2,400,000 Shares of Common Stock ELECTRO-OPTICAL SCIENCES, INC. PLACEMENT AGENCY AGREEMENT
Exhibit 1.1
Execution Copy
2,400,000 Shares of Common Stock
ELECTRO-OPTICAL SCIENCES, INC.
July 16, 2009
Xxxxxxx & Company, LLC
Xxxxxxxxxxx & Co. Inc.
c/o Needham & Company, LLC
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Xxxxxxxxxxx & Co. Inc.
c/o Needham & Company, LLC
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Ladies and Gentlemen:
1. Introductory. Electro-Optical Sciences, Inc., a Delaware corporation (the “Company”),
proposes, pursuant to the terms of this Placement Agency Agreement (this “Agreement”) and the
Subscription Agreements in the form of Exhibit A attached hereto (the “Subscription
Agreements”) entered into with the purchasers identified therein (each a “Purchaser” and
collectively, the “Purchasers”), to sell to the Purchasers up to an aggregate of 2,400,000 shares
(each, a “Share,” collectively, the “Shares”) of common stock, par value $0.001 per share (the
“Common Stock”) of the Company. The Company hereby confirms its agreement with Xxxxxxx & Company,
LLC (“Xxxxxxx”) and Xxxxxxxxxxx & Co. Inc. (“Opco”) to act as sole Placement Agents (each a
“Placement Agent” and, together, the “Placement Agents”) in accordance with the terms and
conditions hereof as set forth below. Xxxxxxx is acting as the representative of the Placement
Agents and in such capacity is hereinafter referred to as the “Representative.”
2. Agreement to Act as Placement Agents; Placement of Shares. On the basis of the
representations, warranties and agreements of the Company herein contained, and subject to all the
terms and conditions of this Agreement:
(a) The Company engages the Placement Agents to act as its exclusive agents, on a best
efforts basis, to solicit offers for the purchase of all or part of the Shares from the
Company (the “Offering”). Until the Closing Date (defined below) or the termination of this
Agreement in accordance with Section 13, the Company shall not, without the prior consent of
the Representative, solicit or accept offers to purchase Shares (other than pursuant to the
exercise of options or warrants to purchase shares of Common Stock that are outstanding as
of the date hereof) otherwise than through the Placement Agents.
(b) The Company hereby acknowledges that the Placement Agents have severally agreed, as
agents of the Company, to use their respective commercially reasonable best efforts to
solicit offers to purchase the Shares from the Company on the terms and subject to the
conditions set forth in the Prospectus (as defined below). The Placement Agents shall use
their respective commercially reasonable efforts to assist the Company in obtaining
performance by each Purchaser whose offer to purchase Shares has been solicited by the
Placement Agents and accepted by the Company, but the Placement Agents shall not have any
liability to the Company in the event any such purchase is not consummated for any reason.
Under no circumstances will any Placement Agent be obligated to underwrite or purchase any
Shares for its own account and, in soliciting purchases of Shares, each Placement Agent
shall act solely as the Company’s agent and not as principal. Notwithstanding the foregoing
and except as otherwise provided in
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Section 2(c), it is understood and agreed that a Placement Agent (or its affiliates) may,
solely at its discretion and without any obligation to do so, purchase Shares as a principal
to the extent any such purchase of Shares is properly disclosed in the General Disclosure
Package (defined in Section 4(a), below) in the manner required by the Securities Laws (as
defined below) and provided that such purchase of Shares is made in compliance with
applicable Securities Laws.
(c) Subject to the provisions of this Section 2, offers for the purchase of Shares may
be solicited by the Placement Agents as agents for the Company at such times and in such
amounts as the Placement Agents deem advisable. Each Placement Agent shall communicate to
the Company, orally or in writing, each reasonable offer to purchase Shares received by it
as agent of the Company. The Company shall have the sole right to accept offers to purchase
the Shares and may reject any such offer, in whole or in part. Each Placement Agent shall
have the right, in its discretion reasonably exercised, without notice to the Company, to
reject any offer to purchase Shares received by it, in whole or in part, and any such
rejection shall not be deemed a breach of its agreement contained herein.
(d) The Shares are being sold to the Purchasers at a price of $6.25 per Share. The
purchases of the Shares by the Purchasers shall be evidenced by the execution of
Subscription Agreements by each of the Purchasers and the Company.
(e) As compensation for services rendered, on the Closing Date (as defined below), the
Company shall pay to the Placement Agents by wire transfer of immediately available funds to
an account or accounts designated by the Representative an aggregate fee (the “Placement
Fee”) equal to seven percent (7.0%) of the gross proceeds received by the Company from the
sale of the Shares on such Closing Date.
(f) At the Closing Date, the Company shall wire to an account or accounts designated by
the Representative (i) the Placement Fee and (ii) the expenses reimbursable to the Placement
Agents under Section 5(l) below.
(g) No Shares which the Company has agreed to sell pursuant to this Agreement and the
Subscription Agreements shall be deemed to have been purchased and paid for, or sold by the
Company, until such Shares shall have been delivered to the Purchaser thereof against
payment by such Purchaser. If the Company shall default in its obligations to deliver
Shares to a Purchaser whose offer it has accepted, the Company shall indemnify and hold each
of the Placement Agents harmless against any loss, claim, damage or expense arising from or
as a result of such default by the Company in accordance with the procedures set forth in
Section 8(c) herein.
3. Delivery and Payment. The closing of the offer and sale of the Shares (the “Closing”)
shall take place at 10:00 a.m., New York City time, on of before July 22, 2009, or at such other
time on such other date as may be agreed upon by the Company and the Representative (such date of
delivery and payment is hereinafter referred to as the “Closing Date”), at the office of Xxxxxxxxx
Xxxx XXX, 0000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx (xx at such other place as agreed upon by the
Representative and the Company). The cost of original issue tax stamps and other transfer taxes,
if any, in connection with the issuance and delivery of the Shares by the Company to the respective
Purchasers shall be borne by the Company. All actions taken at the Closing shall be deemed to have
occurred simultaneously.
4. Representations and Warranties of the Company. The Company represents and warrants to, and
agrees with, the Placement Agents and the Purchasers that:
(a) Filing and Effectiveness of Registration Statement; Certain Defined Terms. The
Company meets the requirements for the use of Form S-3 and a registration statement
(Registration No. 333-151935) on Form S-3 relating to the Shares, including a base
prospectus relating to the Shares (the “Base Prospectus”) and such amendments thereto as may
have been
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required to the date of this Agreement, has been prepared by the Company under the
provisions of the Securities Act of 1933, as amended, and the rules and regulations issued
thereunder (collectively, the “Securities Act”), has been filed with the Securities and
Exchange Commission (the “Commission”), and has been declared effective by the Commission,
and the Offering of the Shares complies with Rule 415 under the Securities Act. A final
prospectus supplement to the Base Prospectus relating to the Shares and the Offering thereof
will be filed promptly by the Company with the Commission in accordance with Rule 424(b)
under the Securities Act (such final prospectus supplement, as so filed, the “Prospectus
Supplement”). Such registration statement at any given time, including the amendments
thereto through such time, the exhibits and any schedules thereto at such time, the
documents otherwise deemed to be a part thereof or included therein under the Securities Act
(including Rule 430B thereof) is herein called the “Registration Statement.” The term
“preliminary prospectus” means any preliminary prospectus (including any preliminary
prospectus supplement) relating to the Shares and the Offering thereof as first filed with
the Commission pursuant to Rule 424(b) under the Securities Act (“Rule 424(b)”). The term
“Prospectus” means the Base Prospectus together with the Prospectus Supplement, except that
if such Base Prospectus is amended or supplemented on or prior to the date on which the
Prospectus Supplement was first filed pursuant to Rule 424(b), the term “Prospectus” shall
mean the Base Prospectus as so amended or supplemented and as supplemented by the Prospectus
Supplement. Any reference herein to the Registration Statement, the Base Prospectus, a
preliminary prospectus, the Prospectus Supplement, or the Prospectus shall be deemed to
refer to and include the documents incorporated by reference therein, and any reference
herein to the terms “amend,” “amendment” or “supplement” with respect to the Registration
Statement, the Base Prospectus, a preliminary prospectus, the Prospectus Supplement, or the
Prospectus shall be deemed to refer to and include the filing of any document under the
Securities Exchange Act of 1934, as amended, and the rules and regulations issued thereunder
(collectively, the “Exchange Act”), after the time the Registration Statement initially
became effective (the “Effective Date”). The term “Issuer Free Writing Prospectus” means any
“issuer free writing prospectus,” as defined in Rule 433 under the Securities Act (“Rule
433”), relating to the Shares that (i) is required to be filed with the Commission by the
Company or (ii) is exempt from filing pursuant to Rule 433(d)(5)(i) because it contains a
description of the Shares or of the offering that does not reflect the final terms, in each
case in the form filed or required to be filed with the Commission or, if not required to be
filed, in the form retained in the Company’s records pursuant to Rule 433(g).
No order preventing or suspending the use of the Base Prospectus, any preliminary
prospectus, the Prospectus Supplement, the Prospectus or any Issuer Free Writing Prospectus
has been issued by the Commission, and no stop order suspending the effectiveness of the
Registration Statement or any post-effective amendment thereto has been issued, and no
proceeding for that purpose has been initiated or threatened by the Commission. On the
Effective Date, on the date the Base Prospectus, any preliminary prospectus, the Prospectus
Supplement, or the Prospectus is first filed with the Commission pursuant to Rule 424(b) (if
required), at all times during the period through and including the Closing Date and when
any post-effective amendment to the Registration Statement becomes effective or any
amendment or supplement to the Prospectus is filed with the Commission, the Registration
Statement and the Prospectus (as amended or as supplemented if the Company shall have filed
with the Commission any amendment or supplement thereto), including the financial statements
included or incorporated by reference in the Prospectus, did and will comply with all
applicable provisions of the Securities Act and the Exchange Act and will contain all
statements required to be stated therein in accordance with the Securities Act and the
Exchange Act. As of the applicable effective date as to each part of the Registration
Statement, no part of the Registration Statement, the Prospectus or any such amendment or
supplement thereto did or will contain an untrue statement of a material
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fact or omit to state a material fact required to be stated therein or necessary in
order to make the statements therein not misleading. At the Effective Date, the date the
Base Prospectus or any amendment or supplement to the Base Prospectus, including any
preliminary prospectus or the Prospectus Supplement, is filed with the Commission, the date
of first use of any preliminary prospectus or the Prospectus Supplement, and at the Closing
Date the Prospectus did not and will not contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
As of the Applicable Time (as defined below), neither (x) any General Use Free Writing
Prospectus(as) (as defined below) issued at or prior to the Applicable Time, the Pricing
Prospectus (as defined below) and the documents (if any) listed on Schedule I
hereto, each as applicable, all considered together (collectively, the “General Disclosure
Package”), nor (y) any individual Limited Use Free Writing Prospectus, when considered
together with the General Disclosure Package, included any untrue statement of a material
fact or omitted to state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not misleading.
