 24 hours
prior to delivery to the Investors.
2
3. Representations and Warranties of the Company. The Company represents and warrants
and covenants to the Placement Agent that:
(a) The Company has filed with the Securities and Exchange Commission (the
“Commission”) a registration statement on Form S-1 (Registration No. 333-165828), which has
become effective, relating to the Securities (defined below), under the Act, and the rules
and regulations (collectively referred to as the “Rules and Regulations”) of the Commission
promulgated thereunder. As used in this Agreement:
(i) “Applicable Time” means 6:00 p.m. New York City time on the date of this
Agreement;
(ii) “Company Lock-Up Agreement” means that certain lock-up agreement executed
by the Company dated April 13, 2010;
(iii) “Custody Agreement” means that certain custody agreement duly executed
and delivered by the Selling Stockholder, in the form heretofore furnished to the
Placement Agent;
(iv) “Effective Date” means any date as of which any part of the Registration
Statement became, or is deemed to have become, effective under the Act in accordance
with the Rules and Regulations;
(v) “Investor Subscription Agreement” means the proposed subscription
agreements to be executed by certain Investors, the Company, and the Selling
Stockholder in order to consummate the sale of the Units, substantially in the form
attached hereto as Exhibit B;
(vi) “Issuer Free Writing Prospectus” means each “free writing prospectus” (as
defined in Rule 405 of the Rules and Regulations) prepared by or on behalf of the
Company or used or referred to by the Company in connection with the offering of the
Units, if any; unless counsel to the Company and the Placement Agent agree that the
Company is not an “ineligible issuer” and is otherwise eligible to use a free
writing prospectus pursuant to Rule 405, the parties acknowledge and agree that no
Issuer Free Writing Prospectus shall be used or referred to by the Company in
connection with the offering of the Units;
(vii) “Preliminary Prospectus” means any preliminary prospectus relating to the
Units included in the Registration Statement or filed with the Commission pursuant
to Rule 424(b) of the Rules and Regulations, including any preliminary prospectus
supplement thereto relating to the Units;
(viii) “Pricing Disclosure Materials” means, as of the Applicable Time, the
most recent Preliminary Prospectus, together with each Issuer Free Writing
Prospectus filed or used by the Company on or before the Applicable Time;
3
(ix) “Prospectus” means the final prospectus relating to the Units including
any prospectus supplement thereto relating to the Units, as filed with the
Commission pursuant to Rule 424(b) of the Rules and Regulations;
(x) “Registration Statement” includes and means, collectively, the various
parts of such registration statement, each as amended as of the Effective Date for
such part, including any Preliminary Prospectus or the Prospectus and all exhibits
to such registration statement;
(xi) “Securities” means, collectively, the Units, the Shares, the Warrants and
the Warrant Shares;
(xii) “Selling Stockholder Lock-Up Agreement” means that certain form of
lock-up agreement executed by each Selling Stockholder;
(xiii) “Transaction Documents” means, collectively, this Agreement, the Company
Lock-Up Agreement, the Warrants and the Investor Subscription Agreements; and
(xiv) “Warrant Shares” means the shares of Common Stock issuable upon exercise
of the Warrants.
Any reference to any Preliminary Prospectus or the Prospectus shall be deemed to refer to
and include any documents incorporated or deemed to be incorporated by reference therein
pursuant to Form S-1 under the Act as of the date of such Preliminary Prospectus or the
Prospectus, as the case may be. Any reference herein to the terms “amend,” “amendment” or
“supplement” with respect to the Registration Statement, any Preliminary Prospectus or the
Prospectus shall be deemed to refer to and include any document filed under the Securities
Exchange Act of 1934, as amended (the “Exchange Act”), after the effective date of the
Registration Statement, the date of such Preliminary Prospectus or the date of the
Prospectus, as the case may be, which is incorporated in such Registration Statement,
Preliminary Prospectus or Prospectus by reference.
(b) The Registration Statement has heretofore become effective under the Act or, with
respect to any registration statement to be filed to register the offer and sale of Units
pursuant to Rule 462(b) under the Act, will be filed with the Commission and become
effective under the Act no later than 10:00 p.m., New York City time, on the date of
determination of the public offering price for the Units; provided no stop order of the
Commission preventing or suspending the use of any Prospectus, or the effectiveness of the
Registration Statement, has been issued, and no proceedings for such purpose have been
instituted or, to the Company’s knowledge, are contemplated by the Commission.
(c)
[Omitted]
4
(d) The Registration Statement, at the time it became effective, as of the date hereof,
and at the Closing Date conformed and will conform in all material respects to the
requirements of the Act and the Rules and Regulations. The Preliminary Prospectus
conformed, and the Prospectus will conform, when filed with the Commission pursuant to Rule
424(b) and on the Closing Date in all material respects to the requirements of the Act and
the Rules and Regulations. The documents incorporated by reference in any Preliminary
Prospectus or the Prospectus conformed, when filed with the Commission, and any further
documents so incorporated will conform, when filed with the Commission, in all material
respects to the requirements of the Exchange Act or the Act, as applicable, and the rules
and regulations of the Commission thereunder.
(e) The Registration Statement did not, as of the Effective Date, contain an untrue
statement of a material fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein not misleading.
(f) The Prospectus will not, as of its date and on the Closing Date, contain an untrue
statement of a material fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein, in the light of the circumstances under which
they were made, not misleading; provided, however, that the Company makes no representation
or warranty with respect to any statement contained in the Prospectus in reliance upon and
in conformity with information concerning the Placement Agent and furnished in writing by
the Placement Agent to the Company expressly for use in the Prospectus, as set forth in
Section 10(b) hereof.
(g) Neither the documents incorporated by reference in any Preliminary Prospectus nor
the documents that will be incorporated into the Prospectus, when filed with the Commission,
and any further documents filed and incorporated by reference therein contained or will
contain, when filed with the Commission, an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not misleading.
(h) The Pricing Disclosure Materials did not, as of the Applicable Time, contain an
untrue statement of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading, except that the price of the Units, number of Units to
be sold, and disclosures directly relating thereto will be included on the cover page of the
Prospectus; provided, however, that the Company makes no representation or warranty with
respect to any statement contained in the Pricing Disclosure Materials in reliance upon and
in conformity with information concerning the Placement Agent and furnished in writing by
the Placement Agent to the Company expressly for use in the Pricing Disclosure Materials, as
set forth in Section 10(a) hereof.
(i) Each Issuer Free Writing Prospectus (including, without limitation, any road show
that is a free writing prospectus under Rule 433), when considered together with the Pricing
Disclosure Materials as of the Applicable Time, did not contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were made, not
misleading, except that the price of the Units, number of Units to be sold, and disclosures
directly relating thereto will be included on the cover page of the Prospectus.
5
(j) Each Issuer Free Writing Prospectus conformed or will conform in all material
respects to the requirements of the Act and the Rules and Regulations on the date of first
use, and the Company has complied with any filing requirements applicable to such Issuer
Free Writing Prospectus pursuant to the Rules and Regulations. The Company has not made any
offer relating to the Securities that would constitute an Issuer Free Writing Prospectus
without the prior written consent of the Placement Agent, except as set forth on
Schedule 1 hereto. The Company has retained in accordance with the Rules and
Regulations all Issuer Free Writing Prospectuses that were not required to be filed pursuant
to the Rules and Regulations.
(k) The Company is, and at the Closing Date will be, duly organized, validly existing
and in good standing under the laws of Delaware. The Company has, and at the Closing Date
will have, the requisite power and authority to conduct all the activities conducted by it,
to own or lease all the assets owned or leased by it and to conduct its business as
described in the Registration Statement and the Prospectus (or, if the Prospectus is not in
existence, in the most recent Preliminary Prospectus). The Company is, and at the Closing
Date will be, duly licensed or qualified to do business and in good standing as a foreign
organization in all jurisdictions in which the nature of the activities conducted by it or
the character of the assets owned or leased by it makes such licensing or qualification
necessary, except where the failure to be so qualified or in good standing or have such
power or authority would not, individually or in the aggregate, have a material adverse
effect or would reasonably be expected to have a material adverse effect on or affecting the
business, prospects, properties, management, consolidated financial position, stockholders’
equity or results of operations of the Company and its Subsidiaries (as defined below) taken
as a whole (a “Material Adverse Effect”). Except as disclosed in the Registration
Statement, the Company does not own, and at the Closing Date will not own, directly or
indirectly, any shares of stock or any other equity or long-term debt securities of any
corporation or have any equity interest in any firm, partnership, joint venture, association
or other entity. Complete and correct copies of the articles or certificate of
incorporation and of the bylaws of the Company and all amendments thereto have been
delivered to the Placement Agent, and no changes therein will be made subsequent to the date
hereof and prior to the Closing Date.
