Letterhead of Rodman & Renshaw, LLC]
Exhibit
10.1
[Letterhead
of ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, LLC]
July
14,
2008
STRICTLY
CONFIDENTIAL
▇▇▇▇▇
▇▇▇▇▇
Vice
President – Chief Financial Officer and Treasurer
Lumera
Corporation
▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
Bothell,
WA 98011
Dear
▇▇.
▇▇▇▇▇:
This
letter (the “Agreement”) constitutes the agreement between Lumera Corporation
(the “Company”) and ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, LLC (“▇▇▇▇▇▇”) that ▇▇▇▇▇▇ shall serve
as the exclusive placement agent (the “Services”) for the Company, on a “best
efforts” basis, in connection with the proposed offer and placement (the
“Offering”) by the Company of securities of the Company (the “Securities”). The
terms of the Offering and the Securities shall be mutually agreed upon by the
Company and the investors and nothing herein implies that ▇▇▇▇▇▇ would have
the
power or authority to bind the Company or an obligation for the Company to
issue
any Securities or complete the Offering. The Company expressly acknowledges
and
agrees that ▇▇▇▇▇▇’▇ obligations hereunder are on a reasonable best efforts
basis only and that the execution of this Agreement does not constitute a
commitment by ▇▇▇▇▇▇ to purchase the Securities and does not ensure the
successful placement of the Securities or any portion thereof or the success
of
▇▇▇▇▇▇ with respect to securing any other financing on behalf of the Company.
If
▇▇▇▇▇▇ and the Company choose to have the Offering consist of registered
securities, then the provisions of Annex A will apply in addition to the
provisions set forth herein.
A. Fees
and Expenses.
In
connection with the Services described above, the Company shall pay to ▇▇▇▇▇▇
the following compensation:
1. Placement
Agent’s Fee.
The
Company shall pay to Rodman a cash placement fee (the “Placement Agent’s Fee”)
equal to 7% of the aggregate purchase price paid by each purchaser of Securities
that are placed in the Offering. The Placement Agent’s Fee shall be paid at the
closing of the Offering (the “Closing”) from the gross proceeds of the
Securities sold.
2. Warrants.
As
additional compensation for the Services, the Company shall issue to ▇▇▇▇▇▇
or
its designees at the closing of the Offering (the “Closing”), warrants (the
“▇▇▇▇▇▇ Warrants”) to purchase that number of shares of common stock of the
Company (“Shares”) equal to 7% of the aggregate number of Shares placed in the
Offering. The ▇▇▇▇▇▇ Warrants shall have the same terms, including exercise
price and registration rights (or registered status) as the warrants issued
to
investors (“Investors”) in the Offering. If no warrants are issued to Investors,
the ▇▇▇▇▇▇ Warrants shall have an exercise price equal to 120% of the price
at
which Shares are issued to Investors, an exercise period of five years and
registration rights (or registered status) for the Shares underlying the ▇▇▇▇▇▇
Warrants equivalent to those granted with respect to the Shares.
3. Expenses.
In
addition to any fees payable to ▇▇▇▇▇▇ hereunder, but only if an Offering is
consummated, the Company hereby agrees to reimburse ▇▇▇▇▇▇ for all reasonable
travel and other out-of-pocket expenses incurred in connection with ▇▇▇▇▇▇’▇
engagement, including the reasonable fees and expenses of ▇▇▇▇▇▇’▇ counsel. Such
reimbursement shall be limited to $25,000 without prior written approval by
the
Company and shall be paid at the Closing from the gross proceeds of the
Securities sold.
▇. ▇▇▇▇
and Termination of Engagement.
The
term (the “Term”) of ▇▇▇▇▇▇’▇ engagement will begin on the date hereof and end
on the earlier of the consummation of the Offering or 15 days after the receipt
by either party hereto of written notice of termination; provided that no such
notice may be given by the Company for a period of 30 days after the date
hereof. Notwithstanding anything to the contrary contained herein, the
provisions concerning confidentiality, indemnification, contribution and the
Company’s obligations to pay fees and reimburse expenses contained herein will
survive any expiration or termination of this Agreement.
C. Use
of
Information.
The
Company will furnish Rodman such written information as ▇▇▇▇▇▇ reasonably
requests in connection with the performance of its services hereunder. The
Company understands, acknowledges and agrees that, in performing its services
hereunder, ▇▇▇▇▇▇ will use and rely entirely upon such information as well
as
publicly available information regarding the Company and other potential parties
to an Offering and that ▇▇▇▇▇▇ does not assume responsibility for independent
verification of the accuracy or completeness of any information, whether
publicly available or otherwise furnished to it, concerning the Company or
otherwise relevant to an Offering, including, without limitation, any financial
information, forecasts or projections considered by ▇▇▇▇▇▇ in connection with
the provision of its services.
D. Confidentiality.
In
connection with the offering contemplated in this Agreement, the Company may
provide ▇▇▇▇▇▇ with non-public information regarding the Company and its
operations. ▇▇▇▇▇▇
agrees not to use any confidential information concerning the Company provided
to ▇▇▇▇▇▇ by the Company for any purposes other than those contemplated under
this Agreement,
and
agrees to keep all such non-public information confidential until the first
anniversary of this Agreement or until it otherwise becomes public through
no
fault of ▇▇▇▇▇▇, except as required by law. Notwithstanding anything to the
contrary, ▇▇▇▇▇▇ may disclose such non-public information to its agents and
advisors, who shall also be bound by the terms of this paragraph, whenever
▇▇▇▇▇▇ determines that such disclosure is necessary or appropriate to provide
the services contemplated in this Agreement. In
the
event of the consummation or public announcement of any Offering, ▇▇▇▇▇▇ shall
have the right to disclose its participation in such Offering, including,
without limitation, the placement at its cost of “tombstone” advertisements in
financial and other newspapers and journals. Notwithstanding the above, ▇▇▇▇▇▇
may disclose non-public information pursuant to any governmental, judicial
or
administrative order, subpoena or discovery request or request or inquiry of
a
regulatory or self-regulatory body, provided that ▇▇▇▇▇▇, to the extent legally
permitted, uses reasonable efforts to notify the Company sufficiently in advance
of such order, inquiry, subpoena or discovery or other request so that the
Company may seek to object to such order, subpoena, inquiry or request, or
to
make such disclosure subject to a protective order or confidentiality
agreement.
E. Securities
Matters.
The
Company shall be responsible for any and all compliance with the securities
laws
applicable to it, including Regulation D and the Securities Act of 1933, and
Rule 506 promulgated thereunder, and unless otherwise agreed in writing, all
state securities (“blue sky”) laws. ▇▇▇▇▇▇ agrees to cooperate with counsel to
the Company in that regard.