For purposes of this Agreement:
“Applicable Time” means 6:30 p.m. (Eastern Time) on the date of this Agreement.
“General Use Issuer Free Writing Prospectus” means any Issuer Free Writing Prospectus that
is intended for general distribution to prospective investors, as evidenced by its being so
specified in Schedule I to this Agreement.
“Limited Use Issuer Free Writing Prospectus” means any Issuer Free Writing Prospectus that
is not a General Use Issuer Free Writing Prospectus.
“Securities Laws” means, collectively, the Xxxxxxxx-Xxxxx Act of 2002, as amended, and the
rules and regulations issued thereunder (“Xxxxxxxx-Xxxxx”), the Securities Act, the Exchange
Act, the auditing principles, rules, standards and practices applicable to auditors of
“issuers” (as defined in Xxxxxxxx-Xxxxx) promulgated or approved by the Public Company
Accounting Oversight Board (United States) (“PCAOB”) and the rules of the NASDAQ Capital
Market (“NASDAQ CM”) and the American Stock Exchange.
“Pricing Prospectus” means the Base Prospectus, as amended or supplemented immediately prior
to the Applicable Time, including any document incorporated by reference therein and any
prospectus supplement deemed to be a part thereof. For purposes of this definition,
information contained in a form of prospectus that is deemed retroactively to be a part of
the Registration Statement pursuant to Rule 430B shall be considered to be included in the
Pricing Prospectus only if the actual time that form of prospectus is filed with the
Commission pursuant to Rule 424(b) is prior to the Applicable Time.
Each Issuer Free Writing Prospectus, as of its issue date and at all subsequent times
through the completion of the public offer and sale of the Shares or until any earlier date
that the issuer notified or notifies the Representative as described in the next sentence,
did not, does not and will not include any information that conflicted, conflicts or will
conflict with the information contained in the Registration Statement or the Prospectus,
including any document incorporated by reference therein that has not been superseded or
modified. If there occurs an event or development as a result of which the General
Disclosure Package would include an untrue statement of a material fact or would omit to
state a material fact necessary in order to make the statements therein, in the light of the
circumstances then prevailing, not misleading, the Company will promptly notify the
Placement Agents so that any use of the General Disclosure Package may cease until it is
amended or supplemented to correct any untrue statement or omission.
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The foregoing representations and warranties in this Section 4(a) do not apply to any
statements or omissions made in reliance on and in conformity with information relating to
the Placement Agents furnished in writing to the Company through the Representative by or on
behalf of any Placement Agent specifically for inclusion in the Registration Statement, the
Prospectus Supplement, the Pricing Prospectus, the Prospectus or any Issuer Free Writing
Prospectus or any amendment or supplement thereto. The Company acknowledges that (i) the
statements set forth in the last paragraph on the front cover page concerning the terms of
the Offering by the Placement Agents and (ii) the statements concerning the Placement Agents
contained in the first paragraph under the heading “Plan of Distribution” (the “Placement
Agents’ Information”) in the Prospectus Supplement and the Pricing Prospectus and the
Prospectus constitute the only information relating to the Placement Agents furnished in
writing to the Company through the Representative by or on behalf of any Placement Agent
specifically for inclusion in the Registration Statement, the Prospectus Supplement, the
Pricing Prospectus, the Prospectus and any Issuer Free Writing Prospectus or any amendment
or supplement thereto.
(b) Documents Incorporated by Reference. The documents that are incorporated by
reference in the Base Prospectus, any preliminary prospectus, the Pricing Prospectus and the
Prospectus or from which information is so incorporated by reference, when they became or
become effective or were or are filed with the Commission, as the case may be, complied or
will comply in all material respects with the requirements of the Securities Act or the
Exchange Act, as applicable; and any documents so filed and incorporated by reference
subsequent to the Effective Date shall, when they are filed with the Commission, comply in
all material respects with the requirements of the Securities Act or the Exchange Act, as
applicable. No such documents were filed with the Commission since the Commission’s close of
business on the business day immediately prior to the date of this Agreement and prior to
the execution of this Agreement.
(c) Ineligible Issuer Status. (i) At the earliest time after the filing of the
Registration Statement that the Company or another Offering participant made a bona fide
offer (within the meaning of Rule 164(h)(2)) of the Shares and (ii) at the date of this
Agreement, the Company was not and is not an “ineligible issuer,” as defined in Rule 405,
including (x) the Company or any subsidiary of the Company in the preceding three years not
having been convicted of a felony or misdemeanor or having been made the subject of a
judicial or administrative decree or order as described in Rule 405 and (y) the Company in
the preceding three years not having been the subject of a bankruptcy petition or insolvency
or similar proceeding, not having had a registration statement be the subject of a
proceeding under Section 8 of the Securities Act and not being the subject of a proceeding
under Section 8A of the Securities Act in connection with the Offering of the Shares, all as
described in Rule 405.
(d) Good Standing of the Company. The Company has been duly incorporated and is
existing and in good standing under the laws of the State of Delaware, with power and
authority (corporate and other) to own its properties and conduct its business as described
in the General Disclosure Package and the Prospectus; and the Company is duly qualified to
do business as a foreign corporation in good standing in all other jurisdictions in which
its ownership or lease of property or the conduct of its business requires such
qualification, except to the extent that the failure to be so qualified or be in good
standing (i) would not have, singly or in the aggregate, a material adverse effect on the
Company or its businesses, properties, business prospects, condition (financial or other) or
results of operations or (ii) impair in any material respect the ability of the Company to
perform its obligations under this Agreement or the Subscription Agreements or to consummate
any transactions contemplated by this Agreement, the Subscription Agreements, the General
Disclosure Package or the Prospectus (any such effect as described in clauses (i) or (ii),
is referred to herein as a “Material Adverse Effect”).
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(e) Subsidiaries. The Company has no subsidiary that is a “significant subsidiary” of
the Company within the meaning of Rule 1.01 of Regulation S-X under the Securities Act.
(f) Capital Stock. The Shares to be issued and sold by the Company to the Purchasers
under the Subscription Agreements and all other outstanding shares of capital stock of the
Company have been duly authorized; all outstanding shares of capital stock of the Company
are, and, when the Shares have been delivered and paid for in accordance with this Agreement
and the Subscription Agreements on the Closing Date, such Shares will have been, validly
issued, fully paid and nonassessable, will conform to the information in the General
Disclosure Package and to the description of such Shares contained in the Prospectus; the
stockholders of the Company have no statutory or contractual preemptive rights with respect
to its Common Stock; none of the outstanding shares of capital stock of the Company are or
will have been issued in violation of any statutory or contractual preemptive rights of any
security holder; and the authorized equity capitalization of the Company is as set forth in
the General Disclosure Package and the Prospectus. There are no authorized or outstanding
shares of capital stock, options, warrants, preemptive rights, rights of first refusal or
other rights to purchase, or equity or debt securities convertible into or exchangeable or
exercisable for, any capital stock of the Company or any of its subsidiaries other than
those described above or accurately described in the General Disclosure Package. The
description of the Company’s stock option, stock bonus and other stock plans or
arrangements, and the options or other rights granted thereunder, as described in the
General Disclosure Package and the Prospectus, accurately and fairly present the information
required to be shown with respect to such plans, arrangements, options and rights.
(g) No Finder’s Fee. There are no contracts, agreements or understandings between the
Company and any person that would give rise to a valid claim against the Company or the
Placement Agents for a brokerage commission, finder’s fee or other like payment.
(h) Financial Statements. The financial statements and schedules included or
incorporated by reference in the Registration Statement, the General Disclosure Package and
the Prospectus present fairly in all material respects the financial condition of the
Company as of the respective dates thereof and the results of operations and cash flows of
the Company for the respective periods covered thereby, all in conformity with generally
accepted accounting principles applied on a consistent basis throughout the entire period
involved. The financial statements, together with the related notes and schedules, included
or incorporated by reference in the General Disclosure Package and the Prospectus comply in
all material respects with the Securities Act and the Exchange Act. No other financial
statements or schedules of the Company are required by the Securities Act or the Exchange
Act to be included in the Registration Statement, the General Disclosure Package or the
Prospectus. Xxxxxx, LLP (the “Accountants”), who have reported on such financial statements
and schedules, and have audited the Company’s internal control over financial reporting and
management’s assessment thereof, are independent accountants with respect to the Company as
required by the Securities Act and Rule 3600T of the PCAOB. The summary and selected
financial data included in the Registration Statement present fairly in all material
respects the information shown therein and have been compiled on a basis consistent with the
audited financial statements presented in the Registration Statement.
(i) Absence of Material Changes. Subsequent to the respective dates as of which
information is given in the Registration Statement and the General Disclosure Package and
prior to or on the Closing Date, except as set forth in or contemplated by the Registration
Statement and the General Disclosure Package and the Prospectus, (i) neither the Company nor
any of its subsidiaries has sustained, since the date of the latest audited financial
statements included or incorporated by reference in the General Disclosure Package, any
material loss or interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor dispute or court or
governmental action, order or decree, otherwise
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than as set forth or contemplated in the General Disclosure Package; (ii) there has not
been and will not have been any change in the capitalization or long-term debt of the
Company or any of its subsidiaries (other than in connection with the exercise of
outstanding warrants or the grant or exercise of options to purchase the Common Stock
granted pursuant to the Company’s stock option plans from the shares reserved therefor, or
the issuance of shares under the Company’s existing employee stock purchase plan as
described in the Registration Statement), or any Material Adverse Effect arising for any
reason whatsoever, (iii) the Company has not incurred and will not incur, except in the
ordinary course of business as described in the General Disclosure Package and the
Prospectus, any material liabilities or obligations, direct or contingent, the Company has
not entered into and will not enter into, except in the ordinary course of business as
described in the General Disclosure Package, any material transactions other than pursuant
to this Agreement and the transactions referred to herein and (iv) the Company has not and
will not have paid or declared any dividends or other distributions of any kind on any class
of its capital stock.