(l) The Company’s only subsidiaries (each a “Subsidiary” and collectively, the
“Subsidiaries”) are listed on Schedule 2 to this Agreement. Each Subsidiary has
been duly organized or formed and is validly existing as a corporation, limited liability
company or limited partnership, as the case may be, in good standing under the laws of its
jurisdiction of formation or incorporation. Each Subsidiary is duly qualified and in good
standing as a foreign corporation, limited liability company or limited partnership, as the
case may be, in each jurisdiction in which the character or location of its properties
(owned, leased or licensed) or the nature or conduct of its business makes such
qualification necessary, except for those failures to be so qualified or in good standing
which will not have a Material Adverse Effect. All of the equity interests of each
subsidiary of the Company have been duly authorized and validly issued, are fully paid and
non-assessable and are owned, directly or indirectly, by the Company are owned free and
clear of any lien, encumbrance, claim, security interest, restriction on transfer,
shareholders’ agreement, voting trust other defect of title whatsoever.
6
(m) The issued and outstanding shares of capital stock of the Company have been validly
issued, are fully paid and nonassessable and, other than as set forth in the Registration
Statement, are not subject to any preemptive or similar rights. The Company has an
authorized, issued and outstanding capitalization as set forth in the Prospectus as of the
dates referred to therein. The description of the securities of the Company in the
Registration Statement and the Prospectus is, and at the Closing Date will be, complete and
accurate in all respects. Except as set forth in the Registration Statement and the
Prospectus and as contemplated herein, the Company does not have outstanding any options to
purchase, or any rights or warrants to subscribe for, or any securities or obligations
convertible into, or exchangeable for, or any contracts or commitments to issue or sell, any shares of capital stock or other securities.
(n) The Company has the requisite corporate power and authority to enter into the
Transaction Documents and perform the transactions contemplated thereby. The Transaction
Documents (other than the Investor Subscription Agreements, which have not yet been
executed) have been (and upon execution and delivery by the Company and the Investor, the
Investor Subscription Agreements will be) duly authorized and validly executed and delivered
by the Company and are legal, valid and binding agreements of the Company enforceable
against the Company in accordance with their respective terms, except (i) as limited by
general equitable principles and applicable bankruptcy, insolvency, reorganization,
moratorium and other laws of general application affecting enforcement of creditors’ rights
generally, (ii) as limited by laws relating to the availability of specific performance,
injunctive relief or other equitable remedies and (iii) insofar as indemnification and
contribution provisions may be limited by applicable law, including by public policy, and
(iv) except such as have been obtained, and such as may be required under state securities
or Blue Sky Laws or the bylaws and rules of the Financial Industry Regulatory Authority,
Inc. (“FINRA”), the OTC Bulletin Board or NYSE Amex Equities in connection with the purchase
and distribution of the Units by the Placement Agent.
(o) The issuance and sale of the Units, the Shares, the Warrants, when issued, and the
Warrant Shares, when issued and paid for upon exercise of the Warrants, have been duly
authorized by the Company, and the Company Shares, when issued and paid for in accordance
with this Agreement, will be duly and validly issued, fully paid and nonassessable and will
not be subject to preemptive or similar rights. The holders of the Units will not be
subject to personal liability by reason of being such holders. The Units, the Shares and
the Warrants, when issued, will conform in all material respects to the description thereof
set forth in or incorporated into the Prospectus.
(p) The consolidated financial statements and the related notes included in the
Registration Statement and the Prospectus 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 and its consolidated Subsidiaries 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. No other financial statements or schedules of the Company any Subsidiary
or
any other entity are required by the Act or the Rules and Regulations to be included in
the Registration Statement or the Prospectus.
7
(q) Xxxxxx Xxxxxx Xxxxx LLP and Xxxxx, Xxxxxx & Company, LLC (collectively, the
“Accountants”), who have reported on such financial statements and schedules, are
independent accountants with respect to the Company within the applicable rules and
regulations adopted by the Commission and the Public Company Accounting Oversight Board
(United States) and as required by the Act. The financial statements of the Company and the
related notes and schedules included in the Registration Statement and the Prospectus have
been prepared in conformity with the requirements of the Act and the Rules and Regulations
and present fairly the information shown therein.
(r) The Company is, and at the Closing Date will be, in material compliance with all
provisions of the Xxxxxxxx-Xxxxx Act of 2002 which are applicable to it. The Company and
each Subsidiary maintain a system of internal accounting controls sufficient to provide
reasonable assurance that (i) transactions are executed in accordance with management’s
general or specific authorization; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with GAAP and to maintain accountability
for assets; (iii) access to assets is permitted only in accordance with management’s general
or specific authorization; and (iv) the recorded accountability for assets is compared with
existing assets at reasonable intervals and appropriate action is taken with respect to any
differences.
(s) Except as set forth in or otherwise contemplated by the Registration Statement
(exclusive of any amendment thereof) or the Prospectus (exclusive of any supplement
thereto), since the date of the most recent financial statements of the Company included or
incorporated by reference in the Registration Statement and the Prospectus and prior to
Closing, (i) there has not been and will not have been any change in the capital stock of
the Company or long-term debt of the Company or any Subsidiary (except pursuant to existing
agreements and commitments previously disclosed to you) or any dividend or distribution of
any kind declared, set aside for payment, paid or made by the Company on any class of
capital stock, or any material adverse change, or any development that would reasonably be
expected to result in a Material Adverse Effect; (ii) neither the Company nor any Subsidiary
has entered or will enter into any transaction or agreement, not in the ordinary course of
business, that is material to the Company and its Subsidiaries taken as a whole, or incurred
or will incur any liability or obligation, direct or contingent, not in the ordinary course
of business, that is material to the Company and its Subsidiaries taken as a whole, or
incurred or will incur any liability or obligation, direct or contingent, not in the
ordinary course of business, that is material to the Company and its Subsidiaries taken as a
whole; and (iii) neither the Company nor any Subsidiary has sustained or will sustain any
material loss or interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor disturbance or dispute or
any action, order or decree of any court or arbitrator or governmental or regulatory
authority, except in each case as otherwise disclosed in the Registration Statement and the
Prospectus.
(t) The Company and its Subsidiaries have legal, valid and defensible title to all of
their interests in all real and personal property owned by them, in each case free and clear
of all mortgages, pledges, security interests, claims, liens, encumbrances, restrictions and
defects of any kind, except (1) such as are described in the Registration Statement and the
8
Prospectus or (2) those that do not materially affect or interfere with the use made
and proposed to be made of such properties taken as a whole; and any property held under
lease or sublease by the Company or any of its subsidiaries is held under valid, subsisting
and enforceable leases or subleases with such exceptions as are not material and do not
interfere with the use made and proposed to be made of such properties taken as a whole by
the Company and its Subsidiaries or except such as are described in the Registration
Statement and the Prospectus; and neither the Company nor any of its Subsidiaries has any
notice or knowledge of any material claim of any sort that has been, or may be, asserted by
anyone adverse to the Company’s or any of its Subsidiaries’ rights as lessee or sublessee
under any lease or sublease described above, or affecting or questioning the Company’s or
any of its Subsidiaries’ rights to the continued possession of the leased or subleased
premises under any such lease or sublease in conflict with the terms thereof. This
subsection (t) does not apply to the Intellectual Property, which is addressed at subsection
(gg) below.
(u) The Company is not, nor upon completion of the transactions contemplated herein
will it be, 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”).
(v) There are no legal, governmental or regulatory actions, suits or proceedings
pending, nor, to the Company’s knowledge, any legal, governmental or regulatory
investigations, to which the Company or any Subsidiary is a party or to which any property
of the Company or any Subsidiary is the subject that, individually or in the aggregate, if
determined adversely to the Company or such Subsidiary, would reasonably be expected to have
a Material Adverse Effect or materially and adversely affect the ability of the Company to
perform its obligations under the Transaction Documents; to the Company’s knowledge, no such
actions, suits or proceedings are threatened or contemplated by any governmental or
regulatory authority or threatened by others; and to the Company’s knowledge, there are no
current or pending legal, governmental or regulatory investigations, actions, suits or
proceedings that are required under the Act to be described in the Prospectus that are not
so described.
(w) The Company and each Subsidiary has, and at the Closing Date will have, (i) all
governmental licenses, permits, consents, orders, approvals and other authorizations
necessary to carry on its business as presently conducted except where the failure to have
such governmental licenses, permits, consents, orders, approvals and other authorizations
would not have a Material Adverse Effect, (ii) complied, with all laws, regulations and
orders applicable to either it or its business, except where the failure to so comply would
not have a Material Adverse Effect, and (iii) performed all its obligations required to be
performed, and is not, and at the Closing Date will not be, to the Company’s best knowledge,
in default, under any indenture, mortgage, deed of trust, voting trust agreement, loan
agreement, bond, debenture, note agreement, lease, contract or other agreement or instrument
(collectively, a “contract or other agreement”) to which it is a party or by which its
property is bound or affected, except as otherwise set forth in the Registration Statement
and the Prospectus and except where such default would not have a Material Adverse Effect,
and, to the Company’s best knowledge, no other party under any material contract or other
agreement to which it is a party is in default in any respect thereunder. The Company is
not and its Subsidiaries are not in violation of any provision of their respective
organizational or governing documents.