F. Indemnity.
1. In
connection with the Company’s engagement of ▇▇▇▇▇▇ as placement agent, the
Company hereby agrees to indemnify and hold harmless ▇▇▇▇▇▇ and its Affiliates,
and the respective controlling persons, directors, officers, shareholders,
agents and employees of any of the foregoing (collectively the “Indemnified
Persons”), from and against any and all claims, actions, suits, proceedings
(including those of shareholders), damages, liabilities and expenses incurred
by
any of them (including the reasonable fees and expenses of counsel),
(collectively a “Claim”), which (A)
are
related
to or arise out of (i) any actions taken or omitted to be taken (including
any
untrue statements made or any statements omitted to be made) by the Company,
or
(ii) any actions taken or omitted to be taken by any Indemnified Person in
connection with the Company’s engagement of ▇▇▇▇▇▇, or (B) otherwise relate to
or arise out of ▇▇▇▇▇▇’▇ activities on the Company’s behalf under ▇▇▇▇▇▇’▇
engagement, and the Company shall reimburse any Indemnified Person for all
expenses (including the reasonable fees and expenses of counsel) incurred by
such Indemnified Person in connection with investigating, preparing or defending
any such claim, action, suit or proceeding.
The
Company will not, however, be responsible for any Claim, which is finally
judicially determined to have resulted from
the
gross negligence or willful misconduct of any person seeking indemnification
for
such Claim. The Company further agrees that no Indemnified Person shall have
any
liability to the Company for or in connection with the Company’s engagement of
▇▇▇▇▇▇ except for any Claim incurred by the Company as a
result
of such Indemnified Person’s gross negligence or willful
misconduct.
2. The
Company further agrees that it will not, without the prior written consent
of
▇▇▇▇▇▇
(such
consent not to be unreasonably withheld),
settle,
compromise or consent to the entry of any judgment in any pending or threatened
Claim in respect of which indemnification may be sought hereunder (whether
or
not any Indemnified Person is an actual or potential party to such Claim),
unless such settlement, compromise or consent includes an unconditional,
irrevocable release of each Indemnified Person from any and all liability
arising out of such Claim.
No
Indemnified Person seeking indemnification, reimbursement or contribution under
this Agreement will, without the Company’s prior written consent (such consent
not to be unreasonably withheld), settle, compromise consent to the entry of
any
judgment in or otherwise seek to terminate any action, claim, suit or proceeding
referred to herein; provided that if at
any
time an Indemnified Person shall have requested the Company to reimburse him,
her or it for reasonable fees and expenses of counsel, and the Company has
not
reimbursed the Indemnified Person in accordance with such request prior to
the
date of such settlement, then such Indemnified Person may settle without the
Company’s written consent if (i) such settlement is entered into more than 45
days after receipt by the Company of the aforesaid request, (ii) the Company
shall have received notice of the terms of such settlement at least 30 days
prior to such settlement being entered into and (iii) the Company shall not
have
reimbursed the Indemnified Person in accordance with such request prior to
the
date of such settlement.
3. Promptly
upon receipt by an Indemnified Person of notice of any complaint or the
assertion or institution of any Claim with respect to which indemnification
is
being sought hereunder, such Indemnified Person shall notify the Company in
writing of such complaint or of such assertion or institution but failure to
so
notify the Company shall not relieve the Company from any obligation it may
have
hereunder, except and only to the extent such failure results in the forfeiture
by the Company of substantial rights and defenses. If the Company so elects
or
is requested by such Indemnified Person, the Company will assume the defense
of
such Claim, including the employment of counsel reasonably satisfactory to
such
Indemnified Person and the payment of the fees and expenses of such counsel.
In
the event, however, that legal counsel to such Indemnified Person reasonably
determines that having common counsel would present such counsel with a conflict
of interest or if the defendant in, or target of, any such Claim, includes
an
Indemnified Person and the Company, and legal counsel to such Indemnified Person
reasonably concludes that there may be legal defenses available to it or other
Indemnified Persons different from or in addition to those available to the
Company, then such Indemnified Person may employ its own separate counsel to
represent or defend him, her or it in any such Claim and the Company shall
pay
the reasonable fees and expenses of such counsel. Notwithstanding anything
herein to the contrary, if the Company fails timely or diligently to defend,
contest, or otherwise protect against any Claim, the relevant Indemnified Party
shall have the right, but not the obligation, to defend, contest, compromise,
settle, assert crossclaims, or counterclaims or otherwise protect against the
same, and shall be fully indemnified by the Company therefor, including without
limitation, for the reasonable fees and expenses of its counsel and all amounts
paid as a result of such Claim or the compromise or settlement thereof. In
addition, with respect to any Claim in which the Company assumes the defense,
the Indemnified Person shall have the right to participate in such Claim and
to
retain his, her or its own counsel therefor at his, her or its own
expense.
4. The
Company agrees that if any indemnity sought by an Indemnified Person hereunder
is held by a court to be unavailable for any reason,
other
than ▇▇▇▇▇▇’▇ ▇▇▇▇▇ negligence or willful misconduct,
then
(whether or not ▇▇▇▇▇▇ is the Indemnified Person), the Company and ▇▇▇▇▇▇ shall
contribute to the Claim for which such indemnity is held unavailable in such
proportion as is appropriate to reflect the relative benefits to the Company,
on
the one hand, and ▇▇▇▇▇▇ on the other, in connection with ▇▇▇▇▇▇’▇ engagement
referred to above, subject to the limitation that in no event shall the amount
of ▇▇▇▇▇▇’▇ contribution to such Claim exceed the amount of fees actually
received by ▇▇▇▇▇▇ from the Company pursuant to ▇▇▇▇▇▇’▇ engagement. The Company
hereby agrees that the relative benefits to the Company, on the one hand, and
▇▇▇▇▇▇ on the other, with respect to ▇▇▇▇▇▇’▇ engagement shall be deemed to be
in the same proportion as (a) the total value paid or proposed to be paid or
received by the Company or its stockholders as the case may be, pursuant to
the
Offering (whether or not consummated) for which ▇▇▇▇▇▇ is engaged to render
services bears to (b) the fee paid or proposed to be paid to ▇▇▇▇▇▇ in
connection with such engagement.
5. The
Company’s indemnity, reimbursement and contribution obligations under this
Agreement (a) shall be in addition to, and shall in no way limit or otherwise
adversely affect any rights that any Indemnified Party may have at law or at
equity and (b) shall be effective whether or not the Company is at fault in
any
way.
G. Limitation
of Engagement to the Company.
The
Company acknowledges that ▇▇▇▇▇▇ has been retained only by the Company, that
▇▇▇▇▇▇ is providing services hereunder as an independent contractor (and not
in
any fiduciary or agency capacity) and that the Company’s engagement of ▇▇▇▇▇▇ is
not deemed to be on behalf of, and is not intended to confer rights upon, any
shareholder, owner or partner of the Company or any other person not a party
hereto as against ▇▇▇▇▇▇ or any of its affiliates, or any of its or their
respective officers, directors, controlling persons (within the meaning of
Section 15 of the Act or Section 20 of the Securities Exchange Act of 1934),
employees or agents. Unless otherwise expressly agreed in writing by ▇▇▇▇▇▇,
no
one other than the Company is authorized to rely upon this Agreement or any
other statements or conduct of ▇▇▇▇▇▇, and no one other than the Company is
intended to be a beneficiary of this Agreement. The Company acknowledges that
any recommendation or advice, written or oral, given by ▇▇▇▇▇▇ to the Company
in
connection with ▇▇▇▇▇▇’▇ engagement is intended solely for the benefit and use
of the Company’s management and directors in considering a possible Offering,
and any such recommendation or advice is not on behalf of, and shall not confer
any rights or remedies upon, any other person or be used or relied upon for
any
other purpose. ▇▇▇▇▇▇ shall not have the authority to make any commitment
binding on the Company. The Company, in its sole discretion, shall have the
right to reject any investor introduced to it by ▇▇▇▇▇▇. The Company agrees
that
it will perform and comply with the covenants and other obligations set forth
in
the purchase agreement and related transaction documents between the Company
and
the investors in the Offering (the “Transaction
Documents”),
and
that ▇▇▇▇▇▇ will be entitled to rely on the representations, warranties,
agreements and covenants of the Company contained in the Transaction Documents
as if such representations, warranties, agreements and covenants were made
directly to ▇▇▇▇▇▇ by the Company.