(j) Not an Investment Company. The Company is not, will not become as a result of the
transactions contemplated hereby, 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, and the rules and regulations
issued thereunder (collectively, the “Investment Company Act”).
(k) Litigation. Except as set forth in the General Disclosure Package and Prospectus,
there are no actions, suits or proceedings pending or, to the knowledge of the Company,
threatened against or affecting the Company or against any of its officers in their capacity
as such, before or by any federal or state court, commission, regulatory body,
administrative agency or other governmental body, domestic or foreign, wherein an
unfavorable ruling, decision or finding would reasonably be expected to have a Material
Adverse Effect.
(l) Absence of Existing Defaults and Conflicts. The Company is not (i) in violation of
any provision of its certificate of incorporation or bylaws, (ii) in default in any respect,
and no event has occurred which, with notice or lapse of time or both, would constitute such
a default, in the due performance or observance of any indenture, contract, lease, mortgage,
deed of trust, note agreement, loan agreement or other agreement, obligation, condition,
covenant or instrument to which it is a party or by which it is bound or to which any of its
property or assets is subject, or (iii) in violation in any respect of any statute, law,
rule, regulation, ordinance, judgment, order or decree of any court, regulatory body,
administrative agency, governmental body, arbitrator or other authority having jurisdiction
over the Company or any of its properties, as applicable, except, with respect to clauses
(ii) and (iii), any violations or defaults which, individually or in the aggregate, would
not reasonably be expected to have a Material Adverse Effect.
(m) Absence of Further Requirements. No consent, approval, authorization or order of,
or any filing or declaration with, any court or governmental agency or body is required for
the consummation by the Company of the transactions on its part contemplated herein and in
the Subscription Agreements, including the offering and sale of the Shares, except such as
have been obtained under the Securities Act 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”) in connection with the Offering of the Shares.
(n) Authorization; Absence of Defaults and Conflicts Resulting from Transaction. The
Company has full corporate power and authority to enter into this Agreement, each of the
Subscription Agreements and that certain Escrow Agreement dated as of the date hereof by and
among the Company, the Placement Agents and the escrow agent named therein (the “Escrow
Agreement”) and to perform and to discharge its obligations hereunder and thereunder. Each
of
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this Agreement, the Subscription Agreements and the Escrow Agreement has been duly
authorized, executed and delivered by the Company. This Agreement, the Subscription
Agreements and the Escrow Agreement are valid and binding agreements of the Company,
enforceable against the Company in accordance with their respective terms, except to the
extent enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium
or similar laws affecting creditors’ rights generally and by general principles of equity.
The performance of each of this Agreement, the Subscription Agreements and the Escrow
Agreement and the consummation of the transactions contemplated hereby and thereby, will not
(i) result in the creation or imposition of any lien, charge or encumbrance upon any of the
assets of the Company pursuant to the terms or provisions of, or result in a breach or
violation of any of the terms or provisions of, or conflict with or constitute a default
under, or give any party a right to terminate any of its obligations under, or result in the
acceleration of any obligation under, (A) the certificate of incorporation or bylaws of the
Company, or (B) any indenture, mortgage, deed of trust, voting trust agreement, loan
agreement, bond, debenture, note agreement or other evidence of indebtedness, lease,
contract or other agreement or instrument to which the Company is a party or by which the
Company or any of its properties is bound or affected, except, in the case of clause (i)(B),
any lien, breach, violation, conflict, default or acceleration that, would not, individually
or in the aggregate, reasonably be expected to have a Material Adverse Effect, or (ii)
violate or conflict with any judgment, ruling, decree, order, statute, rule or regulation of
any court or other governmental agency or body applicable to the business or properties of
the Company.
(o) Consent and Approvals. Except for the registration of the Shares under the
Securities Act and such consents, approvals, authorizations, registrations or qualifications
as may be required under the Exchange Act and applicable state or foreign securities laws,
FINRA and the NASDAQ CM in connection with the offering and sale of the Shares by the
Company, no consent, approval, authorization or order of, or filing, qualification or
registration with, any court or governmental agency or body, foreign or domestic, which has
not been made, obtained or taken and is not in full force and effect, is required for the
execution, delivery and performance of this Agreement, the Subscription Agreements and the
Escrow Agreement by the Company, the offer or sale of the Shares or the consummation of the
transactions contemplated hereby or thereby.
(p) Title to Property. The Company has good and marketable title to all properties and
assets described in the General Disclosure Package and the Prospectus as owned by it, free
and clear of all liens, charges, encumbrances or restrictions, except such as are not
material to the business of the Company. The Company has valid, subsisting and enforceable
leases for the properties described in the General Disclosure Package and the Prospectus as
leased by it. The Company owns or leases all such properties as are necessary to its
operations as now conducted or as proposed to be conducted, except where the failure to so
own or lease would not reasonably be expected to have a Material Adverse Effect.
(q) Off Balance Sheet Interests and Contracts. There is no document, contract, permit
or instrument, affiliate transaction or off-balance sheet transaction (including, without
limitation, any “variable interests” in “variable interest entities,” as such terms are
defined in Financial Accounting Standards Board Interpretation No. 46) of a character
required to be described in the Registration Statement, the General Disclosure Package, the
Prospectus or to be filed as an exhibit to the Registration Statement that is not described
or filed as required. All such contracts that would be required to be described or filed as
set forth in the immediately preceding sentence 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 and by the Company in accordance with
the terms thereof, except to the extent
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enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting creditors’ rights generally and by general principles of equity.
(r) Offering Material; Stabilization. The Company has not distributed, and will not
distribute prior to the Closing Date, any offering material in connection with the offering
and sale of the Shares other than any preliminary prospectuses, any Permitted Free Writing
Prospectus (as defined in Section 5(b) below), the Pricing Prospectus, the Registration
Statement and other materials, if any, permitted by the Securities Act. Neither the Company
nor any of its directors, officers or controlling persons has taken, directly or indirectly,
any action designed, or that might reasonably be expected, to cause or result, under the
Securities Act or otherwise, in, or that has constituted, stabilization or manipulation of
the price of any security of the Company to facilitate the sale or resale of the Shares.
(s) Registration Rights. No holder of securities of the Company has rights to the
registration of any securities of the Company in connection with the Offering, which rights
have not been waived by the holder thereof as of the date hereof.
(t) Listing. The Common Stock is registered under Section 12(g) of the Exchange Act
and is traded on the NASDAQ CM. The Company is in material compliance with all applicable
corporate governance requirements set forth in the Nasdaq Market Place Rules that are
currently in effect. No consent, approval, authorization or order of, or filing,
notification or registration with, the NASDAQ CM is required for the listing and trading of
the Common Stock on the NASDAQ CM, except for (i) a Notification Form: Listing of Additional
Shares and (ii) a Notification Form: Change in the Number of Shares Outstanding.
(u) Possession of Intellectual Property. Except as specifically disclosed in the
General Disclosure Package and the Prospectus, (i) the Company owns or has adequate rights
to use all trademarks, trade names, domain names, patents, patent rights, copyrights,
technology, know-how (including trade secrets and other unpatented or unpatentable
proprietary or confidential information, systems or procedures), service marks, trade dress
rights, and other intellectual property (collectively, “Intellectual Property”) and has such
other licenses, approvals and governmental authorizations, in each case sufficient to
conduct its business as now conducted and as now proposed to be conducted, and to the
Company’s knowledge, none of the foregoing Intellectual Property rights owned or licensed by
the Company is invalid or unenforceable, (ii) the Company has no actual knowledge of any
infringement by it of Intellectual Property rights of others, where such infringement would
reasonably be expected to have a Material Adverse Effect, (iii) the Company is not aware of
any infringement, misappropriation or violation by others of, or conflict by others with
rights of the Company with respect to, any Intellectual Property that would reasonably be
expected to have a Material Adverse Effect, (iv) there is no claim being made against the
Company or, to the actual knowledge of the Company, any employee of the Company, regarding
Intellectual Property or other infringement that would reasonably be expected to have a
Material Adverse Effect, and (v) the Company has not received any written notice of
infringement with respect to any patent or any notice challenging the validity, scope or
enforceability of any Intellectual Property owned by or licensed to the Company, in each
case the loss of which patent or Intellectual Property (or loss of rights thereto) would
have a Material Adverse Effect.
(v) Taxes. The Company has filed all federal, state, local and foreign income tax
returns that have been required to be filed and has paid all taxes and assessments received
by it to the extent that such taxes or assessments have become due. The Company has no tax
deficiency that has been or, to the knowledge of the Company, might reasonably be asserted
or threatened against it that would reasonably be expected to have a Material Adverse
Effect.
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(w) Permits and Licenses. Except as set forth in the General Disclosure Package and
Prospectus and specifically represented in this Agreement, the Company owns or possesses all
authorizations, approvals, orders, licenses, registrations, other certificates and permits
of and from all governmental regulatory officials and bodies, necessary to conduct its
businesses as contemplated in the General Disclosure Package and the Prospectus, except
where the failure to own or possess all such authorizations, approvals, orders, licenses,
registrations, other certificates and permits would not reasonably be expected to have a
Material Adverse Effect. There is no proceeding pending or, to the Company’s knowledge,
threatened (or any basis therefor known to the Company) that may cause any such
authorization, approval, order, license, registration, certificate or permit to be revoked,
withdrawn, cancelled, suspended or not renewed; and the Company is conducting its business
in compliance with all laws, rules and regulations applicable thereto, except where such
noncompliance would not reasonably be expected to have a Material Adverse Effect.
(x) FCPA Compliance. The Company has not and, to the Company’s actual knowledge, none
of its employees or agents at any time during the last five years have (i) made any unlawful
contribution to any candidate for foreign 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.