9
(x) [Omitted]
(y) Neither (i) the issuance, offering and sale of the Securities pursuant hereto, nor
(ii) the compliance by the Company with the other provisions hereof require the consent,
approval, authorization, registration or qualification of or with any governmental
authority, except such as have been obtained, and such as may be required under state
securities or Blue Sky laws or the bylaws and rules of FINRA in connection with the purchase
and distribution of the Units by the Placement Agent.
(z) Neither the execution of the Transaction Documents, nor the issuance, offering or
sale of the Securities, nor the consummation of any of the transactions contemplated herein
or therein, nor the compliance by the Company with the terms and provisions hereof or
thereof will conflict with, or will result in a breach of, any of the terms and provisions
of, or has constituted or will constitute a default under, or has resulted in or will result
in the creation or imposition of any lien, charge or encumbrance upon any property or assets
of the Company or any Subsidiary pursuant to the terms of any contract or other agreement to
which the Company or its Subsidiaries may be bound or to which any of the property or assets
of the Company or its Subsidiaries is subject, except such conflicts, breaches or defaults
as may have been waived or could not reasonably be expected to result in a Material Adverse
Effect; nor will such action result in any violation of the provisions of the organizational
or governing documents of the Company or any Subsidiary, or any statute or any order, rule
or regulation applicable to the Company or any Subsidiary or of any court or of any federal,
state or other regulatory authority or other government body having jurisdiction over the
Company or any Subsidiary.
(aa) There is no document or contract of a character required by the SEC to be
described in the Registration Statement or the Prospectus or to be filed as an exhibit to
the Registration Statement which is not described or filed as required. All such contracts
to which the Company is a party have been duly authorized, executed and delivered by the
Company, constitute valid and binding agreements of the Company, and are enforceable against
the Company in accordance with the terms thereof, subject to the effect of applicable
bankruptcy, insolvency or similar laws affecting creditors’ rights generally and equitable
principles of general applicability.
(bb) The Company is familiar with, or has carefully read, the Registration Statement
and, to the Company’s knowledge, none of the Registration Statement, the Prospectus or any
Preliminary Prospectus, or any amendment or supplement thereto, or any certificate signed by
the Company and delivered to the Placement Agent or its counsel, as of its date and while
effective contained an untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements therein (in light of
the circumstances under which they were made) not misleading.
(cc) The Company and its directors, officers or controlling persons have not taken,
directly or indirectly, any action intended, or which might reasonably be expected, to cause
or result, under the Act or otherwise, in, or which has constituted, stabilization or
manipulation of the price of any security of the Company to facilitate the sale or resale of
the Common Stock.
10
(dd) The Common Stock is currently listed on the OTC Bulletin Board. At the Closing,
the Common Stock shall be listed or approved for listing, with such listing to occur at the
Closing or as soon as practicable thereafter, on NYSE Amex Equities. The Company has not,
in the 12 months preceding the date hereof, received notice from the OTC Bulletin Board to
the effect that the Company is not in compliance with the listing or maintenance
requirements of the OTC Bulletin Board. The Company is, and has no reason to believe that
it will not in the foreseeable future continue to be, in compliance with all listing and
maintenance requirements of the OTC Bulletin Board or NYSE Amex Equities, as applicable.
(ee) The Company is not involved in any material labor dispute nor is any such dispute
known by the Company to be threatened.
(ff) The business and operations of the Company have been and are being conducted in
compliance with all applicable laws, ordinances, rules, regulations, licenses, permits,
approvals, plans, authorizations or requirements relating to occupational safety and health,
or pollution, or protection of health or the environment (including, without limitation,
those relating to emissions, discharges, releases or threatened releases of pollutants,
contaminants or hazardous or toxic substances, materials or wastes into ambient air, surface
water, groundwater or land, or relating to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling of chemical substances, pollutants,
contaminants or hazardous or toxic substances, materials or wastes, whether solid, gaseous
or liquid in nature) of any governmental department, commission, board, bureau, agency or
instrumentality of the United States, any state or political subdivision thereof, or any
foreign jurisdiction, and all applicable judicial or administrative agency or regulatory
decrees, awards, judgments and orders relating thereto, except where the failure to be in
such compliance will not, individually or in the aggregate, have a Material Adverse Effect;
and the Company has not received any notice from any governmental instrumentality or any
third party alleging any material violation thereof or liability thereunder (including,
without limitation, liability for costs of investigating or remediating sites containing
hazardous substances and/or damages to natural resources).
(gg) Except as disclosed in the Registration Statement, (i) the Company and each
Subsidiary owns or has obtained valid and enforceable licenses or options for the
inventions, patent applications, patents, trademarks (both registered and unregistered),
trade names, copyrights and trade secrets necessary for the conduct of its respective
business as currently conducted (collectively, the “Intellectual Property”); and (ii) (a) to
the Company’s knowledge, there are no third parties who have any ownership rights to any
Intellectual Property that is owned by, or has been licensed to, the Company or any
Subsidiary for the products described in the Registration Statement that would preclude the
Company or any Subsidiary from conducting its business as currently conducted and have a
Material Adverse Effect, except for the ownership rights of the owners of the Intellectual
Property licensed or optioned by the Company or a Subsidiary; (b) to the Company’s
knowledge, there are currently no sales of any products that would constitute an
infringement by third parties of any Intellectual Property owned, licensed or optioned by
the Company or any Subsidiary, which infringement would have a Material Adverse Effect; (c)
there is no pending or, to the Company’s knowledge, threatened action, suit, proceeding or
claim by others challenging the rights of the Company or any Subsidiary in or to any
Intellectual Property owned, licensed or optioned by the Company or any Subsidiary, other
than claims which would not reasonably
11
be expected to have a Material Adverse Effect; (d) there is no pending or, to the
Company’s knowledge, threatened action, suit, proceeding or claim by others challenging the
validity or scope of any Intellectual Property owned, licensed or optioned by the Company or
any Subsidiary, other than non material actions, suits, proceedings and claims; and (e)
there is no pending or, to the Company’s knowledge, threatened action, suit, proceeding or
claim by others that the Company or any of any Subsidiaries infringes or otherwise violates
any patent, trademark, copyright, trade secret or other proprietary right of others, other
than non material actions, suits, proceedings and claims.
(hh) The Company and each Subsidiary 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 any tax deficiency which has been or might be asserted or
threatened against it or any Subsidiary which could have a Material Adverse Effect.
(ii) On the Closing Date, all stock transfer or other taxes (other than income taxes)
which are required to be paid by the Company in connection with the sale and transfer of the
Company Shares or Warrants to be sold hereunder will be, or will have been, fully paid or
provided for by the Company and all laws imposing such taxes will be or will have been fully
complied with.
(jj) The Company and each Subsidiary maintains insurance of the types and in the
amounts that the Company reasonably believes is adequate for their respective businesses,
including, but not limited to, insurance covering all real and personal property owned or
leased by the Company or any Subsidiary against theft, damage, destruction, acts of
vandalism and all other risks customarily insured against by similarly situated companies,
all of which insurance is in full force and effect.
(kk) Neither the Company nor any Subsidiary, nor, to the knowledge of the Company, any
director, officer, agent or employee has directly or indirectly, (i) made any unlawful
contribution to any candidate for public office, or failed to disclose fully any
contribution in violation of law, or (ii) made any payment to any federal or state
governmental officer or official, or other person charged with similar public or
quasi-public duties, other than payments required or permitted by the laws of the United
States or any jurisdiction thereof, (iii) violated or is in violation of any provisions of
the U.S. Foreign Corrupt Practices Act of 1977, or (iv) made any bribe, rebate, influence
payment, kickback or other unlawful payment.
(ll) The operations of the Company and its Subsidiaries are and have been conducted at
all times in compliance with applicable financial recordkeeping and reporting requirements
of the Currency and Foreign Transactions Reporting Act of 1970, as amended, the money
laundering statutes of all jurisdictions, the rules and regulations thereunder and any
related or similar rules, regulations or guidelines, issued, administered or enforced by any
governmental agency (collectively, the “Money Laundering Laws”) and no action, suit or
proceeding by or before any court or governmental agency, authority or body or any
arbitrator involving the Company or any of its Subsidiaries with respect to the Money
Laundering Laws is pending or, to the best knowledge of the Company, threatened.