H. Limitation
of ▇▇▇▇▇▇’▇ Liability to the Company.
▇▇▇▇▇▇
and the Company further agree that neither ▇▇▇▇▇▇ nor any of its affiliates
or
any of its their respective officers, directors, controlling persons (within
the
meaning of Section 15 of the Act or Section 20 of the Exchange Act of 1934),
employees or agents shall have any liability to the Company, its security
holders or creditors, or any person asserting claims on behalf of or in the
right of the Company (whether direct or indirect, in contract, tort, for an
act
of negligence or otherwise) for any losses, fees, damages, liabilities, costs,
expenses or equitable relief arising out of or relating to this Agreement or
the
Services rendered hereunder, except for losses, fees, damages, liabilities,
costs or expenses that arise out of or are based on any action of or failure
to
act by ▇▇▇▇▇▇ and that are finally judicially determined to have resulted solely
from the gross negligence or willful misconduct of ▇▇▇▇▇▇.
I. Governing
Law.
This
Agreement shall be governed by and construed in accordance with the laws of
the
State of New York applicable to agreements made and to be fully performed
therein. Any disputes which arise under this Agreement, even after the
termination of this Agreement, will be heard only in the state or federal courts
located in the City of New York, State of New York. The parties hereto expressly
agree to submit themselves to the jurisdiction of the foregoing courts in the
City of New York, State of New York. The parties hereto expressly waive any
rights they may have to contest the jurisdiction, venue or authority of any
court sitting in the City and State of New York. In the event of the bringing
of
any action, or suit by a party hereto against the other party hereto, arising
out of or relating to this Agreement, the party in whose favor the final
judgment or award shall be entered shall be entitled to have and recover from
the other party the costs and expenses incurred in connection therewith,
including its reasonable attorneys’ fees. Any rights to trial by jury with
respect to any such action, proceeding or suit are hereby waived by ▇▇▇▇▇▇
and
the Company.
J. Notices.
All
notices hereunder will be in writing and sent by certified mail, hand delivery,
overnight delivery or fax, if sent to ▇▇▇▇▇▇, to ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, LLC, ▇▇▇▇
▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, fax number (▇▇▇)
▇▇▇-▇▇▇▇, Attention: General Counsel, and if sent to the Company, to Lumera
Corporation, ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, fax number
(▇▇▇) ▇▇▇-▇▇▇▇, Attention: ▇▇▇▇▇ ▇▇▇▇▇▇. Notices sent by certified mail shall
be
deemed received five days thereafter, notices sent by hand delivery or overnight
delivery shall be deemed received on the date of the relevant written record
of
receipt, and notices delivered by fax shall be deemed received as of the date
and time printed thereon by the fax machine.
K. Miscellaneous.
This
Agreement shall not be modified or amended except in writing signed by ▇▇▇▇▇▇
and the Company. This Agreement shall be binding upon and inure to the benefit
of both ▇▇▇▇▇▇ and the Company and their respective assigns, successors, and
legal representatives. This Agreement constitutes the entire agreement of ▇▇▇▇▇▇
and the Company with respect to the subject matter hereof and supersedes any
prior agreements. If any provision of this Agreement is determined to be invalid
or unenforceable in any respect, such determination will not affect such
provision in any other respect, and the remainder of the Agreement shall remain
in full force and effect. This Agreement may be executed in counterparts
(including facsimile counterparts), each of which shall be deemed an original
but all of which together shall constitute one and the same
instrument.
In
acknowledgment that the foregoing correctly sets forth the understanding reached
by ▇▇▇▇▇▇ and the Company, please sign in the space provided below, whereupon
this letter shall constitute a binding Agreement as of the date indicated
above.
|
Very
truly yours,
|
|
|
▇▇▇▇▇▇
& ▇▇▇▇▇▇▇, LLC
|
|
|
By
|
/s/
▇▇▇▇▇▇▇ ▇. ▇▇▇
|
|
Name:
▇▇▇▇▇▇▇ ▇. ▇▇▇
|
|
|
Title:
General Counsel
|
|
Accepted
and Agreed:
LUMERA
CORPORATION
|
By
|
/s/ ▇▇▇▇▇ ▇▇▇▇▇ |
|
Name:
▇▇▇▇▇ ▇▇▇▇▇
|
|
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Title:
CFO
|
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Annex
A
Additional
Provisions With Respect to a Registered Offering
If
the
Offering is registered under the Securities Act of 1933, the following
additional provisions will apply in addition to those otherwise set forth in
the
Engagement Agreement:
SECTION
1. REGISTRATION The
Company represents and warrants to, and agrees with, the Placement Agent
that:
(A) The
Company has filed with the Securities and Exchange Commission (the “Commission”)
a registration statement on Form S-3 (Registration File No.
333-144674)
under
the Securities Act of 1933, as amended (the “Securities Act”), which became
effective on
December
5, 2007,
for the
registration under the Securities Act of the Shares. At the time of such filing,
the Company met the requirements of Form S-3 under the Securities Act. Such
registration statement meets the requirements set forth in Rule 415(a)(1)(x)
under the Securities Act and complies with said Rule. The Company will file
with
the Commission pursuant to Rule 424(b) under the Securities Act, and the rules
and regulations (the “Rules and Regulations”) of the Commission promulgated
thereunder, a supplement to the form of prospectus included in such registration
statement relating to the placement of the Shares and the plan of distribution
thereof and has advised the Placement Agent of all further information
(financial and other) with respect to the Company required to be set forth
therein. Such registration statement, including the exhibits thereto, as amended
at the date of this Agreement, is hereinafter called the “Registration
Statement”; such prospectus in the form in which it appears in the Registration
Statement is hereinafter called the “Base Prospectus”; and the supplemented form
of prospectus, in the form in which it will be filed with the Commission
pursuant to Rule 424(b) (including the Base Prospectus as so supplemented)
is
hereinafter called the “Prospectus Supplement.” Any reference in this Agreement
to the Registration Statement, the Base Prospectus or the Prospectus Supplement
shall be deemed to refer to and include the documents incorporated by reference
therein (the “Incorporated Documents”) pursuant to Item 12 of Form S-3 which
were filed under the Securities Exchange Act of 1934, as amended (the “Exchange
Act”), on or before the date of this Agreement, or the issue date of the Base
Prospectus or the Prospectus Supplement, as the case may be; and any reference
in this Agreement to the terms “amend,” “amendment” or “supplement” with respect
to the Registration Statement, the Base Prospectus or the Prospectus Supplement
shall be deemed to refer to and include the filing of any document under the
Exchange Act after the date of this Agreement, or the issue date of the Base
Prospectus or the Prospectus Supplement, as the case may be, deemed to be
incorporated therein by reference. All references in this Agreement to financial
statements and schedules and other information which is “contained,” “included,”
“described,” “referenced,” “set forth” or “stated” in the Registration
Statement, the Base Prospectus or the Prospectus Supplement (and all other
references of like import) shall be deemed to mean and include all such
financial statements and schedules and other information which is or is deemed
to be incorporated by reference in the Registration Statement, the Base
Prospectus or the Prospectus Supplement, as the case may be. No stop order
suspending the effectiveness of the Registration Statement or the use of the
Base Prospectus or the Prospectus Supplement has been issued, and no proceeding
for any such purpose is pending or, to the Company's knowledge, has been
initiated or is threatened by the Commission. For purposes of this Agreement,
“free writing prospectus” has the meaning set forth in Rule 405 under the
Securities Act and the “Time of Sale Prospectus” means the preliminary
prospectus, if any, together with the free writing prospectuses, if any, used
in
connection with the Placement, including any documents incorporated by reference
therein.