(y) Internal Controls and Compliance with Xxxxxxxx-Xxxxx. The books, records and
accounts of the Company accurately and fairly reflect in all material respects, in
reasonable detail, the transactions in, and dispositions of, the assets of, and the results
of operations of, the Company. The principal executive officer and principal financial
officer of the Company have made all certifications required by Sections 302 and 906 of
Xxxxxxxx-Xxxxx and the rules and regulations promulgated in connection therewith with
respect to all reports, schedules, forms, statements and other documents required to be
filed by it with the Commission, and the statements contained in any such certification are
complete and correct. For purposes of the preceding sentence, “principal executive officer”
and “principal financial officer” shall have the meanings given to such terms in
Xxxxxxxx-Xxxxx. The Company maintains (x) systems of internal accounting controls
sufficient to provide reasonable assurances that (i) transactions are executed in accordance
with management’s general or specific authorizations, (ii) transactions are recorded as
necessary to permit preparation of the Company’s consolidated financial statements in
accordance with generally accepted accounting principles and to maintain asset
accountability, (iii) access to assets is permitted only in accordance with management’s
general or specific authorization, and (iv) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and appropriate action is taken
with respect to any differences, and (y) disclosure controls and procedures (as defined in
Rule 13a-14(c) under the Exchange Act); such disclosure controls and procedures have been
designed to ensure that material information relating to the Company and its subsidiaries is
made known to the Company’s principal executive officer and principal financial officer by
others within those entities; and such disclosure controls and procedures are effective.
(z) ERISA Compliance. The Company has fulfilled in all material respects its
obligations, if any, under the minimum funding standards of Xxxxxxx 000 xx xxx Xxxxxx Xxxxxx
Employee Retirement Income Security Act of 1974 (“ERISA”) and the regulations and published
interpretations thereunder with respect to each “plan” (as defined in Section 3(3) of ERISA
and such regulations and published interpretations) in which employees of the Company are
eligible to participate and each such plan is in compliance in all material respects with
the presently applicable provisions of ERISA and such regulations and published
interpretations. No “prohibited transaction” (as defined in Section 406 of ERISA, or Section
4975 of the Internal
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Revenue Code of 1986, as amended from time to time) has occurred with respect to any
employee benefit plan which would reasonably be expected to result in a Material Adverse
Effect.
(aa) Labor Issues. No labor problem or dispute with the employees of the Company
exists or, to the Company’s actual knowledge, is threatened or imminent, which would
reasonably be expected to result in a Material Adverse Effect. The Company is not aware
that any key employee or significant group of employees of the Company plans to terminate
employment with the Company.
(bb) Statistical and Market-Related Data. Any third-party statistical and
market-related data included or incorporated by reference in the Registration Statement, the
Prospectus or the General Disclosure Package are based on or derived from sources that the
Company believes to be reliable and accurate.
(cc) Forward-Looking Statements. No forward-looking statement (within the meaning of
Section 27A of the Securities Act and Section 21E of the Exchange Act) contained in the
Registration Statement, the General Disclosure Package or the Prospectus has been made or
reaffirmed without a reasonable basis or has been disclosed other than in good faith.
(dd) Environmental Laws. The Company (i) is in compliance with any and all applicable
federal, state, local and foreign laws, rules, regulations, decisions and orders relating to
the protection of human health and safety, the environment or hazardous or toxic substances
or wastes, pollutants or contaminants (collectively, “Environmental Laws”); (ii) has
received and is in compliance with all permits, licenses or other approvals required of them
under applicable Environmental Laws to conduct its business; and (iii) has not received
notice of any actual or potential liability for the investigation or remediation of any
disposal or release of hazardous or toxic substances or wastes, pollutants or contaminants,
except in the case of subsections (i), (ii) and (iii) of this subsection (jj) as would not,
individually or in the aggregate, have a Material Adverse Effect.
(ee) Regulatory Authorizations. Except as set forth in the General Disclosure Package
and Prospectus and specifically represented in this Agreement, the Company possesses all
certificates, authorizations and permits issued by the appropriate federal, state or foreign
regulatory authorities necessary to conduct its business as described in the General
Disclosure Package and the Prospectus, including without limitation all such certificates,
authorizations and permits required by the United States Food and Drug Administration (the
“FDA”) or any other federal, state or foreign agencies or bodies engaged in the regulation
of pharmaceuticals or biohazardous materials, except where the failure to possess such
certificates, authorizations and permits would not, individually or in the aggregate, have a
Material Adverse Effect; and the Company has not received any written notice of proceedings
relating to the revocation or modification of any such certificate, authorization or permit
which, if the subject of an unfavorable decision, ruling or finding, would individually or
in the aggregate have a Material Adverse Effect.
(ff) Conduct of Clinical Trials. The studies, tests and preclinical and clinical
trials conducted by or on behalf of the Company that are described in the General Disclosure
Package and the Prospectus, to the actual knowledge of the Company, were and, if still
pending, are being conducted in compliance with all applicable current good laboratory
practices and good clinical practices in all material respects. The descriptions of the
studies, tests and preclinical and clinical trials, including the related results and
regulatory status, contained in the General Disclosure Package or the Final Prospectus are
accurate in all material respects. The Company has not received any written notices,
correspondence or other communication from the FDA or other
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governmental agency requiring the termination or suspension of any clinical trials
conducted by, or on behalf of, the Company or in which the Company has participated.
(gg) FINRA. Neither the Company nor any subsidiary nor any of their affiliates (within
the meaning of FINRA Conduct Rule 2720(b)(1)(a)) directly or indirectly controls, are
controlled by, or is under common control with, or is an associated person (within the
meaning of Article I, Section 1(ee) of the By-laws of FINRA) of, any member firm of FINRA.
(hh) NASDAQ CM Approval. No approval of the shareholders of the Company under the
rules and regulations of NASDAQ CM (including Rule 5635 of the Nasdaq Listing Rules) is
required for the Company to issue and deliver to the Purchasers the Shares.
Any certificate signed by or on behalf of the Company and delivered to the Representative or
to counsel for the Placement Agents shall be deemed to be a representation and warranty by the
Company to the Placement Agents and the Purchasers as to the matters covered thereby.
The Company acknowledges that the Placement Agents and, for purposes of the opinions to be
delivered pursuant to Section 7 hereof, counsel to the Company and counsel to the Placement Agents,
will rely upon the accuracy and truthfulness of the foregoing representations (and to the extent
deemed necessary by counsel to the Company, certificates of officers of the Company and its
subsidiaries) and hereby consents to such reliance.
5. Certain Agreements of the Company. The Company covenants and agrees with the Placement
Agents (and, with respect to Section 5(o), the Purchasers) as follows:
(a) Filing of Prospectuses. The Company will prepare the Prospectus in a form approved
by the Representative containing information previously omitted at the time of effectiveness
of the Registration Statement in reliance on rules 430A, 430B and 430C and to file such
Prospectus pursuant to Rule 424(b) under the Securities Act not later than the second
(2nd) business day following the execution and delivery of this Agreement or, if
applicable, such earlier time as may be required by Rule 430A under the Securities Act; to
notify the Representative immediately of the Company’s intention to file or prepare any
supplement or amendment to any Registration Statement or to the Prospectus and to make no
amendment or supplement to the Registration Statement, the General Disclosure Package or to
the Prospectus to which the Representative shall reasonably object by notice to the Company
after a reasonable period to review; to advise the Representative, promptly after it
receives notice thereof, of the time when any amendment to any Registration Statement has
been filed or becomes effective or any supplement to the General Disclosure Package or the
Prospectus or any amended Prospectus has been filed and to furnish the Placement Agents
copies thereof; to file promptly all material required to be filed by the Company with the
Commission pursuant to Rule 433(d) or 163(b)(2), as the case may be; to file promptly all
reports and any definitive proxy or information statements required to be filed by the
Company with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange
Act subsequent to the date of the Prospectus and for so long as the delivery of a prospectus
(or in lieu thereof, the notice referred to in Rule 173(a) under the Securities Act) is
required in connection with the offering or sale of the Shares; to advise the
Representative, promptly after it receives notice thereof, of the issuance by the Commission
of any stop order or of any order preventing or suspending the use of any Preliminary
Prospectus, any Issuer Free Writing Prospectus or the Prospectus, of the suspension of the
qualification of the Shares for offering or sale in any jurisdiction, of the initiation or
threatening of any proceeding for any such purpose, or of any request by the Commission for
the amending or supplementing of the Registration Statement, the General Disclosure Package
or the Prospectus or for additional information; and, in the event of the issuance of any
stop order or of any order preventing or suspending the use of any Preliminary Prospectus,
any Issuer Free Writing Prospectus or the
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Prospectus or suspending any such qualification, and promptly to use its best efforts
to obtain the withdrawal of such order.
(b) The Company represents and agrees that, unless it obtains the prior written consent
of the Representative, it has not made and will not, make any offer relating to the Shares
that would constitute a “free writing prospectus” as defined in Rule 405 under the
Securities Act (each, a “Permitted Free Writing Prospectus”); provided that the prior
written consent of the Representative hereto shall be deemed to have been given in respect
of the Issuer Free Writing Prospectus(es) included in Schedule I hereto. The
Company represents that it has treated and agrees that it will treat each Permitted Free
Writing Prospectus as an Issuer Free Writing Prospectus, comply with the requirements of
Rules 164 and 433 under the Securities Act applicable to any Issuer Free Writing Prospectus,
including the requirements relating to timely filing with the Commission, legending and
record keeping and will not take any action that would result in the Placement Agents or the
Company being required to file with the Commission pursuant to Rule 433(d) under the
Securities Act a free writing prospectus prepared by or on behalf of such Placement Agent
that such Placement Agent otherwise would not have been required to file thereunder.
(c) If at any time when a Prospectus relating to the Shares is required to be delivered
under the Securities Act, any event occurs or condition exists as a result of which the
Prospectus, as then amended or supplemented, would include any untrue statement of a
material fact or omit to state a material fact necessary in order to make the statements
therein, in light of the circumstances under which they were made, not misleading, or the
Registration Statement, as then amended or supplemented, would include any untrue statement
of a material fact or omit to state a material fact necessary to make the statements therein
not misleading, or if for any other reason it is necessary at any time to amend or
supplement any Registration Statement or the Prospectus to comply with the Securities Act or
the Exchange Act, the Company will promptly notify the Representative, and upon the
Representative’s request, the Company will promptly prepare and file with the Commission, at
the Company’s expense, an amendment to the Registration Statement or an amendment or
supplement to the Prospectus that corrects such statement or omission or effects such
compliance and will deliver to the Placement Agents, without charge, such number of copies
thereof as the Placement Agents may reasonably request. The Company consents to the use of
the Prospectus or any amendment or supplement thereto by the Placement Agents.