12
(mm) None of the Company, any of its Subsidiaries or, to the knowledge of the Company,
any director, officer, agent, employee or affiliate of the Company or any of its
Subsidiaries is currently subject to any U.S. sanctions administered by the Office of
Foreign Assets Control of the U.S. Department of the Treasury (“OFAC”); and the Company
will not, directly or indirectly, use the proceeds of the offering of the Units hereunder,
or the proceeds received upon exercise of the Warrants, if any, or lend, contribute or
otherwise make available such proceeds to any subsidiary, joint venture partner or other
person or entity, for the purpose of financing the activities of any person currently
subject to any U.S. sanctions administered by OFAC.
(nn) The Company has not distributed and, prior to the later to occur of the Closing
Date and completion of the distribution of the Securities, will not distribute any offering
material in connection with the offering and sale of the Securities other than any
Preliminary Prospectus, the Prospectus, any Issuer Free Writing Prospectus to which the
Placement Agent has consented and any Issuer Free Writing Prospectus set forth on
Schedule 1.
(oo) Each material employee benefit plan, within the meaning of Section 3(3) of the
Employee Retirement Income Security Act of 1974, as amended (“ERISA”), that is maintained,
administered or contributed to by the Company or any of its affiliates for employees or
former employees of the Company and its Subsidiaries has been maintained in material
compliance with its terms and the requirements of any applicable statutes, orders, rules and
regulations, including but not limited to ERISA and the Internal Revenue Code of 1986, as
amended (the “Code”); no prohibited transaction, within the meaning of Section 406 of ERISA
or Section 4975 of the Code, has occurred which would result in a material liability to the
Company with respect to any such plan excluding transactions effected pursuant to a
statutory or administrative exemption; and for each such plan that is subject to the funding
rules of Section 412 of the Code or Section 302 of ERISA, no “accumulated funding
deficiency” as defined in Section 412 of the Code has been incurred, whether or not waived,
and the fair market value of the assets of each such plan (excluding for these purposes
accrued but unpaid contributions) exceeds the present value of all benefits accrued under
such plan determined using reasonable actuarial assumptions.
(pp) No relationship, direct or indirect, exists between or among the Company or any
Subsidiary, on the one hand, and the directors, officers, stockholders, customers or
suppliers of the Company or any Subsidiary, on the other, which is required by the Act to be
disclosed in the Registration Statement and the Prospectus and is not so disclosed.
(qq) No person has the right to require the Company to register any securities for sale
under the Act by reason of the filing of the Registration Statement with the Commission or
by reason of the issuance and sale of the Securities, except for rights which have been
waived.
(rr) The Company has not sold or issued any securities that would be integrated with
the offering of the Securities contemplated by this Agreement pursuant to the Act, the Rules
and Regulations or the interpretations thereof by the Commission.
(ss) No forward-looking statement (within the meaning of Section 27A of the Securities
Act and Section 21 E of the Exchange Act) contained in the Registration Statement
and the Prospectus has been made or reaffirmed without a reasonable basis or has been
disclosed other than in good faith.
13
4. Representations and Warranties of the Selling Stockholder. The Selling Stockholder
represents and warrants and covenants to the Placement Agent and the Company that:
(a) The Selling Stockholder has, and will have, at the Closing Date, good and valid
title to the Selling Stockholder Shares to be sold by the Selling Stockholder, free of any
liens, encumbrances, equities and claims, and full right, power and authority to effect the
sale and delivery of such Selling Stockholder Shares, and upon the delivery of and payment
for such Selling Stockholder Shares pursuant to this Agreement, good and valid title
thereto, free of any liens, security interests, encumbrances, charges or equitable or other
claims, will be transferred to the Investors acquiring such Selling Stockholder Shares.
(b) The Selling Stockholder has executed and delivered a Power of Attorney, a copy of which has been
provided to you. Certificates in negotiable form for the Selling Stockholder Shares to be sold by
the Selling Stockholder hereunder, appropriately executed stock powers with Medallion guarantees,
and an executed Custody Agreement, copies of which have also been provided to you, are in the
possession and control of the Selling Stockholder. At the direction of an attorney-in-fact under
the Power of Attorney the Selling Stockholder shall promptly place the certificates, together with
the Custody Agreement, in custody with the Transfer Agent, in its capacity as Custodian (the
“Custodian”), for delivery pursuant to the terms of this Agreement, under the Power of Attorney and
the Custody Agreement; and the Selling Stockholder Shares represented by the certificates so held
in custody for the Selling Stockholder are and will be subject to the interests, if any, of the
Investors. This Agreement, the Custody Agreement and the Selling Stockholder Lock-Up Agreement
have been duly authorized, executed and delivered by such Selling Stockholder, and are the valid
and binding agreements of the Selling Stockholder, enforceable in accordance with their terms,
except as enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or
other laws affecting creditors’ rights generally and by general principles of equity, and except
insofar as rights to indemnification and contribution contained herein may be limited by federal or
state securities laws or related public policy.
(c) The execution and delivery of this Agreement, the Custody Agreement, and the
Selling Stockholder Lock-Up Agreement, the sale and delivery of the Selling Stockholder
Shares to be sold by the Selling Stockholder and the consummation of the transactions
contemplated herein and therein, and compliance by the Selling Stockholder with its
obligations hereunder and thereunder do not and will not, whether with or without the giving
of notice or passage of time or both, conflict with or constitute a breach of, or default
under, or result in the creation or imposition of any tax, lien, charge or encumbrance upon
the Selling Stockholder Shares to be sold by the Selling Stockholder or any property or
assets of the Selling Stockholder pursuant to any contract, indenture, mortgage, deed of
trust, loan or credit agreement, note, license, lease or other agreement or instrument to
which the Selling Stockholder is a party or by which the Selling Stockholder may be bound,
or to which any of the property or assets of the Selling Stockholder is subject, nor will
such action result in any violation of the provisions of the charter or by-laws or other
organizational instrument of the Selling Stockholder, if applicable, or any applicable
treaty, law, statute, rule, regulation, judgment, order, writ or decree of any government,
government instrumentality or court, domestic or foreign, having jurisdiction over the
Selling Stockholder or any of its properties.
(d) The Selling Stockholder has the legal right and power, and all authorizations and
approvals required by law, to enter into this Agreement, the Custody Agreement and the
Selling Stockholder Lock-Up Agreement and to sell, transfer and deliver the Selling
Stockholder Shares to be sold by such Selling Stockholder.
14
(e) The Selling Stockholder has not taken and will not take, directly or indirectly,
any action designed to or which might reasonably be expected to cause or result in a
violation of Section 5 of the Act or Regulation M under the Act or in stabilization or
manipulation of the price of the Common Stock.
(f) No consent, approval, authorization or order of any court or governmental agency or
body is required for the consummation by the Selling Stockholder of the transactions
contemplated herein, except such as may have been obtained under the Act and such as may be
required under the securities or Blue Sky laws of any jurisdiction in connection with the
purchase and distribution of the Selling Stockholder Shares by the Placement Agent and such
other approvals as have been obtained.
(g) The information, if any, in the Registration Statement, any Preliminary Prospectus
and the Prospectus that relates to the Selling Stockholder, and that has been furnished to
the Company in writing by the Selling Stockholder expressly for use therein does not, and
will not on the date of the execution of this Agreement or on the Closing Date contain any
untrue statement of a material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein, in the light of the circumstances under
which they were made, not misleading.
5. Agreements of the Company. The Company covenants and agrees with the Placement
Agent as follows:
(a) When the Registration Statement has become effective, and if Rule 430A is used or
the filing of the Prospectus is otherwise required under Rule 424(b), the Company will file
the Prospectus (properly completed if Rule 430A has been used) pursuant to Rule 424(b)
within the prescribed time period and will provide a copy of such filing to the Placement
Agent promptly following such filing.
(b) The Company will use commercially reasonable efforts to keep the Registration
Statement effective at all times during the period commencing on the effective date of the
Registration Statement and continuing thereafter until the closing of the sale of the Units
and for at least six months thereafter, and until such later date that either (i) all
Warrants shall have either been exercised in full or terminated or (ii) in the opinion of
counsel, an exemption from the registration requirements of applicable federal and state
securities laws is available for the issuance of all Securities and the resale thereof (the
“Registration Period”).
(c) The Company will not, during the Registration Period, file any amendment or
supplement to the Registration Statement or the Prospectus, except as required by law,
unless a copy thereof shall first have been submitted to the Placement Agent within a
reasonable period of time prior to the filing thereof and the Placement Agent shall not have
reasonably and timely objected thereto in good faith.