(B) The
Registration Statement (and any further documents to be filed with the
Commission) contains all exhibits and schedules as required by the Securities
Act. Each of the Registration Statement and any post-effective amendment
thereto, each at the time it became effective, complied in all material respects
with the Securities Act and the Exchange Act and the applicable Rules and
Regulations and did not and, as amended or supplemented, if applicable, will
not, contain
any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading. The Base Prospectus, the Time of Sale Prospectus, if any, and the
Prospectus Supplement, each as of its respective date, comply in all material
respects with the Securities Act and the Exchange Act and the applicable Rules
and Regulations. Each of the Base Prospectus, the Time of Sale Prospectus,
if
any, and the Prospectus Supplement, as amended or supplemented, did
not
and will not contain as of the date thereof any untrue statement of a material
fact or omit to state a material fact necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. The Incorporated Documents, when they were filed with the
Commission, conformed in all material respects to the requirements of the
Exchange Act and the applicable Rules and Regulations, and none of such
documents, when they were filed with the Commission, contained any untrue
statement of a material fact or omitted to state a material fact necessary
to
make the statements therein (with respect to Incorporated Documents incorporated
by reference in the Base Prospectus or Prospectus Supplement), in light of
the
circumstances under which they were made not misleading; and any further
documents so filed and incorporated by reference in the Base Prospectus, the
Time of Sale Prospectus, if any, or Prospectus Supplement, when such documents
are filed with the Commission, will conform in all material respects to the
requirements of the Exchange Act and the applicable Rules and Regulations,
as
applicable, and will not contain any untrue statement of a material fact or
omit
to state a material fact necessary to make the statements therein, in light
of
the circumstances under which they were made, not misleading. No post-effective
amendment to the Registration Statement reflecting any facts or events arising
after the date thereof which represent, individually or in the aggregate, a
fundamental change in the information set forth therein is required to be filed
with the Commission. There are no documents required to be filed with the
Commission in connection with the transaction contemplated hereby that (x)
have
not been filed as required pursuant to the Securities Act or (y) will not be
filed within the requisite time period. There are no contracts or other
documents required to be described in the Base Prospectus, the Time of Sale
Prospectus, if any, or Prospectus Supplement, or to be filed as exhibits or
schedules to the Registration Statement, which have not been described or filed
as required.
(C) The
Company is eligible to use free writing prospectuses in connection with the
Placement pursuant to Rules 164 and 433 under the Securities Act. Any free
writing prospectus that the Company is required to file pursuant to Rule 433(d)
under the Securities Act has been, or will be, filed with the Commission in
accordance with the requirements of the Securities Act and the applicable rules
and regulations of the Commission thereunder. Each free writing prospectus
that
the Company has filed, or is required to file, pursuant to Rule 433(d) under
the
Securities Act or that was prepared by or behalf of or used by the Company
complies or will comply in all material respects with the requirements of the
Securities Act and the applicable rules and regulations of the Commission
thereunder. The Company will not, without the prior consent of the Placement
Agent, prepare, use or refer to, any free writing prospectus.
(D) The
Company has delivered, or will as promptly as practicable deliver, to the
Placement Agent complete conformed copies of the Registration Statement and
of
each consent and certificate of experts, as applicable, filed as a part thereof,
and conformed copies of the Registration Statement (without exhibits), the
Base
Prospectus, the Time of Sale Prospectus, if any, and the Prospectus Supplement,
as amended or supplemented, in such quantities and at such places as the
Placement Agent reasonably requests. Neither the Company nor any of its
directors and officers has distributed and none of them will distribute, prior
to the Closing Date, any offering material in connection with the offering
and
sale of the Shares other than the Base Prospectus, the Time of Sale Prospectus,
if any, the Prospectus Supplement, the Registration Statement, copies of the
documents incorporated by reference therein and any other materials permitted
by
the Securities Act.
SECTION
2. REPRESENTATIONS
AND WARRANTIES Except
as
set forth under the corresponding section of the Disclosure Schedules which
Disclosure Schedules shall be deemed a part hereof, the Company hereby makes
the
representations and warranties set forth below to the Placement
Agent.
(A) Organization
and Qualification. All of the direct and indirect subsidiaries
(individually, a “Subsidiary”) of the Company are set forth on Schedule
3(A). The Company owns, directly or indirectly, all of the capital stock or
other equity interests of each Subsidiary free and clear of any “Liens”
(which for purposes of this Agreement shall mean a lien, charge, security
interest, encumbrance, right of first refusal, preemptive right or other
restriction), and all the issued and outstanding shares of capital stock of
each
Subsidiary are validly issued and are fully paid, non-assessable and free of
preemptive and similar rights to subscribe for or purchase securities. The
Company and each of the Subsidiaries is an entity duly incorporated or otherwise
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation or organization (as applicable), with the
requisite power and authority to own and use its properties and assets and
to
carry on its business as currently conducted. Neither the Company nor any
Subsidiary is in violation or default of any of the provisions of its respective
certificate or articles of incorporation, bylaws or other organizational or
charter documents. Each of the Company and the Subsidiaries is duly qualified
to
conduct business and is in good standing as a foreign corporation or other
entity in each jurisdiction in which the nature of the business conducted or
property owned by it makes such qualification necessary, except where the
failure to be so qualified or in good standing, as the case may be, could not
have or reasonably be expected to result in (i) a material adverse effect on
the
legality, validity or enforceability of any Transaction Document, (ii) a
material adverse effect on the results of operations, assets, business,
prospects or condition (financial or otherwise) of the Company and the
Subsidiaries, taken as a whole, or (iii) a material adverse effect on the
Company’s ability to perform in any material respect on a timely basis its
obligations under any Transaction Document (any of (i), (ii) or (iii), a
“Material Adverse Effect”) and no “Proceeding” (which for purposes
of this Agreement shall mean any action, claim, suit, investigation or
proceeding (including, without limitation, an investigation or partial
proceeding, such as a deposition), whether commenced or threatened) has been
instituted in any such jurisdiction revoking, limiting or curtailing or seeking
to revoke, limit or curtail such power and authority or
qualification.