(d) If the General Disclosure Package is being used to solicit offers to buy the Shares
at a time when the Prospectus is not yet available to prospective purchasers and any event
shall occur as a result of which, in the judgment of the Company or in the reasonable
opinion of the Representative, it becomes necessary to amend or supplement the General
Disclosure Package in order to make the statements therein, in the light of the
circumstances then prevailing, not misleading, or to make the statements therein not
conflict with the information contained or incorporated by reference in the Registration
Statement then on file and not superseded or modified, or if it is necessary at any time to
amend or supplement the General Disclosure Package to comply with any law, the Company
promptly will either (i) prepare, file with the Commission (if required) and furnish to the
Placement Agents and any dealers an appropriate amendment or supplement to the General
Disclosure Package or (ii) prepare and file with the Commission an appropriate filing under
the Exchange Act which shall be incorporated by reference in the General Disclosure Package
so that the General Disclosure Package as so amended or supplemented will not, in the light
of the circumstances then prevailing, be misleading or conflict with the Registration
Statement then on file, or so that the General Disclosure Package will comply with law.
- 13 -
(e) If at any time following issuance of an Issuer Free Writing Prospectus there
occurred or occurs an event or development as a result of which such Issuer Free Writing
Prospectus conflicted or will conflict with the information contained in the Registration
Statement, Pricing Prospectus or Prospectus, including any document incorporated by
reference therein and any prospectus supplement deemed to be a part thereof and not
superseded or modified or included or would include an untrue statement of a material fact
or omitted or would omit to state a material fact required to be stated therein or necessary
in order to make the statements therein, in the light of the circumstances prevailing at the
subsequent time, not misleading, the Company has promptly notified or will promptly notify
the Representative so that any use of the Issuer Free Writing Prospectus may cease until it
is amended or supplemented and has promptly amended or will promptly amend or supplement, at
its own expense, such Issuer Free Writing Prospectus to the Placement Agents’ Information.
(f) Filing of Amendments; Response to Commission Requests. The Company will promptly
advise the Placement Agents of any proposal to amend or supplement the Registration
Statement or any Prospectus until the completion of the purchase and sale of the Shares
contemplated herein and will afford the Placement Agents a reasonable opportunity to comment
on any such proposed amendment or supplement; and the Company will also advise the Placement
Agents promptly of (i) the filing of any such amendment or supplement, (ii) any request by
the Commission or its staff for any amendment to the Registration Statement, for any
supplement to any Prospectus or for any additional information, (iii) the institution by the
Commission of any stop order proceedings in respect of the Registration Statement or the
threatening of any proceeding for that purpose, and (iv) the receipt by the Company of any
notification with respect to the suspension of the qualification of the Shares in any
jurisdiction or the institution or threatening of any proceedings for such purpose. The
Company will use its reasonable best efforts to prevent the issuance of any such stop order
or the suspension of any such qualification and, if issued, to obtain as soon as possible
the withdrawal thereof.
(g) Continued Compliance with Securities Laws. If, at any time when a prospectus
relating to the Shares is (or but for the exemption in Rule 172 under the Securities Act
would be) required to be delivered under the Securities Act in connection with sales by the
Company to any Purchasers (the “Prospectus Delivery Period”), any event occurs as a result
of which the Prospectus as then amended or supplemented would include an untrue statement of
a material fact or omit to state any material fact necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading, or if it is
necessary at any time to amend the Registration Statement or supplement the Prospectus to
comply with the Securities Act, the Company will promptly notify the Placement Agents of
such event and will promptly prepare and file with the Commission and furnish, at its own
expense, to the Placement Agents and, to the extent applicable, the dealers and any other
dealers upon request of the Placement Agents, an amendment or supplement which will correct
such statement or omission or an amendment which will effect such compliance. Neither the
Placement Agents’ consent to, nor the Placement Agents’ delivery of, any such amendment or
supplement shall constitute a waiver of any of the conditions set forth in Section 7 hereof.
During the Prospectus Delivery Period, the Company will file all documents required to be
filed with the Commission pursuant to Sections 13, 14 or 15 of the Exchange Act in the
manner and within the time periods required by the Exchange Act.
(h) Furnishing of Prospectuses. The Company will deliver promptly to the Placement
Agents in New York City such number of the following documents as the Placement Agents shall
reasonably request: (i) conformed copies of the Registration Statement as originally filed
with the Commission (in each case excluding exhibits), (ii) any Preliminary Prospectus,
(iii) any Issuer Free Writing Prospectus, (iv) the Prospectus (the delivery of the documents
- 14 -
referred to in clauses (i), (ii), (iii) and (iv) of this paragraph (h) to be made not later than
10:00 A.M., New York time, on the business day following the execution and delivery of this
Agreement), (v) conformed copies of any amendment to the Registration Statement (excluding
exhibits), (vi) any amendment or supplement to the General Disclosure Package or the
Prospectus (the delivery of the documents referred to in clauses (v) and (vi) of this
paragraph (h) to be made not later than 10:00 A.M., New York City time, on the business day
following the date of such amendment or supplement) and (vii) any document incorporated by
reference in the General Disclosure Package or the Prospectus (excluding exhibits thereto)
(the delivery of the documents referred to in clause (vi) of this paragraph (h) to be made
not later than 10:00 A.M., New York City time, on the business day following the date of
such document).
(i) Blue Sky Qualifications. The Company will arrange for the qualification of the
Shares for sale under the laws of such jurisdictions as the Placement Agents designate and
will continue such qualifications in effect so long as required for the distribution;
provided that the Company will not be required to qualify as a foreign corporation or to
file a general consent to service of process in any such jurisdiction or take any action
that would subject it to taxation in any such jurisdiction where it is not then so subject.
(j) Reporting Requirements. During the period of five years after the date of the this
Agreement, the Company will furnish to the Placement Agents as soon as practicable after the
end of each fiscal year, a copy of its annual report to stockholders for such year; and the
Company will furnish to the Placement Agents (i) as soon as available, a copy of each report
and any definitive proxy statement of the Company filed with the Commission under the
Exchange Act or mailed to stockholders, and (ii) from time to time, such other information
concerning the Company as the Placement Agents may reasonably request; provided, however, so
long as the Company is subject to the reporting requirements of either Section 13 or Section
15(d) of the Exchange Act and is timely filing reports with the Commission on its Electronic
Data Gathering, Analysis and Retrieval system (or any successor system), it is not required
to furnish such reports or statements to the Placement Agents.
(k) Securities Act Rule 158. The Company will make generally available to holders of
its securities (including without limitation by publicly filing the same with the
Commission) as soon as may be practicable, but in no event later than the Availability Date
(as defined below), an earning statement (which need not be audited but shall be in
reasonable detail) covering a period of 12 months commencing after the Effective Date that
will satisfy the provisions of Section 11(a) of the Securities Act (including Rule 158
thereunder). For the purpose of the preceding sentence, “Availability Date” means the 40th
day after the end of the fourth fiscal quarter following the fiscal quarter that includes
such Effective Date, except that if such fourth fiscal quarter is the last quarter of the
Company’s fiscal year, “Availability Date” means the 75th day after the end of such fourth
fiscal quarter.
(l) Payment of Expenses. The Company agrees to pay, or reimburse if paid by the
Placement Agents, whether or not the transactions contemplated hereby are consummated or
this Agreement is terminated: (a) the costs incident to the authorization, issuance, sale,
preparation and delivery of the Shares to the Purchasers and any taxes payable in that
connection; (b) the costs incident to the Registration of the Shares under the Securities
Act; (c) the costs incident to the preparation, printing and distribution of the
Registration Statement, the Base Prospectus, any Preliminary Prospectus, any Issuer Free
Writing Prospectus, the General Disclosure Package, the Prospectus, any amendments,
supplements and exhibits thereto or any document incorporated by reference therein and the
costs of printing, reproducing and distributing any transaction document by mail, telex or
other means of communications; (d) any applicable listing, quotation or other fees; (e) the
fees and expenses of qualifying the Shares under the securities laws of the several
jurisdictions as provided in Section 5(i) and of preparing, printing and distributing
wrappers, blue
- 15 -
sky memoranda and legal investment surveys (if any); (f) the cost of preparing and
printing stock certificates; (g) all fees and expenses of the registrar and transfer agent
of the Shares; (h) the reasonable and documented fees, disbursements and expenses of counsel
to the Placement Agents not to exceed $25,000 and (i) all other costs and expenses incident
to the offering of the Shares or the performance of the obligations of the Company under
this Agreement (including, without limitation, the fees and expenses of the Company’s
counsel and the Company’s independent accountants and the travel and other expenses incurred
by Company personnel in connection with any “road show” including, without limitation, any
expenses advanced by the Placement Agents on the Company’s behalf (which will be promptly
reimbursed.); provided that, except to the extent otherwise provided in this Section
5 and Sections 8 and 6, the Placement Agents shall pay their own costs
and expenses, including additional fees and expenses of their counsel.
(m) Use of Proceeds. The Company will use the net proceeds received in connection with
any Offering of the Shares in the manner described in the “Use of Proceeds” section of the
General Disclosure Package and the Prospectus.
(n) Absence of Manipulation. The Company will not take, directly or indirectly, any
action designed to or that would constitute or that might reasonably be expected to cause or
result in, stabilization or manipulation of the price of any securities of the Company to
facilitate the sale or resale of the Shares.