(d) The Company will notify the Placement Agent promptly, and will, if requested,
confirm such notification in writing, (1) when any post-effective amendment to the
Registration Statement becomes effective at any time during the Registration Period; (2) of
any request by the Commission for any amendments to the Registration Statement or any
amendment or supplements to the Prospectus or any Issuer Free Writing Prospectuses or for
15
additional information at any time during the Registration Period; (3) of the issuance
by the Commission of any stop order suspending the effectiveness of the Registration
Statement, the Prospectus or any Issuer Free Writing Prospectus, or the initiation of any
proceedings for that purpose or the threat thereof, at any time during the Registration
Period; (4) of becoming aware of the occurrence of any event during the Registration Period
that in the judgment of the Company makes any statement made in the Registration Statement
or the Prospectus untrue in any material respect or that requires the making of any changes
in the Registration Statement or the Prospectus in order to make the statements therein, in
light of the circumstances in which they are made, not misleading; and (5) of receipt by the
Company of any notification with respect to any suspension of the qualification of the
Securities for offer and sale in any jurisdiction. If at any time the Commission shall
issue any order suspending the effectiveness of the Registration Statement in connection
with the offering contemplated hereby, the Company will make every reasonable effort to
obtain the withdrawal of any such order at the earliest possible moment. If the Company has
omitted any information from the Registration Statement, pursuant to Rule 430A, it will use
its best efforts to comply with the provisions of and make all requisite filings with the
Commission pursuant to said Rule 430A and to notify the Placement Agent promptly of all such
filings.
(e) If, at any time when a Prospectus relating to the Securities is required to be
delivered under the Act, the Company becomes aware of the occurrence of any event as a
result of which the Prospectus, as then amended or supplemented, would, in the reasonable
judgment of counsel to the Company or counsel to the Placement Agent, include any untrue
statement of a material fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were made, not
misleading, or the Registration Statement, as then amended or supplemented, would, in the
reasonable judgment of counsel to the Company or counsel to the Placement Agent, include any
untrue statement of a material fact or omit to state a material fact necessary to make the
statements therein not misleading, or if for any other reason it is necessary, in the
reasonable judgment of counsel to the Company or counsel to the Placement Agent, at any time
to amend or supplement the Prospectus or the Registration Statement to comply with the Act
or the Rules and Regulations, the Company will promptly notify the Placement Agent and,
subject to Section 5(b) hereof, will promptly prepare and file with the Commission, at the
Company’s expense, an amendment to the Registration Statement or an amendment or supplement
to the Prospectus that corrects such statement or omission or effects such compliance and
will deliver to the Placement Agent, without charge, such number of copies thereof as the
Placement Agent may reasonably request. The Company consents to the use of the Prospectus
or any amendment or supplement thereto by the Placement Agent, and the Placement Agent
agrees to provide to each Investor, prior to the Closing, a copy of the Prospectus and any
amendments or supplements thereto.
(f) The Company will furnish to the Placement Agent and its counsel, without charge (i)
one copy of the Registration Statement, including financial statements and schedules, and
all exhibits thereto and (ii) so long as a prospectus relating to the Securities is required
to be delivered under the Act, as many copies of each Issuer Free Writing Prospectus,
Preliminary Prospectus or the Prospectus or any amendment or supplement thereto as the
Placement Agent may reasonably request.
(g) The Company will comply with all the undertakings contained in the Registration
Statement.
16
(h) The Company will not make any offer relating to the Securities that would
constitute an Issuer Free Writing Prospectus without the prior written consent of the
Placement Agent, and unless counsel to the Company and the Placement Agent agree that the
Company is not an “ineligible issuer” and is otherwise eligible to use a free writing
prospectus pursuant to Rule 405;
(i) The Company will retain in accordance with the Rules and Regulations all Issuer
Free Writing Prospectuses not required to be filed pursuant to the Rules and Regulations.
(j) Prior to the sale of the Units to the Investors, the Company will cooperate with
the Placement Agent and its counsel in connection with the registration or qualification of
the Securities for offer and sale under the state securities or Blue Sky laws of such
jurisdictions as the Placement Agent may reasonably and timely 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 to take any action which would subject it to general service of
process in any jurisdiction where it is not now so subject.
(k) The Company will apply the net proceeds from the offering and sale of the Units in
substantially the manner set forth in the Prospectus under the caption “Use of Proceeds.”
(l) The Company will take all actions necessary to ensure that the Shares and the
Warrant Shares are listed or approved for listing on NYSE Amex Equities at the time of
Closing, with such listing to occur at the Closing or as soon as practicable thereafter.
(m) The Company will not at any time, directly or indirectly, take any action intended,
or which might reasonably be expected, to cause or result in, or which will constitute,
stabilization of the price of its Common Stock to facilitate the sale or resale of any of
the Securities.
(n) The Company shall comply with all of the terms and conditions set forth in the
Company Lock-Up Agreement, including without limitation, the covenant that it shall not
consent to any request by any other party subject to a lock-up agreement to permit the sale
by such party of any shares of Common Stock.
6. Agreement of the Placement Agent. The Placement Agent represents and warrants to
and agrees with the Company that it shall not include any “issuer information” (as defined in Rule
433 under the Act) in any “free writing prospectus” (as defined in Rule 405 under the Act) used or
referred to by the Placement Agent without the prior consent of the Company (any such issuer
information with respect to whose use the Company has given its consent, “Permitted Issuer
Information”); provided that (i) no such consent shall be required with respect to any such issuer
information contained in any document filed by the Company with the Commission prior to the use of
such free writing prospectus and (ii) “issuer information,” as used in this Section 6 shall not be
deemed to include information prepared by the Placement Agent on the basis of or derived from
issuer information; and provided, further that unless counsel to the Company and the Placement
Agent agree that the Company is not an “ineligible issuer” and is otherwise eligible to use a free
writing prospectus pursuant to Rule 405, the Placement Agent agrees that no free writing prospectus
shall be used or referred to in connection with the offering of the
Units.
17
7. Expenses. Whether or not the transactions contemplated by this Agreement are
consummated or this Agreement is terminated, the Company will pay all costs and expenses incident
to the performance of the obligations of the Company and the Selling Stockholder under this
Agreement, including but not limited to costs and expenses of or relating to (1) the preparation,
printing and filing of the Registration Statement (including each pre- and post-effective amendment
thereto) and exhibits thereto, any Issuer Free Writing Prospectus, each Preliminary Prospectus, the
Prospectus and any amendment or supplement to the Prospectus, including all fees, disbursements and
other charges of counsel to the Company, (2) the preparation and delivery of the Warrants and the
certificates representing the Shares, (3) furnishing (including costs of shipping and mailing) such
copies of the Registration Statement (including all pre- and post-effective amendments thereto),
the Prospectus, any Preliminary Prospectus and any Issuer Free Writing Prospectus, and all
amendments and supplements to the Prospectus, as may be reasonably requested for use in connection
with the direct placement of the Units, (4) the listing of the Common Stock on The Nasdaq Capital
Market or NYSE Amex Equities, (5) any filings required to be made by the Placement Agent with
FINRA, and the fees, disbursements and other charges of counsel for the Placement Agent in
connection therewith up to a maximum of $49,999, (6) the registration or qualification of the Securities for offer and sale
under the securities or Blue Sky laws of such jurisdictions designated pursuant to Section 5(j),
including the reasonable 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, (7) fees, disbursements and other charges of counsel to the Company, and (8) fees
and disbursements of the Accountants incurred in delivering the Comfort Letters described in 9(g)
of this Agreement. For the avoidance of doubt, the Selling Stockholder will not be liable for the
payment of any of the costs and expenses incident to the performance of the obligations of the
Company under this Agreement unless otherwise agreed by it. Subject to compliance with FINRA Rule
5110(f)(2)(D), in addition to the expenses set forth in this Section 7, the Company also agrees to
reimburse the Placement Agent’s out-of-pocket accountable expenses actually incurred by the
Placement Agent or persons associated with the Placement Agent (with supporting invoices/receipts)
up to a maximum of $125,000. Such reimbursement shall be payable immediately upon the Closing, or
if the Closing does not occur, upon termination of the Agreement. Placement Agent acknowledges the
receipt of an advance of $25,000 against such expenses. In the event the Offering is terminated
prior to Closing, such advance will be returned to the Company to the extent expenses have not
actually been incurred by the Placement Agent.
8. Conditions of the Obligations of the Placement Agent. The obligations of the
Placement Agent hereunder are subject to the following conditions:
(a) (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 any
securities or other governmental authority (including, without limitation, the Commission),
(ii) no order suspending the effectiveness of the Registration Statement or the
qualification or registration of the Securities 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 any securities or other governmental authority (including,
without limitation, the Commission), (iii) any request for additional information on the
part of the staff of any securities or other governmental authority (including, without
limitation, the Commission) shall have been complied with to the satisfaction of the staff
of the Commission or such authorities and (iv) after the date hereof no amendment or
supplement to the Registration Statement, any Issuer Free Writing Prospectus or the
Prospectus shall have been filed unless a copy thereof was first submitted to the Placement
Agent and the
18
Placement Agent did not object thereto in good faith on a timely basis, and the
Placement Agent shall have received certificates of the Company, dated as of the Closing
Date and signed by the President and Chief Executive Officer or the Chairman of the Board of
Directors of the Company, and the Chief Financial Officer of the Company, to the effect of
clauses (i), (ii) and (iii).