(B) Authorization;
Enforcement. The Company has the requisite corporate power and authority to
enter into and to consummate the transactions contemplated by each of the
Transaction Documents and otherwise to carry out its obligations hereunder
and
thereunder. The execution and delivery of each of the Transaction Documents
by
the Company and the consummation by it of the transactions contemplated thereby
have been duly authorized by all necessary action on the part of the Company
and
no further action is required by the Company, its board of directors or its
stockholders in connection therewith other than in connection with the
“Required Approvals” (as defined in subsection 2(D) below). Each
Transaction Document to which the Company is a party has been (or upon delivery
will have been) duly executed by the Company and, when delivered in accordance
with the terms hereof and thereof, will constitute the valid and binding
obligation of the Company enforceable against the Company in accordance with
its
terms except (i) as limited by applicable bankruptcy, insolvency,
reorganization, moratorium and other laws of general application affecting
enforcement of creditors’ rights generally and (ii) as limited by laws relating
to the availability of specific performance, injunctive relief or other
equitable remedies.
(C) No
Conflicts. The execution, delivery and performance of the Transaction
Documents by the Company, the issuance and sale of the Securities and the
consummation by the Company of the other transactions contemplated hereby and
thereby do not and will not (i) conflict with or violate any provision of the
Company’s or any Subsidiary’s certificate or articles of incorporation, bylaws
or other organizational or charter documents, or (ii) conflict with, or
constitute a default (or an event that with notice or lapse of time or both
would become a default) under, result in the creation of any Lien upon any
of
the properties or assets of the Company or any Subsidiary, or give to others
any
rights of termination, amendment, acceleration or cancellation (with or without
notice, lapse of time or both) of, any agreement, credit facility, debt or
other
instrument (evidencing a Company or Subsidiary debt or otherwise) or other
understanding to which the Company or any Subsidiary is a party or by which
any
property or asset of the Company or any Subsidiary is bound or affected, or
(iii) subject to the Required Approvals, conflict with or result in a violation
of any law, rule, regulation, order, judgment, injunction, decree or other
restriction of any court or governmental authority to which the Company or
a
Subsidiary is subject (including federal and state securities laws and
regulations), or by which any property or asset of the Company or a Subsidiary
is bound or affected; except in the case of each of clauses (ii) and (iii),
such
as could not have or reasonably be expected to result in a Material Adverse
Effect.
(D) Filings,
Consents and Approvals. The Company is not required to obtain any consent,
waiver, authorization or order of, give any notice to, or make any filing or
registration with, any court or other federal, state, local or other
governmental authority or other “Person” (defined as an individual or
corporation, partnership, trust, incorporated or unincorporated association,
joint venture, limited liability company, joint stock company, government (or
an
agency or subdivision thereof) or other entity of any kind, including, without
limitation, any Trading Market) in connection with the execution, delivery
and
performance by the Company of the Transaction Documents, other than such filings
as are required to be made under applicable Federal and state securities laws
(collectively, the “Required Approvals”).
(E) Issuance
of the Securities; Registration. The Securities are duly authorized and,
when issued and paid for in accordance with the applicable Transaction
Documents, will be duly and validly issued, fully paid and nonassessable, free
and clear of all Liens imposed by the Company other than restrictions on
transfer provided for in the Transaction Documents. The Company has reserved
from its duly authorized capital stock the maximum number of shares of Common
Stock issuable pursuant to the Transaction Documents. The issuance by the
Company of the Securities has been registered under the Securities Act and
all
of the Securities are freely transferable and tradable by the Purchasers without
restriction (other than any restrictions arising solely from an act or omission
of a Purchaser). The Securities are being issued pursuant to the Registration
Statement and the issuance of the Securities has been registered by the Company
under the Securities Act. The Registration Statement is effective and available
for the issuance of the Securities thereunder and the Company has not received
any notice that the Commission has issued or intends to issue a stop-order
with
respect to the Registration Statement or that the Commission otherwise has
suspended or withdrawn the effectiveness of the Registration Statement, either
temporarily or permanently, or intends or has threatened in writing to do so.
The "Plan of Distribution" section under the Registration Statement permits
the
issuance and sale of the Securities hereunder. Upon receipt of the Securities,
the Purchasers will have good and marketable title to such Securities and the
Securities will be freely tradable on the “Trading Market” (which, for
purposes of this Agreement shall mean means the following markets or exchanges
on which the Common Stock is listed or quoted for trading on the date in
question: the Nasdaq Capital Market, the American Stock Exchange, the New York
Stock Exchange, the Nasdaq National Market or the OTC Bulletin Board).
(F) Capitalization.
The capitalization of the Company is as set forth on Schedule 3(F). The Company
has not issued any capital stock since its most recently filed periodic report
under the Exchange Act, other than pursuant to the exercise of employee stock
options under the Company’s stock option plans, the issuance of shares of Common
Stock to employees pursuant to the Company’s employee stock purchase plan and
pursuant to the conversion or exercise of securities exercisable, exchangeable
or convertible into Common Stock (“Common Stock Equivalents”). No Person
has any right of first refusal, preemptive right, right of participation, or
any
similar right to participate in the transactions contemplated by the Transaction
Documents. Except as a result of the purchase and sale of the Securities, there
are no outstanding options, warrants, script rights to subscribe to, calls
or
commitments of any character whatsoever relating to, or securities, rights
or
obligations convertible into or exercisable or exchangeable for, or giving
any
Person any right to subscribe for or acquire, any shares of Common Stock, or
contracts, commitments, understandings or arrangements by which the Company
or
any Subsidiary is or may become bound to issue additional shares of Common
Stock
or Common Stock Equivalents. The issuance and sale of the Securities will not
obligate the Company to issue shares of Common Stock or other securities to
any
Person (other than the Purchasers) and will not result in a right of any holder
of Company securities to adjust the exercise, conversion, exchange or reset
price under such securities. All of the outstanding shares of capital stock
of
the Company are validly issued, fully paid and nonassessable, have been issued
in compliance with all federal and state securities laws, and none of such
outstanding shares was issued in violation of any preemptive rights or similar
rights to subscribe for or purchase securities. No further approval or
authorization of any stockholder, the Board of Directors of the Company or
others is required for the issuance and sale of the Securities. There are no
stockholders agreements, voting agreements or other similar agreements with
respect to the Company’s capital stock to which the Company is a party or, to
the knowledge of the Company, between or among any of the Company’s
stockholders.
(G) SEC
Reports; Financial Statements. The Company has complied in all material
respects with requirements to file all reports, schedules, forms, statements
and
other documents required to be filed by it under the Securities Act and the
Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, for the
two
years preceding the date hereof (or such shorter period as the Company was
required by law to file such material) (the foregoing materials together with
the Base Prospectus and the Prospectus Supplement, including the exhibits
thereto and documents incorporated by reference therein, being collectively
referred to herein as the “SEC Reports”) on a timely basis or has
received a valid extension of such time of filing and has filed any such SEC
Reports prior to the expiration of any such extension. As of their respective
dates, the SEC Reports complied in all material respects with the requirements
of the Securities Act and the Exchange Act and the rules and regulations of
the
Commission promulgated thereunder, and none of the SEC Reports, when filed,
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading. The financial statements of the Company included in the SEC Reports
comply in all material respects with applicable accounting requirements and
the
rules and regulations of the Commission with respect thereto as in effect at
the
time of filing. Such financial statements have been prepared in accordance
with
United States generally accepted accounting principles applied on a consistent
basis during the periods involved (“GAAP”), except as may be otherwise
specified in such financial statements or the notes thereto and except that
unaudited financial statements may not contain all footnotes required by GAAP,
and fairly present in all material respects the financial position of the
Company and its consolidated subsidiaries as of and for the dates thereof and
the results of operations and cash flows for the periods then ended, subject,
in
the case of unaudited statements, to normal, immaterial, year-end audit
adjustments.