(o) Restriction on Sale of Securities. The Company will not, for a period of ninety
(90) days from the date of the Prospectus (the “Lock-Up Period”), without the prior written
consent of the Representative, directly or indirectly offer, sell, assign, transfer, pledge,
contract to sell, or otherwise dispose of, any shares of Common Stock or any securities
convertible into or exercisable or exchangeable for Common Stock, other than the Company’s
sale of the Shares hereunder and the issuance of restricted Common Stock or options to
acquire Common Stock pursuant to the Company’s employee benefit plans, qualified stock
option plans or other employee compensation plans as such plans are in existence on the date
hereof and described in the Prospectus and the issuance of Common Stock pursuant to the
valid exercises of options, warrants or rights outstanding on the date hereof. The Company
will cause each executive officer, director, shareholder, optionholder and warrantholder
listed in Schedule II to furnish to the Placement Agents, prior to the Closing Date,
a letter, substantially in the form of Exhibit B hereto, pursuant to which each such
person shall agree, among other things, not to directly or indirectly offer, sell, assign,
transfer, pledge, contract to sell, or otherwise dispose of, any shares of Common Stock or
any securities convertible into or exercisable or exchangeable for Common Stock, not to
engage in any swap or other agreement or arrangement that transfers, in whole or in part,
directly or indirectly, the economic risk of ownership of Common Stock or any such
securities and not to engage in any short selling of any Common Stock or any such
securities, during the Lock-Up Period, without the prior written consent of the
Representative. The Company also agrees that during such period, the Company will not file
any registration statement, preliminary prospectus or prospectus, or any amendment or
supplement thereto, under the Securities Act for any such transaction or which registers, or
offers for sale, Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock, except for a registration statement on Form S-8 relating to
employee benefit plans. The Company hereby agrees that (i) if it issues an earnings release
or material news, or if a material event relating to the Company occurs, during the last
seventeen (17) days of the Lock-Up Period, or (ii) if prior to the expiration of the Lock-Up
Period, the Company announces that it will release earnings results during the sixteen
(16)-day period beginning on the last day of the Lock-Up Period, the restrictions imposed by
this paragraph (o) or the letter shall continue to apply until the expiration of the
eighteen (18)-day period beginning on the issuance of the earnings release or the occurrence
of the material news or material event.
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(p) Compliance with Xxxxxxxx-Xxxxx Act. The Company will comply in all material
respects with all applicable securities and other laws, rules and regulations, including,
without limitation, the Xxxxxxxx-Xxxxx Act, and use its best efforts to cause the Company’s
directors and officers, in their capacities as such, to comply in all material respects with
such laws, rules and regulations.
(q) Correspondence with the Commission. The Company will supply the Placement Agents
with copies of all correspondence to and from, and all documents issued to and by, the
Commission in connection with the registration of the Shares under the Securities Act or the
Registration Statement, any Preliminary Prospectus or the Prospectus, or any amendment or
supplement thereto or document incorporated by reference therein.
(r) Publicity. Prior to the Closing Date, the Company will not issue any press release
or other communication directly or indirectly or hold any press conference with respect to
the Company, its condition, financial or otherwise, or earnings, business affairs or
business prospects (except for routine oral marketing communications in the ordinary course
of business and consistent with the past practices of the Company and of which the
Representative is notified beforehand), without the prior written consent of the
Representative, unless in the judgment of the Company and its counsel, and after
notification to the Representative, such press release or communication is required by law.
(s) Further Actions. The Company will use its commercially reasonable efforts to do
and perform all things required to be done or performed under this Agreement by the Company
prior to the Closing Date and to satisfy all conditions precedent to the delivery of the
Shares.
6. Free Writing Prospectuses. The Company and each of the Placement Agents, severally and not
jointly, each represents and agrees that, unless it obtains the prior consent of the other, it has
not made and will not make any offer relating to the Shares that would constitute an Issuer Free
Writing Prospectus, or that would otherwise constitute a “free writing prospectus,” as defined in
Rule 405, required to be filed with the Commission. Any such free writing prospectus consented to
by the Company and the Placement Agents, each of which is set forth Schedule I hereto, is
hereinafter referred to as a “Permitted Free Writing Prospectus.” The Company represents that it
has treated and agrees that it will treat each Permitted Free Writing Prospectus as an “issuer free
writing prospectus,” as defined in Rule 433, and has complied and will comply with the requirements
of Rules 164 and 433 applicable to any Permitted Free Writing Prospectus, including timely
Commission filing where required, legending and record keeping.
7. Conditions of the Obligations of the Placement Agents and the Purchasers. The respective
obligations of the Placement Agents hereunder and the Purchasers under the Subscription Agreements,
and the Closing of the sale of the Shares, will be subject to the accuracy of the representations
and warranties of the Company herein (as though made on such Closing Date), to the accuracy of the
statements of Company officers made pursuant to the provisions hereof, to the performance by the
Company of its obligations hereunder and to the following additional conditions precedent:
(a) Accountants’ Comfort Letter. The Placement Agents shall have received the letter,
dated the date hereof, of Xxxxxx LLP, in substantially in the form attached as Exhibit
C hereto and a “bring down” comfort letter dated as of the Closing Date, in form and
substance reasonably satisfactory to the Placement Agents, to the effect that they reaffirm
the statements made in the letter furnished as of the date hereof, except that the specified
date referred to therein for carrying out of the procedures shall be no more no more than
three days prior to the Closing Date.
- 17 -
(b) Filing of Prospectus; No Stop Order; No Objection from FINRA. No stop order
suspending the effectiveness of the Registration Statement or any part thereof, preventing
or suspending the use of any Base Prospectus, any Preliminary Prospectus, the Prospectus or
any Permitted Free Writing Prospectus or any part thereof shall have been issued and no
proceedings for that purpose or pursuant to Section 8A under the Securities Act shall have
been initiated or threatened by the Commission, and all requests for additional information
on the part of the Commission (to be included or incorporated by reference in the
Registration Statement or the Prospectus or otherwise) shall have been complied with to the
reasonable satisfaction of the Placement Agents; each Issuer Free Writing Prospectus, if
any, and the Prospectus shall have been filed with the Commission within the applicable time
period prescribed for such filing by, and in compliance with, the Securities Act and in
accordance with Section 4(a); and FINRA shall have raised no objection to the fairness and
reasonableness of the terms of this Agreement or the transactions contemplated hereby.
(c) No Material Misstatement or Omission. The Placement Agents shall not have
discovered and disclosed to the Company on or prior to the Closing Date that the
Registration Statement or any amendment or supplement thereto contains an untrue statement
of a fact which, in the opinion of counsel for the Placement Agents, is material or omits to
state any fact which, in the opinion of such counsel, is material and is required to be
stated therein or is necessary to make the statements therein not misleading, or that the
General Disclosure Package, any Issuer Free Writing Prospectus or the Prospectus or any
amendment or supplement thereto contains an untrue statement of fact which, in the opinion
of such counsel, is material or omits to state any fact which, in the opinion of such
counsel, is material and is necessary in order to make the statements, in the light of the
circumstances in which they were made, not misleading.
(d) Corporate Proceedings. All corporate proceedings and other legal matters incident
to the authorization, form and validity of each of this Agreement, the Subscription
Agreements, the Escrow Agreement, the Shares, the Registration Statement, the General
Disclosure Package, each Issuer Free Writing Prospectus, if any, and the Prospectus and all
other legal matters relating to this Agreement and the transactions contemplated hereby
shall be reasonably satisfactory in all material respects to counsel for the Placement
Agents, and the Company shall have furnished to such counsel all documents and information
that they may reasonably request to enable them to pass upon such matters.
(e) No Material Adverse Change. Since the date of the latest audited financial
statements included in the General Disclosure Package or incorporated by reference in the
General Disclosure Package as of the date hereof, (i) neither the Company nor any of its
subsidiaries shall have sustained any loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree, otherwise than as set forth in the
General Disclosure Package, and (ii) there shall not have been any change in the capital
stock or long-term debt of the Company or any of its subsidiaries, or any change, or any
development involving a prospective change, in or affecting the business, general affairs,
management, financial position, stockholders’ equity or results of operations of the Company
and its subsidiaries, otherwise than as set forth in the General Disclosure Package, the
effect of which, in any such case described in clause (i) or (ii) of this paragraph (e), is,
in the judgment of the Representative, so material and adverse as to make it impracticable
or inadvisable to proceed with the sale or delivery of the Shares on the terms and in the
manner contemplated in the General Disclosure Package.
(f) No Legal Action. No action shall have been taken and no law, statute, rule,
regulation or order shall have been enacted, adopted or issued by any governmental agency or
body which would prevent the issuance or sale of the Shares or materially and adversely
affect or potentially materially and adversely affect the business or operations of the
Company; and no
- 18 -
injunction, restraining order or order of any other nature by any federal or state
court of competent jurisdiction shall have been issued which would prevent the issuance or
sale of the Shares or materially and adversely affect or potentially materially and
adversely affect the business or operations of the Company.
(g) Opinion of Counsel for the Company. The Placement Agents shall have received an
opinion and negative assurance (10b-5) statement, dated as of the Closing Date, of Golenbock
Xxxxxxx Assor Xxxx & Xxxxxx LLP, counsel for the Company, in substantially the form attached
as Exhibit D hereto.
(h) Opinion of Counsel for the Placement Agents. The Placement Agents shall have
received from Proskauer Rose LLP, counsel for the Placement Agents, such opinion or
opinions, dated as of Closing Date, with respect to such matters as the Placement Agents may
require, and the Company shall have furnished to such counsel such documents as they request
for the purpose of enabling them to pass upon such matters.
(i) Officer’s Certificate. The Company shall have furnished to the Placement Agents a
certificate, dated the Closing Date, of its Chairman of the Board, Chief Executive Officer,
its President or a Vice President and its chief financial officer stating that (i) such
officers have carefully examined the Registration Statement, the General Disclosure Package,
any Permitted Free Writing Prospectus and the Prospectus and, in their opinion, the
Registration Statement and each amendment thereto, at the Applicable Time and as of the date
of this Agreement and as of the Closing Date did not include any untrue statement of a
material fact and did not omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, and the General Disclosure Package,
as of the Applicable Time and as of the Closing Date, any Permitted Free Writing Prospectus
as of its date and as of the Closing Date, the Prospectus and each amendment or supplement
thereto, as of the respective date thereof and as of the Closing Date, did not include any
untrue statement of a material fact and did not omit to state a material fact necessary in
order to make the statements therein, in the light of the circumstances in which they were
made, not misleading, (ii) since the effective date of the Initial Registration Statement,
no event has occurred which should have been set forth in a supplement or amendment to the
Registration Statement, the General Disclosure Package or the Prospectus that was not so set
forth, (iii) to the best of their knowledge, as of the Closing Date, the representations and
warranties of the Company in this Agreement are true and correct, except that any such
representation or warranty shall be true and correct in all respects where such
representation or warranty is qualified with respect to materiality, and the Company has
complied with all agreements and satisfied all conditions on its part to be performed or
satisfied hereunder at or prior to the Closing Date, and (iv) there has not been, subsequent
to the date of the most recent audited financial statements included or incorporated by
reference in the General Disclosure Package, any material adverse change in the financial
position or results of operations of the Company and its subsidiaries, or any change or
development that, singularly or in the aggregate, would involve a material adverse change or
a prospective material adverse change, in or affecting the condition (financial or
otherwise), results of operations, business, assets or prospects of the Company and its
subsidiaries taken as a whole, except as set forth in the Prospectus.