(b) Since the respective dates as of which information is given in the Registration
Statement and the Prospectus, (i) there shall not have been a Material Adverse Effect,
whether or not arising from transactions in the ordinary course of business, in each case
other than as set forth in or contemplated by the Registration Statement and the Prospectus
and (ii) the Company shall not have sustained any material loss or interference with its
business or properties from fire, explosion, flood or other casualty, whether or not covered
by insurance, or from any labor dispute or any court or legislative or other governmental
action, order or decree, which is not set forth in the Registration Statement and the
Prospectus, if in the judgment of the Placement Agent any such development makes it
impracticable or inadvisable to consummate the sale and delivery of the Units to Investors
at the public offering price.
(c) Since the respective dates as of which information is given in the Registration
Statement and the Prospectus, there shall have been no litigation or other proceeding
instituted against the Company or any of its officers or directors in their capacities as
such, before or by any Federal, state or local court, commission, regulatory body,
administrative agency or other governmental body, domestic or foreign, which litigation or
proceeding is reasonably expected by management to have a Material Adverse Effect.
(d) Each of the representations and warranties of the Company contained herein shall be
true and correct in all material respects at the Closing Date, as if made on such date, and
all covenants and agreements herein contained to be performed on the part of the Company and
all conditions herein contained to be fulfilled or complied with by the Company at or prior
to the Closing Date shall have been duly performed, fulfilled or complied with in all
material respects.
(e) The Placement Agent shall have received an opinion, dated as of the Closing Date,
of Womble, Carlyle, Xxxxxxxxx & Xxxx, as counsel to the Company, in form and substance
reasonably satisfactory to the Placement Agent.
(f) The Placement Agent shall have received an opinion, dated as of the Closing Date,
of intellectual property counsel to the Company, in form and substance reasonably
satisfactory to the Placement Agent.
(g) The Placement Agent shall have received a negative assurance letter, dated as of
the Closing Date, of Xxxxxxxxx Xxxxx Xxxxxxx & Xxxxx, as counsel to the Placement Agent, in
customary form.
(h) At the Closing Date, each of Xxxxxx Xxxxxx Xxxxx LLP and Xxxxx, Xxxxxx & Xxxxxx,
LLC shall have furnished to the Placement Agent a letter, dated the date of its delivery
(each, a “Comfort Letter”), addressed to the Placement Agent and in form and substance
satisfactory to the Placement Agent, confirming that (i) they are independent public
accountants with respect to the Company within the meaning of the Act and the Rules
19
and Regulations; (ii) in their opinion, the financial statements and any supplementary
financial information included in the Registration Statement and examined by them comply as
to form in all material respects with the applicable accounting requirements of the Act and
the Rules and Regulations; (iii) on the basis of procedures, not constituting an examination
in accordance with generally accepted auditing standards, set forth in detail in the Comfort
Letter, a reading of the latest available interim financial statements of the Company,
inspections of the minute books of the Company since the latest audited financial statements
included in the Prospectus, inquiries of officials of the Company responsible for financial
and accounting matters and such other inquiries and procedures as may be specified in the
Comfort Letter to a date not more than five days prior to the date of the Comfort Letter,
nothing came to their attention that caused them to believe that: (A) as of a specified date
not more than three days prior to the date of the Comfort Letter, there have been any
changes in the capital stock of the Company or any increase in the long-term debt of the
Company, or any decreases in net current assets or net assets or other items specified by
the Placement Agent, or any increases in any items specified by the Placement Agent, in each
case as compared with amounts shown in the latest balance sheet included in the Prospectus,
except in each case for changes, increases or decreases which the Prospectus discloses have
occurred or may occur or which are described in the Comfort Letter; and (B) for the period
from the date of the latest financial statements included in the Prospectus to the specified
date referred to in clause (A), there were any decreases in revenues or the total or per
share amounts of net loss or other items specified by the Placement Agent, or any increases
in any items specified by the Placement Agent, in each case as compared with the comparable
period of the preceding year and with any other period of corresponding length specified by
the Placement Agent, except in each case for decreases or increases which the Prospectus
discloses have occurred or may occur or which are described in the Comfort Letter; and (iv)
in addition to the examination referred to in their reports included in the Prospectus and
the procedures referred to in clause (iii) above, they have carried out certain specified
procedures, not constituting an examination in accordance with generally accepted auditing
standards, with respect to certain amounts, percentages and financial information specified
by the Placement Agent, which are derived from the general accounting, financial or other
records of the Company, as the case may be, which appear in the Prospectus or in Part II of,
or in exhibits or schedules to, the Registration Statement, and have compared such amounts,
percentages and financial information with such accounting, financial and other records and
have found them to be in agreement.
(i) At the Closing Date, there shall be furnished to the Placement Agent a certificate,
dated the date of its delivery, signed 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 each signer has carefully examined the Registration Statement and that to
each of such person’s knowledge:
(i) (A) As of the date of such certificate, (x) the Registration Statement does
not contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements therein
not misleading and (y) neither the Prospectus nor the Pricing Disclosure Materials
contains any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements therein,
in light of the circumstances under which they were made, not misleading and (B) 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 in
any material respect.
20
(ii) Each of the representations and warranties of the Company contained in
this Agreement were, when originally made, and are, at the time such certificate is
delivered, true and correct in all material respects.
(iii) Each of the covenants required herein to be performed by the Company on
or prior to the date of such certificate has been duly, timely and fully performed
and each condition herein required to be complied with by the Company on or prior to
the delivery of such certificate has been duly, timely and fully complied with.
(iv) No stop order suspending the effectiveness of the Registration Statement
or of any part thereof has been issued and no proceedings for that purpose have been
instituted or are contemplated by the Commission.
(v) Subsequent to the date of the most recent financial statements in the
Prospectus, there has been no Material Adverse Effect.
(j) The Securities shall be qualified for sale, if required, in such states as the
Placement Agent may reasonably and timely request, and each such qualification shall be in
effect and not subject to any stop order or other proceeding on the Closing Date; 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 to take any action which would subject it
to taxation or general service of process in any jurisdiction where it is not now so
subject.
(k) The Company shall have furnished or caused to be furnished to the Placement Agent
such certificates, in addition to those specifically mentioned herein, as the Placement
Agent may have reasonably and timely requested as to the accuracy and completeness at the
Closing Date of any statement in the Registration Statement or the Prospectus, as to the
accuracy at the Closing Date of the representations and warranties of the Company as to the
performance by the Company of its obligations hereunder, or as to the fulfillment of the
conditions concurrent and precedent to the obligations hereunder of the Placement Agent.
(l) The Shares and Warrant Shares shall have been approved for listing, subject to
issuance, on NYSE Amex Equities.
(m) Units representing an aggregate purchase price of at least $5 million shall have
been issued and sold under the Registration Statement in connection with the Offering.
9. Conditions of the Obligations of the Company and Selling Stockholder. The
obligations of the Company and the Selling Stockholder hereunder are subject to the following
conditions:
(a) (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 any
securities or other governmental authority (including, without limitation, the Commission),
(ii) no order suspending the effectiveness of the Registration Statement or
21
the qualification or registration of the Securities 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 any securities or other governmental
authority (including, without limitation, the Commission) and (iii) any request for
additional information on the part of the staff of any securities or other governmental
authority (including, without limitation, the Commission) shall have been complied with to
the satisfaction of the staff of the Commission or such authorities.
(b) The Securities shall be qualified for sale, if required, in such states as the
Placement Agent may reasonably and timely request, and each such qualification shall be in
effect and not subject to any stop order or other proceeding on the Closing Date; 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 to take any action which would subject it
to taxation or general service of process in any jurisdiction where it is not now so subject
(c) The Shares and Warrant Shares shall have been approved for listing, subject to
issuance, on NYSE Amex Equities.
(d) Units representing an aggregate purchase price of at least $5 million shall have
been issued and sold under the Registration Statement in connection with the Offering.