(H) Material
Changes; Undisclosed Events, Liabilities or Developments. Since the date of
the last quarterly financial statements included within the SEC Reports, except
as specifically disclosed in a subsequent SEC Report filed prior to the date
hereof, (i) there has been no event, occurrence or development that has had
or
that could reasonably be expected to result in a Material Adverse Effect, (ii)
the Company has not incurred any material liabilities (contingent or otherwise)
other than (A) trade payables and accrued expenses incurred in the ordinary
course of business consistent with past practice and (B) liabilities not
required to be reflected in the Company’s financial statements pursuant to GAAP
or required to be disclosed in filings made with the Commission, (iii) the
Company has not altered its method of accounting, (iv) the Company has not
declared or made any dividend or distribution of cash or other property to
its
stockholders or purchased, redeemed or made any agreements to purchase or redeem
any shares of its capital stock and (v) the Company has not issued any equity
securities to any officer, director or “Affiliate” (defined as any Person
that, directly or indirectly through one or more intermediaries, controls or
is
controlled by or is under common control with a Person, as such terms are used
in and construed under Rule 144 under the Securities Act), except pursuant
to
existing Company stock option plans. The Company does not have pending before
the Commission any request for confidential treatment of information. Other
than
the transactions contemplated hereby, no event, liability or development has
occurred or exists with respect to the Company or its Subsidiaries or their
respective business, properties, operations or financial condition, that would
be required to be disclosed by the Company under applicable securities laws
at
the time this representation is made that has not been publicly disclosed 1
Trading Day prior to the date that this representation is made.
(I) Litigation.
Except as specifically disclosed in the SEC Reports, there is no action, suit,
inquiry, notice of violation, Proceeding or investigation pending or, to the
knowledge of the Company, threatened against or affecting the Company, any
Subsidiary or any of their respective properties before or by any court,
arbitrator, governmental or administrative agency or regulatory authority
(federal, state, county, local or foreign) (collectively, an “Action”)
which (i) adversely affects or challenges the legality, validity or
enforceability of any of the Transaction Documents or the Securities or (ii)
could, if there were an unfavorable decision, have or reasonably be expected
to
result in a Material Adverse Effect. Neither the Company nor any Subsidiary,
nor
any director or officer thereof, is or has been the subject of any Action
involving a claim of violation of or liability under federal or state securities
laws or a claim of breach of fiduciary duty that could have or reasonably be
expected to result in a Material Adverse Effect. There has not been, and to
the
knowledge of the Company, there is not pending or contemplated, any
investigation by the Commission involving the Company or any current or former
director or officer of the Company. The Commission has not issued any stop
order
or other order suspending the effectiveness of any registration statement filed
by the Company or any Subsidiary under the Exchange Act or the Securities Act.
None of the Company’s or its Subsidiaries’ employees is a member of a union that
relates to such employee’s relationship with the Company, and neither the
Company or any of its Subsidiaries is a party to a collective bargaining
agreement, and the Company and its Subsidiaries believe that their relationships
with their employees are good. No executive officer, to the knowledge of the
Company, is, or is now expected to be, in violation of any material term of
any
employment contract, confidentiality, disclosure or proprietary information
agreement or non-competition agreement, or any other contract or agreement
or
any restrictive covenant, and the continued employment of each such executive
officer does not subject the Company or any of its Subsidiaries to any liability
with respect to any of the foregoing matters, except, in each case, matters
that, individually or in the aggregate, could not reasonably be expected to
have
a Material Adverse Effect. The Company and its Subsidiaries are in compliance
with all U.S. federal, state, local and foreign laws and regulations relating
to
employment and employment practices, terms and conditions of employment and
wages and hours, except where the failure to be in compliance could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.
(J) Labor
Relations. No material labor dispute exists or, to the knowledge of the
Company, is imminent with respect to any of the employees of the Company which
could reasonably be expected to result in a Material Adverse
Effect.
(K) Compliance.
Neither the Company nor any Subsidiary (i) is in default under or in violation
of (and no event has occurred that has not been waived that, with notice or
lapse of time or both, would result in a default by the Company or any
Subsidiary under), nor has the Company or any Subsidiary received notice of
a
claim that it is in default under or that it is in violation of, any indenture,
loan or credit agreement or any other agreement or instrument to which it is
a
party or by which it or any of its properties is bound (whether or not such
default or violation has been waived), (ii) is in violation of any order of
any
court, arbitrator or governmental body, or (iii) is or has been in violation
of
any statute, rule or regulation of any governmental authority, including without
limitation all foreign, federal, state and local laws applicable to its business
and all such laws that affect the environment, except in each case as could
not
have or reasonably be expected to result in a Material Adverse
Effect.
(L) Regulatory
Permits. The Company and the Subsidiaries possess all certificates,
authorizations and permits issued by the appropriate federal, state, local
or
foreign regulatory authorities necessary to conduct their respective businesses
as described in the SEC Reports, except where the failure to possess such
permits could not have or reasonably be expected to result in a Material Adverse
Effect (“Material Permits”), and neither the Company nor any Subsidiary
has received any notice of proceedings relating to the revocation or
modification of any Material Permit.
(M) Title
to Assets. The Company and the Subsidiaries have good and marketable title
in fee simple to all real property owned by them that is material to the
business of the Company and the Subsidiaries and good and marketable title
in
all personal property owned by them that is material to the business of the
Company and the Subsidiaries, in each case free and clear of all Liens, except
for Liens as do not materially affect the value of such property and do not
materially interfere with the use made and proposed to be made of such property
by the Company and the Subsidiaries and Liens for the payment of federal, state
or other taxes, the payment of which is neither delinquent nor subject to
penalties. Any real property and facilities held under lease by the Company
and
the Subsidiaries are held by them under valid, subsisting and enforceable leases
of which the Company and the Subsidiaries are in compliance except
as
would not reasonably be expected to result in a Material Adverse
Effect.
(N) Patents
and Trademarks. The Company and the Subsidiaries have, or have rights to
use, all patents, patent applications, trademarks, trademark applications,
service marks, trade names, trade secrets, inventions, copyrights, licenses
and
other similar intellectual property rights necessary or material for use in
connection with their respective businesses as described in the SEC Reports
and
which the failure to so have could have a Material Adverse Effect (collectively,
the “Intellectual Property Rights”). Neither the Company nor any
Subsidiary has received a notice (written or otherwise) that the Intellectual
Property Rights used by the Company or any Subsidiary violates or infringes
upon
the rights of any Person. To the knowledge of the Company, all such Intellectual
Property Rights are enforceable in all material respects and there is no
existing infringement by another Person of any of the Intellectual Property
Rights of others. The Company and its Subsidiaries have taken reasonable
security measures to protect the secrecy, confidentiality and value of all
of
their intellectual properties, except where failure to do so could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.