(j) Lock-up Agreements. On or prior to the date hereof, the Placement Agents shall
have received executed lockup letters substantially in the form of Exhibit B from
each of the executive officers and directors of the Company and select stockholders of the
Company as set forth on Schedule II.
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(k) Subscription Agreements. The Company shall have entered into the Subscription
Agreements with each of the Purchasers, and such agreements and shall be in full force and
effect.
(l) Escrow Agreement. The Company shall have entered into the Escrow Agreement and
such agreement shall be in full force and effect.
(m) Additional Certificates. The Company shall have furnished to the Placement Agents
such certificates (including a Secretary’s Certificate), in addition to those specifically
mentioned herein, as the Placement Agents may have reasonably requested as to the accuracy
and completeness at the Closing Date of any statement in the Registration Statement, the
Pricing Prospectus and the Prospectus, as to the accuracy at the Closing Date of the
representations and warranties of the Company herein, 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 Agents.
(n) Listing of Common Stock. The Shares shall have been accepted for listing on the
NASDAQ CM.
The Company will furnish the Placement Agents with such conformed copies of such opinions,
certificates, letters and documents as the Placement Agents may reasonably request. The Placement
Agents may in its sole discretion waive compliance with any conditions to the obligations of the
Placement Agents under this Agreement.
8. Indemnification and Contribution.
(a) The Company will indemnify and hold harmless each Placement Agent, each of its
respective affiliates, and its respective directors, officers, managers, members, employees,
representatives and agents and each person, if any, who controls each Placement Agent within
the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act
(collectively, the “Placement Agent Indemnified Parties”), from and against any and all
losses, claims, liabilities, expenses and damages (including any and all investigative,
legal and other expenses reasonably incurred in connection with, and any amount paid in
settlement of, any action, suit or proceeding or any claim asserted), to which they, or any
of them, may become subject under the Securities Act, the Exchange Act or other federal or
state statutory law or regulation, at common law or otherwise, insofar as such losses,
claims, liabilities, expenses or damages arise out of or are based on (A) any untrue
statement or alleged untrue statement of a material fact contained in the Registration
Statement, any preliminary prospectus, the Base Prospectus, the Pricing Prospectus, the
Prospectus or any amendment or supplement thereto, or any Issuer Free Writing Prospectus or
any “issuer information” filed or required to be filed pursuant to Rule 433(d) under the
Securities Act, or (B) the omission or alleged omission to state in such document a material
fact required to be stated in it or necessary to make the statements in it not misleading in
the light of the circumstances in which they were made, in whole or in part, any inaccuracy
in the representations and warranties of the Company contained herein, or any failure of the
Company to perform its obligations hereunder or under law in connection with the
transactions contemplated hereby; provided, however, that the Company will not be liable to
the extent that such loss, claim, liability, expense or damage arises from the sale of the
Shares to any Purchaser and is based on an untrue statement or omission or alleged untrue
statement or omission made in reliance on and in conformity with information relating to the
Placement Agents furnished in writing to the Company through the Representative by or on
behalf of any Placement Agent expressly for inclusion in the Registration Statement, any
preliminary prospectus, the Base Prospectus, the Pricing Prospectus, the Prospectus, or any
Issuer Free Writing Prospectus. The Company acknowledges that the Placement Agents’
Information in the Pricing Prospectus and the Prospectus constitutes the only information
relating to the Placement Agents furnished in writing
- 20 -
to the Company through the Representative by or on behalf of any Placement Agent
expressly for inclusion in the Registration Statement, any preliminary prospectus, the Base
Prospectus, the Pricing Prospectus, the Prospectus, or any Issuer Free Writing Prospectus.
This indemnity agreement will be in addition to any liability that the Company might
otherwise have.
(b) Each Placement Agent, severally and not jointly, will indemnify and hold harmless
the Company, each director of the Company, each officer of the Company who signs the
Registration Statement, and each person, if any, who controls the Company within the meaning
of Section 15 of the Securities Act or Section 20 of the Exchange Act (collectively, the
“Company Indemnified Parties”), to the same extent as the foregoing indemnity from the
Company to the Placement Agent, as set forth in Section 8(a), 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 through
the Representative by or on behalf of any Placement Agent expressly for use in any
preliminary prospectus, the Registration Statement, the Base Prospectus, any Prospectus
Supplement, the Prospectus, or any Issuer Free Writing Prospectus. The Company acknowledges
that the Placement Agents’ Information in the Prospectus constitutes the only information
relating to any Placement Agent furnished in writing to the Company through the
Representative by or on behalf of any Placement Agent expressly for use in any preliminary
prospectus, the Registration Statement, the Base Prospectus, any Prospectus Supplement, the
Prospectus, or any Issuer Free Writing Prospectus. This indemnity will be in addition to
any liability that the Placement Agents might otherwise have.
(c) Any party that proposes to assert the right to be indemnified under this Section 8
shall, promptly after receipt of notice of commencement of any action against such party in
respect of which a claim is to be made against an indemnifying party or parties under this
Section 8, notify each such indemnifying party in writing of the commencement of such
action, enclosing with such notice a copy of all papers served, but the omission so to
notify such indemnifying party will not relieve it from any liability that it may have to
any indemnified party under the foregoing provisions of this Section 8 unless, and only to
the extent that, such omission results in the loss of substantive rights or defenses by the
indemnifying party. If any such action is brought against any indemnified party and it
notifies the indemnifying party of its commencement, the indemnifying party will be entitled
to participate in and, to the extent that it elects by delivering written notice to the
indemnified party promptly after receiving notice of the commencement of the action from the
indemnified party, jointly with any other indemnifying party similarly notified, to assume
the defense of the action, with counsel reasonably satisfactory to the indemnified party.
After notice from the indemnifying party to the indemnified party of its election to assume
the defense, the indemnifying party will not be liable to the indemnified party for any
legal or other expenses except as provided below and except for the reasonable costs of
investigation incurred by the indemnified party in connection with the defense. The
indemnified party will have the right to employ its own counsel in any such action, but the
fees, expenses and other charges of such counsel will be at the expense of such indemnified
party, unless (i) the employment of counsel by the indemnified party has been authorized in
writing by the indemnifying party, (ii) the indemnified party has reasonably concluded
(based on advice of counsel) that there may be legal defenses available to it or other
indemnified parties that are different from or in addition to those available to the
indemnifying party, (iii) a conflict or potential conflict exists (based on advice of
counsel to the indemnified party) between the indemnified party and the indemnifying party
(in which case the indemnifying party will not have the right to direct the defense of such
action on behalf of the indemnified party) or (iv) the indemnifying party has not in fact
employed counsel reasonably satisfactory to the indemnified party to assume the defense of
such action within a reasonable time after receiving notice of the commencement of the
action, in each of which cases the reasonable fees, disbursements and other
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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. No indemnifying party shall, without the prior written consent of the
indemnified party, effect any settlement of any pending or threatened action in respect of
which any indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party unless such settlement (i) includes an
unconditional release of such indemnified party from all liability on any claims that are
the subject matter of such action and (ii) does not include a statement as to, or an
admission of, fault, culpability or a failure to act by or on behalf of an indemnified
party. An indemnifying party will not be liable for any settlement of any action or claim
effected without its written consent (which consent will not be unreasonably withheld or
delayed).
(d) If the indemnification provided for in this Section 8 is applicable in accordance
with its terms but for any reason is held to be unavailable to or insufficient to hold
harmless an indemnified party under paragraphs (a), (b) and (c) of this Section 8 in respect
of any losses, claims, liabilities, expenses and damages referred to therein, then each
applicable indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable (including any investigative, legal and other
expenses reasonably incurred in connection with, and any amount paid in settlement of, any
action, suit or proceeding or any claim asserted, but after deducting any contribution
received by the Company from persons other than the Placement Agents, such as persons who
control the Company within the meaning of the Securities Act, officers of the Company who
signed the Registration Statement and directors of the Company, who also may be liable for
contribution) by such indemnified party as a result of such losses, claims, liabilities,
expenses and damages in such proportion as shall be appropriate to reflect the relative
benefits received by the Company, on the one hand, and the Placement Agents, on the other
hand. The relative benefits received by the Company, on the one hand, and the Placement
Agents, on the other hand, shall be deemed to be in the same proportion as the total net
proceeds from the Offering (before deducting expenses) received by the Company bear to the
total Placement Fee received by the Placement Agents pursuant to this Agreement. If, but
only if, the allocation provided by the foregoing sentence is not permitted by applicable
law, the allocation of contribution shall be made in such proportion as is appropriate to
reflect not only the relative benefits referred to in the foregoing sentence but also the
relative fault of the Company, on the one hand, and the Placement Agents, on the other hand,
with respect to the statements or omissions that resulted in such loss, claim, liability,
expense or damage, or action in respect thereof, as well as any other relevant equitable
considerations with respect to such offering. Such relative fault shall be determined by
reference to whether the untrue or alleged untrue statement of a material fact or omission
or alleged omission to state a material fact relates to information supplied by the Company
or the Placement Agents, the intent of the parties and their relative knowledge, access to
information and opportunity to correct or prevent such statement or omission. The Company
and the Placement Agents agree that it would not be just and equitable if contributions
pursuant to this Section 8(d) were to be determined by pro rata allocation or by any other
method of allocation that does not take into account the equitable considerations referred
to herein. The amount paid or payable by an indemnified party as a result of the loss
claim, liability, expense or damage, or action in respect thereof, referred to above in this
Section 8(d) shall be deemed to include, for purposes of this Section 8(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 8(d), in no case shall the Placement Agents be required to contribute any amount in
excess of the Fee
- 22 -
received by the Placement Agents pursuant to this Agreement. No person found guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act) will be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section 8(d), any person who controls a party to
this Agreement within the meaning of the Securities Act will have the same rights to
contribution as that party, and each officer of the Company who signed the Registration
Statement will have the same rights to contribution as the Company, subject in each case to
the provisions hereof. Any party entitled to contribution, promptly after receipt of notice
of commencement of any action against any such party in respect of which a claim for
contribution may be made under this Section 8(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 8(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). The Placement Agents’ obligations to contribute as provided in this Section 8(d)
are several in proportion to the amount of the Placement Fee received by each of them and
not joint.