10. Indemnification.
(a) The Company shall indemnify and hold harmless the Placement Agent, the directors,
officers, employees and agents of the Placement Agent and each person, if any, who controls
the Placement Agent within the meaning of Section 15 of the Act or Section 20 of the
Securities Exchange Act of 1934, as amended (the “Exchange Act”), from and against any and
all losses, claims, liabilities, expenses and damages, joint or several, (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 it, or any of them, may become subject under the 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 (i) any untrue statement or
alleged untrue statement made by the Company in Section 3 of this Agreement, (ii) any untrue
statement or alleged untrue statement of any material fact contained in (A) any Preliminary
Prospectus, the Registration Statement or the Prospectus or any amendment or supplement to
the Registration Statement or the Prospectus, (B) any Issuer Free Writing Prospectus or any
amendment of supplement thereto, or (C) any Permitted Issuer Information used or referred to
in any “free writing prospectus” (as defined under Rule 405 under the Act) used or referred
to by the Placement Agent and (D) any application or other document, or any amendment or
supplement thereto, executed by the Company based upon written information furnished by or
on behalf of the Company filed in any jurisdiction in order to qualify the Securities under
the securities or Blue Sky laws thereof or filed with the Commission or any securities
association or securities exchange (each, an “Application”), or (iii) the omission or
alleged omission to state in any Preliminary Prospectus, the Registration Statement, the
Prospectus or any Issuer Free Writing Prospectus, or any amendment or supplement thereto, or
in any Permitted Issuer Information or any Application a material fact required to be stated
therein or necessary to make the statements therein, in light of the circumstances in which
they were made, not misleading; provided, however, that the Company will not be liable to
the extent
22
that such loss, claim, liability, expense or damage arises from the sale of the Units
in the public offering to any person and is based solely on an untrue statement or omission
or alleged untrue statement or omission made in reliance on and in conformity with
information relating to the Placement Agent furnished in writing to the Company by the
Placement Agent expressly for inclusion in the Registration Statement, any Preliminary
Prospectus, the Prospectus, any Issuer Free Writing Prospectus or in any amendment or
supplement thereto or in any Permitted Issuer Information or any Application. This
indemnity agreement will be in addition to any liability which the Company may otherwise
have. The Company will not, without the prior written consent of the Placement Agent (which
will not be unreasonably withheld), settle or compromise or consent to the entry of any
judgment in any pending or threatened claim, action, suit or proceeding in respect of which
indemnification may be sought hereunder (whether or not the Placement Agent or any person
who controls the Placement Agent within the meaning of Section 15 of the Act or Section 20
of the Exchange Act is a party to each claim, action, suit or proceeding), unless such
settlement, compromise or consent includes an unconditional release of the Placement Agent
and each such controlling person from all liability arising out of such claim, action, suit
or proceeding.
(b) The Selling Stockholder shall indemnify and hold harmless the Placement Agent, the
directors, officers, employees and agents of the Placement Agent and each person, if any,
who controls the Placement Agent within the meaning of Section 15 of the Act or Section 20
of the Exchange Act, from and against any and all losses, claims, liabilities, expenses and
damages, joint or several, (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 it, or any of them, may become subject
under the 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 made by the Selling
Stockholder in Section 4 of this Agreement. This indemnity agreement will be in addition to
any liability which the Selling Stockholder may otherwise have. The Selling Stockholder
will not, without the prior written consent of the Placement Agent (which will not be
unreasonably withheld), settle or compromise or consent to the entry of any judgment in any
pending or threatened claim, action, suit or proceeding in respect of which indemnification
may be sought hereunder (whether or not the Placement Agent or any person who controls the
Placement Agent within the meaning of Section 15 of the Act or Section 20 of the Exchange
Act is a party to each claim, action, suit or proceeding), unless such settlement,
compromise or consent includes an unconditional release of the Placement Agent and each such
controlling person from all liability arising out of such claim, action, suit or proceeding.
The indemnification obligation of the Selling Stockholder under this Section 10 shall not
exceed the aggregate total net proceeds from the offering received by the Selling
Stockholder.
(c) The Placement Agent will indemnify and hold harmless the Company, the Selling
Stockholder, each person, if any, who controls the Company or the Selling Stockholder within
the meaning of Section 15 of the Act or Section 20 of the Exchange Act, each director of the
Company and each officer of the Company who signs the Registration Statement to the same
extent as the foregoing indemnity from the Company to the Placement Agent, but only insofar
as 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 the Placement Agent furnished in writing to the
Company by the Placement Agent expressly for use in the Registration
23
Statement, any Preliminary Prospectus, the Prospectus or any Issuer Free Writing
Prospectus. This indemnity agreement will be in addition to any liability that the
Placement Agent might otherwise have. The Company and the Selling Stockholder acknowledge
that, for all purposes under this Agreement, the statements set forth under the heading
“Plan of Distribution” in any Preliminary Prospectus and 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 the Registration Statement, any Preliminary
Prospectus, the Prospectus or any Issuer Free Writing Prospectus.
(d) Any party that proposes to assert the right to be indemnified under this Section 10
will, 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 10, notify each such indemnifying party of the commencement of such action,
enclosing 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 10 unless, and only to the extent that, such omission
results in the forfeiture of substantive rights or defenses by the indemnifying party. If
any such action is brought against any indemnified party and it notifies the indemnifying
party of its commencement, the indemnifying party will be entitled to participate in and, to
the extent that it elects by delivering written notice to the indemnified party promptly
after receiving notice of the commencement of the action from the indemnified party, jointly
with any other indemnifying party similarly notified, to assume the defense of the action,
with counsel reasonably satisfactory to the indemnified party, and 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
subsequently 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 (1) the employment of counsel by the indemnified party has been authorized in
writing by the indemnifying party, (2) the indemnified party has reasonably concluded (based
on advice of counsel) that a conflict exists (based on advice of counsel to the indemnified
party) between the indemnified party and the indemnifying party that would prevent the
counsel selected by the indemnifying party from representing the indemnified 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 (3) the indemnifying party has not in fact employed
counsel to assume the defense of such action within a reasonable time after receiving notice
of the commencement of the action, in each of which cases the reasonable fees, disbursements
and other charges of counsel will be at the expense of the indemnifying party or parties.
It is understood that the indemnifying party or parties shall not, in connection with any
proceeding or related proceedings in the same jurisdiction, be liable for the reasonable
fees, disbursements and other charges of more than one separate firm admitted to practice in
such jurisdiction at any one time for all such indemnified party or parties. All such fees,
disbursements and other charges will be reimbursed by the indemnifying party promptly as
they are incurred. Neither the Company nor the Selling Stockholder will, without the prior
written consent of the Placement Agent (which consent will not be unreasonably withheld),
settle or compromise or consent to the entry of any judgment in any pending or threatened
claim, action, suit or proceeding in respect of which indemnification has been sought
hereunder (whether or not such Placement Agent or any person who controls the Placement
Agent within the meaning of Section 15 of
24
the Act or Section 20 of the Exchange Act is a party to such claim, action, suit or
proceeding), unless such settlement, compromise or consent includes an unconditional release
of such Placement Agent and each such controlling person from all liability arising out of
such claim, action, suit or proceeding. 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).
(e) In order to provide for just and equitable contribution in circumstances in which
the indemnification provided for in the foregoing paragraphs of this Section 10 is
applicable in accordance with its terms but for any reason is held to be unavailable from
the Company, the Selling Stockholder or the Placement Agent, the Company, the Selling
Stockholder and the Placement Agent will contribute to the total losses, claims,
liabilities, expenses and damages (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 or the Selling Stockholder from persons other than the Placement Agent such as
persons who control the Company within the meaning of the Act or the Exchange Act, officers
of the Company who signed the Registration Statement and directors of the Company, who also
may be liable for contribution) to which the Company, the Selling Stockholder and the
Placement Agent may be subject in such proportion as shall be appropriate to reflect the
relative benefits received by the Company and the Selling Stockholder, on the one hand, and
the Placement Agent on the other. The relative benefits received by the Company on the one
hand and the Placement Agent on the other shall be deemed to be in the same proportion as
the total net proceeds from the offering (before deducting Company expenses) received by the
Company and the Selling Stockholder as set forth in the table on the cover page of the
Prospectus bear to the fee received by the Placement Agent hereunder. 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 and the Selling Stockholder, on the one hand, and the Placement Agent on the
other, with respect to the statements or omissions which 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, the Selling Stockholder, or the Placement Agent, the intent of the parties and
their relative knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Company, the Selling Stockholder and the Placement Agent agree
that it would not be just and equitable if contributions pursuant to this Section 10(d) were
to be determined by pro rata allocation or by any other method of allocation which 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 10(d) shall be
deemed to include, for purpose of this Section 10(d), any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Section 10(d), the Placement Agent
shall not be required to contribute any amount in excess of the fee received by it, and no
person found guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Act) will be entitled to contribution from any person who
25
was not guilty of such fraudulent misrepresentation. For purposes of this Section
10(d), any person who controls a party to this Agreement within the meaning of the Act or
the Exchange 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 such party in respect of which a claim for contribution may be made under this
Section 10(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 10(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).