(O) Insurance.
The Company and the Subsidiaries are insured by insurers of recognized financial
responsibility against such losses and risks and in such amounts as are prudent
and customary in the businesses in which the Company and the Subsidiaries are
engaged, including, but not limited to, directors and officers insurance
coverage at least equal to the aggregate subscription amount under the
Transaction Documents. Neither the Company nor any Subsidiary has any reason
to
believe that it will not be able to renew its existing insurance coverage as
and
when such coverage expires or to obtain similar coverage from similar insurers
as may be necessary to continue its business without a significant increase
in
cost.
(P) Transactions
With Affiliates and Employees. Except as set forth in the SEC Reports, none
of the officers or directors of the Company and, to the knowledge of the
Company, none of the employees of the Company is presently a party to any
transaction with the Company or any Subsidiary (other than for services as
employees, officers and directors), including any contract, agreement or other
arrangement providing for the furnishing of services to or by, providing for
rental of real or personal property to or from, or otherwise requiring payments
to or from any officer, director or such employee or, to the knowledge of the
Company, any entity in which any officer, director, or any such employee has
a
substantial interest or is an officer, director, trustee or partner, other
than
(i) for payment of salary or consulting fees for services rendered, (ii)
reimbursement for expenses incurred on behalf of the Company and (iii) for
other
employee benefits, including stock option agreements under any stock option
plan
of the Company.
(Q) ▇▇▇▇▇▇▇▇-▇▇▇▇▇.
The Company is in material compliance with all provisions of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇
Act of 2002 which are applicable to it as of the date hereof and of the closing
date of the Placement.
(R)
Certain
Fees. Except as otherwise provided in this Agreement, no brokerage or
finder’s fees or commissions are or will be payable by the Company to any
broker, financial advisor or consultant, finder, placement agent, investment
banker, bank or other Person with respect to the transactions contemplated
by
the Transaction Documents. The Purchasers shall have no obligation with respect
to any fees or with respect to any claims made by or on behalf of other Persons
for fees of a type contemplated in this Section that may be due in connection
with the transactions contemplated by the Transaction Documents.
(S) Trading
Market Rules. The issuance and sale of the Securities hereunder does not
contravene the rules and regulations of the Trading Market.
(T) Investment
Company. The Company is not, and is not an Affiliate of, and immediately
after receipt of payment for the Securities, will not be or be an Affiliate
of,
an “investment company” within the meaning of the Investment Company Act of
1940, as amended. The Company shall conduct its business in a manner so that
it
will not become subject to the Investment Company Act.
(U) Registration
Rights. No Person has any right to cause the Company to effect the
registration under the Securities Act of any securities of the
Company.
(V) Listing
and Maintenance Requirements. The Company’s Common Stock is registered
pursuant to Section 12(b) or 12(g) of the Exchange Act, and the Company has
taken no action designed to, or which to its knowledge is likely to have the
effect of, terminating the registration of the Common Stock under the Exchange
Act nor has the Company received any notification that the Commission is
contemplating terminating such registration. Except as specifically disclosed
in
the SEC Reports, the Company has not, in the 12 months preceding the date
hereof, received notice from any Trading Market on which the Common Stock is
or
has been listed or quoted to the effect that the Company is not in compliance
with the listing or maintenance requirements of such Trading Market. The Company
is, and has no reason to believe that it will not in the foreseeable future
continue to be, in compliance with all such listing and maintenance
requirements.
(W) Application
of Takeover Protections. The Company and its Board of Directors have taken
all necessary action, if any, in order to render inapplicable any control share
acquisition, business combination, poison pill (including any distribution
under
a rights agreement) or other similar anti-takeover provision under the Company’s
Certificate of Incorporation (or similar charter documents) or the laws of
its
state of incorporation that is or could become applicable to the Purchasers
as a
result of the Purchasers and the Company fulfilling their obligations or
exercising their rights under the Transaction Documents, including without
limitation as a result of the Company’s issuance of the Securities and the
Purchasers’ ownership of the Securities.
(X) Solvency.
Based on the financial condition of the Company as of the Closing Date after
giving effect to the receipt by the Company of the proceeds from the sale of
the
Securities hereunder, (i) the Company’s fair saleable value of its assets
exceeds the amount that will be required to be paid on or in respect of the
Company’s existing debts and other liabilities (including known contingent
liabilities) as they mature; (ii) the Company’s assets do not constitute
unreasonably small capital to carry on its business for the current fiscal
year
as now conducted and as proposed to be conducted including its capital needs
taking into account the particular capital requirements of the business
conducted by the Company, and projected capital requirements and capital
availability thereof; and (iii) the current cash flow of the Company, together
with the proceeds the Company would receive, were it to liquidate all of its
assets, after taking into account all anticipated uses of the cash, would be
sufficient to pay all amounts on or in respect of its debt when such amounts
are
required to be paid. The Company does not intend to incur debts beyond its
ability to pay such debts as they mature (taking into account the timing and
amounts of cash to be payable on or in respect of its debt). The SEC Reports
set
forth as of the date thereof all material outstanding secured and unsecured
Indebtedness of the Company or any Subsidiary, or for which the Company or
any
Subsidiary has commitments, required to be included therein under the applicable
rules and regulations of the Exchange Act (“Indebtedness”). Neither the Company
nor any Subsidiary is in default with respect to any Indebtedness.
(Y) Tax
Status. Except for matters that would not, individually or in the aggregate,
have or reasonably be expected to result in a Material Adverse Effect, the
Company and each Subsidiary has filed all necessary federal, state and foreign
income and franchise tax returns and has paid or accrued all taxes shown as
due
thereon, and the Company has no knowledge of a tax deficiency which has been
asserted or threatened against the Company or any Subsidiary.
(Z) Foreign
Corrupt Practices. Neither the Company, nor to the knowledge of the Company,
any agent or other person acting on behalf of the Company, has (i) directly
or
indirectly, used any funds for unlawful contributions, gifts, entertainment
or
other unlawful expenses related to foreign or domestic political activity,
(ii)
made any unlawful payment to foreign or domestic government officials or
employees or to any foreign or domestic political parties or campaigns from
corporate funds, (iii) failed to disclose fully any contribution made by the
Company (or made by any person acting on its behalf of which the Company is
aware) which is in violation of law, or (iv) violated in any material respect
any provision of the Foreign Corrupt Practices Act of 1977, as
amended.
(AA) Accountants.
The Company’s accountants are PriceWaterhouseCoopers LLP. To the knowledge of
the Company, such accountants, who the Company expects will express their
opinion with respect to the financial statements to be included in the Company’s
next Annual Report on Form 10-K, are a registered public accounting firm as
required by the Securities Act.
(BB) Regulation
M Compliance. The Company has not, and to its knowledge no one acting on its
behalf has, (i) taken, directly or indirectly, any action designed to cause
or
to result in the stabilization or manipulation of the price of any security
of
the Company to facilitate the sale or resale of any of the Securities, (ii)
sold, bid for, purchased, or, paid any compensation for soliciting purchases
of,
any of the Securities (other than for the placement agent’s placement of the
Securities), or (iii) paid or agreed to pay to any person any compensation
for
soliciting another to purchase any other securities of the Company.
(CC) Approvals.