9. Survival of Certain Representations and Obligations. The respective indemnities,
agreements, representations, warranties and other statements of the Company or its officers and of
the Placement Agents set forth in or made pursuant to this Agreement will remain in full force and
effect, regardless of any investigation, or statement as to the results thereof, made by or on
behalf of the Placement Agents, the Company or any of their respective representatives, officers or
directors or any controlling person, and will survive delivery of and payment for the Shares or any
termination of this Agreement or the Subscription Agreements. If the sale and issuance of the
Shares by the Company hereunder are not consummated for any reason, the Company will promptly
reimburse the Placement Agents for all out of pocket expenses reasonably incurred in connection
with the Offering of the Shares in accordance with Section 5(h) hereof, and the respective
obligations of the Company and the Placement Agents pursuant to Section 8 hereof shall remain in
effect. In addition, if any Shares have been purchased under this Agreement and the Subscription
Agreements, the representations and warranties in Section 4 hereof and all obligations under
Section 5 hereof shall also remain in effect.
10. Notices. All communications hereunder will be in writing and, if sent to the Placement
Agents, will be mailed, delivered or telegraphed and confirmed to Xxxxxxx & Company, LLC, 000 Xxxx
Xxxxxx, Xxx Xxxx, XX 00000, Attention: Corporate Finance Department, or, if sent to the Company,
will be mailed, delivered or telegraphed and confirmed to it at 0 Xxxx Xxxx Xxxxxx, Xxxxx 000,
Xxxxxxxxx, XX, Attention: Xx. Xxxxxx X. Xxxxx, Chief Executive Officer.
11. Successors. This Agreement will inure to the benefit of and be binding upon parties
hereto and their respective successors, assigns and the officers and directors and controlling
persons referred to in Section 8, and no other person will have any right or obligation hereunder.
This Agreement shall also inure to the benefit of the Purchasers as against the Company, and their
respective successors and assigns, which shall be third party beneficiaries hereof. Nothing
expressed or mentioned in this Agreement is intended or shall be construed to give any person,
other than the persons mentioned in the preceding sentences, any legal or equitable right, remedy
or claim under or in respect of this Agreement, or any provisions herein contained, this Agreement
and all conditions and provisions hereof being intended to be and being for the sole and exclusive
benefit of such persons and for the benefit of no other person; except that the representations,
warranties, covenants, agreements and indemnities of the Company contained in this Agreement shall
also be for the benefit of the Placement Agent Indemnified Parties and the indemnities of the
Placement Agents shall be for the benefit of the Company Indemnified Parties. It is understood
that the Placement Agents’ responsibility to the Company is solely contractual in nature and the
Placement Agents do not owe the Company, or any other party, any fiduciary duty as a result of this
Agreement.
- 23 -
12. Counterparts. This Agreement may be executed in any number of counterparts, each of which
shall be deemed to be an original, but all such counterparts shall together constitute one and the
same Agreement.
13. Termination of this Agreement. The obligations of the Placement Agents under this
Agreement and of the Purchasers under the Subscription Agreements may be terminated at any time on
or prior to the Closing Date, by notice to the Company from the Representative, without liability
on the part of the Placement Agents or the Purchasers to the Company if in the sole judgment of the
Representative, (i) trading in any of the equity securities of the Company shall have been
suspended or limited by the Commission or by the NASDAQ CM, (ii) trading in securities generally on
the New York Stock Exchange or the NASDAQ CM shall have been suspended or limited or minimum or
maximum prices shall have been generally established on such exchange, or additional material
governmental restrictions, not in force on the date of this Agreement, shall have been imposed upon
trading in securities generally by such exchange, by order of the Commission or any court or other
governmental authority, or by the NASDAQ CM, (iii) a general banking moratorium shall have been
declared by either federal or New York State authorities or any material disruption of the
securities settlement or clearance services in the United States shall have occurred, or (iv) any
material adverse change in the financial or securities markets in the United States or in
political, financial or economic conditions in the United States, any outbreak or escalation of
hostilities involving the United States, a declaration of a national emergency or war by the United
States, or other calamity or crisis, either within or outside the United States, shall have
occurred, the effect of which is such as to make it, in the sole judgment of the Representative,
impracticable or inadvisable to proceed with completion of the placement of the Shares on the terms
and in the manner contemplated in the General Disclosure Package and the Prospectus. In addition,
the obligations of the Placement Agents hereunder and the Purchasers under the Subscription
Agreements may be terminated by the Placement Agents, in its absolute discretion by notice given to
the Company prior to delivery of and payment for the Shares if, prior to that time, any of the
events described in Sections 7(e) and (f) have occurred or if the Purchasers shall decline to
purchase the Shares for any reason permitted under this Agreement or the Subscription Agreements.
14. Absence of Fiduciary Relationship. Notwithstanding any preexisting relationship, advisory
or otherwise, between the parties or any oral representations or assurances previously or
subsequently made by the Placement Agents, the Company acknowledges and agrees that (i) the
purchase and sale of the Shares pursuant to this Agreement and the Subscription Agreements
(including the determination of the terms of the Offering of the Shares) is an arm’s-length
commercial transaction between the Company and the several Purchasers, (ii) the Placement Agents
have not assumed any advisory or fiduciary responsibility in favor of the Company with respect to
the offering contemplated hereby or the process leading thereto (irrespective of whether any
Placement Agent has advised or is currently advising the Company on other matters) or any other
obligation to the Company except the obligations expressly set forth in this Agreement, (iii) the
Placement Agents and their affiliates may be engaged in a broad range of transactions that involve
interests that differ from those of the Company and have no obligation to disclose or account to
the Company for any of such differing interests, and (iv) the Company has consulted its own legal,
tax, accounting and financial advisors to the extent it deemed appropriate. The Company hereby
agrees that it will not claim that any Placement Agent has rendered advisory services of any nature
or respect, or owe a fiduciary or similar duty to the Company, in connection with such transaction
or the process leading thereto.
15. Prior Agreements. This Agreement supersedes all prior agreements and understandings
(whether written or oral) between the Company and the Placement Agents, with respect to the subject
matter hereof.
16. Partial Unenforceability. The invalidity or unenforceability of any section, paragraph,
clause or provision of this Agreement shall not affect the validity or enforceability of any other
section, paragraph, clause or provision hereof. If any section, paragraph, clause or provision of
this Agreement is
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for any reason determined to be invalid or unenforceable, there shall be deemed to be made
such minor changes (and only such minor changes) as are necessary to make it valid and enforceable.
17. Applicable Law. No legal proceeding may be commenced, prosecuted or continued in any
court other than the courts of the State of New York located in the City and County of New York or
in the United States District Court for the Southern District of New York, which courts shall have
jurisdiction over the adjudication of such matters, and the Company and the Placement Agents each
hereby consent to the jurisdiction of such courts and personal service with respect thereto. The
Company and the Placement Agents each hereby consent to personal jurisdiction, service and venue in
any court in which any legal proceeding arising out of or in any way relating to this Agreement is
brought by any third party against the Company or the Placement Agents. The Company and the
Placement Agents each hereby waive all right to trial by jury in any legal proceeding (whether
based upon contract, tort or otherwise) in any way arising out of or relating to this Agreement.
The Company agrees that a final judgment in any such legal proceeding brought in any such court
shall be conclusive and binding upon the Company and the Placement Agents and may be enforced in
any other courts in the jurisdiction of which the Company is or may be subject, by suit upon such
judgment.
18. Authority of the Representative. Opco consents and agrees that Xxxxxxx will act as
Representative of the Placement Agents under this Agreement and with respect to the sale of the
Shares. Accordingly, Opco authorizes Xxxxxxx to manage the Offering and the sale of the Shares and
to take such action in connection therewith as Xxxxxxx in its sole discretion deems appropriate or
desirable, consistent with the provisions of the Agreement Among Underwriters previously entered
into between Xxxxxxx and Opco, taking into account that the Offering of the Shares will be in the
form of a best efforts placement and not a firm commitment underwriting. Opco agrees to comply
with such Agreement Among Underwriters and that any action taken under this Agreement by the
Representative shall be binding upon all of the Placement.
[The remainder of this page is intentionally left blank]
- 25 -
If the foregoing is in accordance with the Placement Agent’s understanding of our agreement,
kindly sign and return to the Company one of the counterparts hereof, whereupon it will become a
binding agreement between the Company and the Placement Agent in accordance with its terms.
| Very truly yours, | ||||||
| ELECTRO-OPTICAL SCIENCES, INC. | ||||||
| By: | ||||||
| Name: | ||||||
| Title: | ||||||
Signature Page to Placement Agency Agreement
The foregoing Placement Agency Agreement is hereby confirmed and accepted as of the date first
above written.
| XXXXXXX & COMPANY, LLC | ||||||
| By: | ||||||
| Name: | ||||||
| Title: | ||||||
| XXXXXXXXXXX & CO. INC. | ||||||
| By: | ||||||
| Name: | ||||||
| Title: | ||||||
Signature Page to Placement Agency Agreement
SCHEDULE I
General Use Issuer Free Writing Prospectus:
Additional Documents included in the General Disclosure Package:
Permitted Free Writing Prospectus:
SCHEDULE II
List of Persons Executing Lock-Ups
List of Persons Executing Lock-Ups
[Insert names of Section 16 reporting officers and directors]
EXHIBIT A
Form of Subscription Agreement
EXHIBIT B
Form of Lock-Up Agreement
EXHIBIT C
Form of Accountants’ Comfort Letter
EXHIBIT D
Form of Opinion of Counsel and Negative Assurance for the Company