11. Termination. The obligations of the Placement Agent under this Agreement may be
terminated at any time prior to the Closing Date, by notice to the Company from the Placement
Agent, without liability on the part of the Placement Agent to the Company if, prior to delivery
and payment for the Units, in the sole judgment of the Placement Agent (i) trading in the Common
Stock of the Company shall have been suspended by the Commission or by the OTC Bulletin Board or
NYSE Amex Equities, as applicable, (ii) trading in securities generally on the OTC Bulletin Board
or NYSE Amex Equities, as applicable, shall have been suspended or limited or minimum or maximum
prices shall have been generally established on any of such exchanges, or additional material
governmental restrictions, not in force on the date of this Agreement, shall have been imposed upon
trading in securities generally by any of such exchanges or by order of the Commission or any court
or other governmental authority, (iii) a general banking moratorium shall have been declared by
Federal or New York State authorities, or (iv) any material adverse change in the financial or
securities markets in the United States or any new outbreak or material escalation of hostilities
or declaration by the United States of a national emergency or war or other calamity or crisis
shall have occurred, the effect of any of which is such as to make it, in the sole judgment of the
Placement Agent, impracticable or inadvisable to market the Units on the terms and in the manner
contemplated by the Prospectus.
12. No Fiduciary Duty. The Company and the Selling Stockholder acknowledge and agree
that in connection with the offering and sale of the Units or any other services the Placement
Agent may be deemed to be providing hereunder, notwithstanding any preexisting relationship,
advisory or otherwise, between the parties or any oral representations or assurances previously or
subsequently made by the Placement Agent: (i) no fiduciary or agency relationship between the
Company, the Selling Stockholder and any other person, on the one hand, and the Placement Agent, on
the other, exists; (ii) the Placement Agent is not acting as an advisor, expert or otherwise, to
the Company or the Selling Stockholder, including, without limitation, with respect to the
determination of the offering price of the Units, and such relationship between the Company and the
Selling Stockholder, on the one hand, and the Placement Agent, on the other, is entirely and solely
commercial, based on arms-length negotiations; (iii) any duties and obligations that the Placement
Agent may have to the Company or the Selling Stockholder shall be limited to those duties and
obligations specifically stated herein; and (iv) the Placement Agent and its affiliates may have
interests that differ from those of the Company and the Selling Stockholder. The Company and the
Selling Stockholder hereby waive any claims that the Company and the Selling Stockholder,
respectively, may have against the Placement Agent with respect to any breach of fiduciary duty in
connection with this offering.
26
13. Third Party Beneficiaries. The parties acknowledge and agree that the Investors
shall be third party beneficiaries to this Agreement.
14. Notices. All notices, requests, consents and other communications hereunder will
be in writing, will be mailed (a) if within the domestic United States by first-class registered or
certified airmail, or nationally recognized overnight express courier, postage prepaid, or by
facsimile or (b) if delivered from outside the United States, by International Federal Express or
facsimile, and (c) will be deemed given (i) if delivered by first-class registered or certified
mail domestic, three business days after so mailed, (ii) if delivered by nationally recognized
overnight carrier, one business day after so mailed, (iii) if delivered by International Federal
Express, two business days after so mailed and (iv) if delivered by facsimile, upon electric
confirmation of receipt and will be delivered and addressed as follows: (a) if to Emory University,
at Administration Building, 000 Xxxxxx Xxxxx, Xxxxxxx, Xxxxxxx 00000, (b) if to the Company, at the
office of the Company, GeoVax Labs, Inc., 0000 Xxxx Xxxx Xxxxx, Xxxxx 000, Xxxxxx, Xxxxxxx, 00000,
Attention: Chief Executive Officer or (b) if to the Placement Agent, 000 Xxxxxxx Xxxxxx, Xxxxx
0000, Xxx Xxxxxxx, Xxxxxxxxx 00000, Attention: Xxxx Xxxxxxxx.
15. Survival. The respective representations, warranties, agreements, covenants,
indemnities and other statements of the Company, the Selling Stockholder and the Placement Agent
set forth in this Agreement or made by or on behalf of them, respectively, pursuant to this
Agreement shall remain in full force and effect, regardless of (i) any investigation made by or on
behalf of the Company, any of its officers or directors, the Selling Stockholder, the Placement
Agent or any controlling person referred to in Section 10 hereof and (ii) delivery of and payment
for the Units and the Shares. The respective agreements, covenants, indemnities and other
statements set forth in Sections 5, 6, and 10 hereof shall remain in full force and effect,
regardless of any termination or cancellation of this Agreement.
16. Successors. This Agreement shall inure to the benefit of and shall be binding
upon the Placement Agent, the Selling Stockholder, the Company and their respective successors and
legal representatives, and nothing expressed or mentioned in this Agreement is intended or shall be
construed to give any other person any legal or equitable right, remedy or claim under or in
respect of this Agreement, or any provisions herein contained, this Agreement and all conditions
and provisions hereof being intended to be and being for the sole and exclusive benefit of such
persons and for the benefit of no other person except that (i) the indemnification and contribution
contained in Sections 10(a) and (d) of this Agreement shall also be for the benefit of the
directors, officers, employees and agents of the Placement Agent and any person or persons who
control the Placement Agent within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act and (ii) the indemnification and contribution contained in Sections 10(b) and (d) of
this Agreement shall also be for the benefit of the directors of the Company, the officers of the
Company who have signed the Registration Statement and any person or persons who control the
Company within the meaning of Section 15 of the Act or Section 20 of the Exchange Act.
17. Applicable Law. All questions concerning the construction, validity, enforcement
and interpretation of this Agreement shall be governed by and construed and enforced in accordance
with the internal laws of the State of Delaware, without regard to the principles of conflicts of
law thereof. Each party other than Emory University agrees that all legal proceedings concerning the interpretation,
enforcement and defense of the transactions contemplated by this Agreement (whether brought against
a party hereto or its respective affiliates, directors, officers, shareholders, employees or
agents) shall be commenced exclusively in the state and federal courts sitting in the City of
Wilmington, Delaware. Each party
27
other than Emory University hereby irrevocably submits to the exclusive jurisdiction of the
state and federal courts sitting in the City of Wilmington, Delaware for the adjudication of any
dispute hereunder or in connection herewith or with any transaction contemplated hereby or
discussed herein (including with respect to the enforcement of this Agreement), and hereby
irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it
is not personally subject to the jurisdiction of any such court, that such suit, action or
proceeding is improper or is an inconvenient venue for such proceeding. Each party other than
Emory University hereby irrevocably waives personal service of process and consents to process
being served in any such suit, action or proceeding by mailing a copy thereof via registered or
certified mail or overnight delivery (with evidence of delivery) to such party at the address in
effect for notices to it under this Agreement and agrees that such service shall constitute good
and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to
limit in any way any right to serve process in any other manner permitted by law. If any party
shall commence an action or proceeding to enforce any provisions of this Agreement, then the
prevailing party in such action or proceeding shall be reimbursed by the non-prevailing party for
its reasonable attorneys’ fees and other costs and expenses incurred with the investigation,
preparation and prosecution of such action or proceeding.
18. Counterparts. This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute one and the same
instrument.
19. Entire Agreement. This Agreement constitutes the entire understanding between the
parties hereto as to the matters covered hereby and supersedes all prior understandings, written or
oral, relating to such subject matter, including the engagement letter dated February 2, 2010 by
and between the Company and the Placement Agent (the “Engagement Letter”), except Section 10
thereof; provided, however, the matters set out under “Indemnity” shall be superseded by this
Agreement with respect to the transactions contemplated herein to the extent the indemnification
provided in Section 10 of this Agreement would be enforceable with respect thereto.
Notwithstanding anything to the contrary contained in the Engagement Letter, Section 5 thereof is
hereby terminated and of no further force or effect.
[Signature Page Follows]
28
Please confirm that the foregoing correctly sets forth the agreement between the Company, the
Selling Stockholder and the Placement Agent.
Very truly yours, “THE COMPANY” GEOVAX LABS, INC. |
||||
By: | ||||
Name: | Xxxx Xxxxxxxx | |||
Title: | Chief Financial Officer | |||
“THE SELLING STOCKHOLDER” EMORY UNIVERSITY |
||||
By: | ||||
Name: | ||||
Title: | Attorney-in-Fact | |||
Confirmed as of the date first above mentioned: “THE PLACEMENT AGENT” GLOBAL HUNTER SECURITIES LLC |
||||
By: | ||||
Name: | ||||
Title: | ||||
SCHEDULE 1
FREE WRITING PROSPECTUS
None.
SCHEDULE 2
SUBSIDIARIES
GeoVax, Inc.
EXHIBIT A
FORM OF WARRANT
EXHIBIT B
FORM OF SUBSCRIPTION AGREEMENT