The issuance and listing on the Nasdaq Capital Market of the Shares requires
no
further approvals, including but not limited to, the approval of
shareholders.
(DD) NASD
Affiliations.
There
are no affiliations with any NASD member firm among the Company’s officers,
directors or, to the knowledge of the Company, any five percent (5%) or greater
stockholder of the Company, except as set forth in the Base
Prospectus.
SECTION
3. CLOSING.
The
obligations of the Placement Agent and the Purchasers, and the closing of the
sale of the Securities hereunder are subject to the accuracy, when made and
on
the Closing Date, of the representations and warranties on the part of the
Company and its Subsidiaries contained herein, to the accuracy of the statements
of the Company and its Subsidiaries made in any certificates pursuant to the
provisions hereof, to the performance by the Company and its Subsidiaries of
their obligations hereunder, and to each of the following additional terms
and
conditions:
(A) No
stop
order suspending the effectiveness of the Registration Statement shall have
been
issued and no proceedings for that purpose shall have been initiated or
threatened by the Commission, and any request for additional information on
the
part of the Commission (to be included in the Registration Statement, the Base
Prospectus or the Prospectus Supplement or otherwise) shall have been complied
with to the reasonable satisfaction of the Placement Agent. Any filings required
to be made by the Company in shall have been timely filed with the
Commission.
(B) All
corporate proceedings and other legal matters incident to the authorization,
form, execution, delivery and validity of each of this Agreement, the
Securities, the Registration Statement, the Base Prospectus and the Prospectus
Supplement and all other legal matters relating to this Agreement and the
transactions contemplated hereby shall be reasonably satisfactory in all
material respects to counsel for the Placement Agent, and the Company shall
have
furnished to such counsel all documents and information that they may reasonably
request to enable them to pass upon such matters.
(C) The
Placement Agent shall have received from outside counsel to the Company such
counsel’s written opinion, addressed to the Placement Agent and the Purchasers
dated as of the Closing Date, in form and substance reasonably satisfactory
to
the Placement Agent, which opinion shall include a “10b-5” representation from
such counsel.
(D) Neither
the Company nor any of its Subsidiaries shall have sustained since the date
of
the latest audited financial statements included or incorporated by reference
in
the Base Prospectus
or the
Prospectus Supplement,
any
loss or interference with its business from fire, explosion, flood, terrorist
act or other calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree, otherwise than as
set
forth in or contemplated by the Base Prospectus or
the
Prospectus Supplement and
(ii)
since such date there shall not have been any change in the capital stock or
long-term debt of the Company or any 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, results of operations or prospects of
the Company and its Subsidiaries,
otherwise than as set forth in or contemplated by the Base
Prospectus
or the
Prospectus Supplement,
the
effect of which, in any such case described in clause (i) or (ii), is, in the
judgment of the Placement Agent, so material and adverse as to make it
impracticable or inadvisable to proceed with the sale or delivery of the
Securities on the terms and in the manner contemplated by the Base Prospectus,
the Time of Sale Prospectus, if any, and the Prospectus Supplement.
(E) The
Common Stock is registered under the Exchange Act and, as of the Closing Date,
the Shares shall be listed and admitted and authorized for trading on
the
NASDAQ Global
Market,
and
satisfactory evidence of such actions shall have been provided to the Placement
Agent. The Company shall have taken no action designed to, or likely to have
the
effect of terminating the registration of the Common Stock under the Exchange
Act or delisting or suspending from trading the Common Stock from the
NASDAQ Global
Market,
nor has
the Company received any information suggesting that the Commission or
the
NASDAQ Global
Market
is
contemplating terminating such registration or listing.
(F) Subsequent
to the execution and delivery of this Agreement, there shall not have occurred
any of the following (each, a “Material Adverse Change”): (i) trading in
securities generally on the New York Stock Exchange, the NASDAQ
Global
Market
or the American Stock Exchange or in the over-the-counter market, or trading
in
any securities of the Company on any exchange or in the over-the-counter market,
shall have been suspended or minimum or maximum prices or maximum ranges for
prices shall have been established on any such exchange or such market by the
Commission, by such exchange or by any other regulatory body or governmental
authority having jurisdiction, (ii) a banking moratorium shall have been
declared by federal or state authorities or a material disruption has occurred
in commercial banking or securities settlement or clearance services in the
United States, (iii) the United States shall have become engaged in hostilities
in which it is not currently engaged, the subject of an act of terrorism, there
shall have been an escalation in hostilities involving the United States, or
there shall have been a declaration of a national emergency or war by the United
States, or (iv) there shall have occurred any other calamity or crisis or any
change in general economic, political or financial conditions in the United
States or elsewhere, if the effect of any such event in clause (iii) or (iv)
makes it, in the sole judgment of the Placement Agent, impracticable or
inadvisable to proceed with the sale or delivery of the Securities on the terms
and in the manner contemplated by the Base Prospectus and the Prospectus
Supplement.
(G) No
action
shall have been taken and no statute, rule, regulation or order shall have
been
enacted, adopted or issued by any governmental agency or body which would,
as of
the Closing Date, prevent the issuance or sale of the Securities or materially
and adversely affect or potentially and adversely affect the business or
operations of the Company; and no injunction, restraining order or order of
any
other nature by any federal or state court of competent jurisdiction shall
have
been issued as of the Closing Date which would prevent the issuance or sale
of
the Securities or materially and adversely affect or potentially and adversely
affect the business or operations of the Company.
(H) The
Company shall have,
to the
extent required under the relevant Rules and Regulations,
prepared
and filed with the Commission a Current Report on Form 8-K with respect to
the
Placement, including as an exhibit thereto this Agreement.
(I) The
Company shall have entered into purchase agreements with each of the Purchasers
and such agreements shall be in full force and effect and shall contain
representations and warranties of the Company as agreed between the Company
and
the Purchasers.
(J) Financial
Industry Regulatory Authority (“FINRA”) shall have raised no objection to the
fairness and reasonableness of the terms and arrangements of this Agreement.
In
addition, the Company shall, if requested by the Placement Agent, make or
authorize Placement Agent’s counsel to make on the Company’s behalf, an Issuer
Filing with FINRA's Corporate Financing Department pursuant to Financial FINRA
Rule 2710 with respect to the Registration Statement and pay all filing fees
required in connection therewith.
(K) Prior
to
the Closing Date, the Company shall have furnished to the Placement Agent such
further information, certificates and documents as the Placement Agent may
reasonably request.
All
opinions, letters, evidence and certificates mentioned above or elsewhere in
this Agreement shall be deemed to be in compliance with the provisions hereof
only if they are in form and substance reasonably satisfactory to counsel for
the Placement Agent.
Schedule
3(A)
Subsidiaries
Plexera
Bioscience LLC
Schedule
3(F)
Capitalization
The
authorized capital stock of the Company consists of 120,000,000 shares of
Common
Stock and 30,000,000 shares of preferred stock, par value $0.001 per share.
As
of July 11, 2008 there were 20,088,352 shares of Common Stock and no shares
of
preferred stock issued and outstanding. As of June 30, 2008, the Company
had
reserved (i) 2,644,980 shares of Common Stock for issuance under compensation
plans approved by shareholders and (ii) 1,630,546 shares of Common Stock
for
issuance pursuant to outstanding warrants to purchase Common
Stock.