3,870,000 Shares of Common Stock HUDSON TECHNOLOGIES, INC. PLACEMENT AGENT AGREEMENT
3,870,000
Shares of Common Stock
▇▇▇▇▇▇
TECHNOLOGIES, INC.
July 31,
2009
▇▇▇▇
Capital Partners, LLC
▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Gentlemen:
1. Introduction. ▇▇▇▇▇▇
Technologies, Inc., a New York corporation (the “Company”), proposes
to issue and sell to the purchasers, pursuant to the terms and conditions of
this Placement Agent Agreement (this “Agreement”) and the
subscription agreements in the form of Exhibit A
attached hereto (each a “Subscription
Agreement,” and collectively, the “Subscription
Agreements”) entered into with the purchasers identified therein (each a
“Purchaser” and
collectively, the “Purchasers”), up to
an aggregate of 3,870,000 shares (hereinafter the “Shares”) of its
common stock, par value $0.01 per share (the “Common Stock”). The
Company hereby confirms that ▇▇▇▇ Capital Partners, LLC (“▇▇▇▇ Capital,” or the
“Placement
Agent”) acted as Placement Agent in accordance with the terms and
conditions hereof.
2. Agreement
to Act as Placement Agent; Placement of Securities. On the
basis of the representations, warranties and agreements of the Company contained
herein, and subject to all the terms and conditions of this
Agreement:
(a) The
Company has authorized and hereby acknowledges that the Placement Agent has
acted as its exclusive agent to solicit offers for the purchase of all or part
of the Shares from the Company in connection with the proposed offering of the
Shares (the “Offering”). Until
the Termination Date (as defined in Section 4
hereof), the Company shall not, without the prior written consent of the
Placement Agent, solicit or accept offers to purchase the Shares otherwise than
through the Placement Agent.
(b) The
Company hereby acknowledges that the Placement Agent, as agent of the Company,
has agreed to use its 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 Agent
shall use commercially reasonable efforts to assist the Company in obtaining
performance by each Purchaser whose offer to purchase the Shares was solicited
by the Placement Agent and accepted by the Company, but the Placement Agent
shall not, except as otherwise provided in this Agreement, be obligated to
disclose the identity of any potential purchaser or have any liability to the
Company in the event any such purchase is not consummated for any
reason. Under no circumstances will the Placement Agent be obligated
to underwrite or purchase any Shares for its own account and, in soliciting
purchases of Shares, the Placement Agent shall act solely as the Company’s agent
and not as principal. Notwithstanding the foregoing and except as
otherwise provided in Section 2, it is
understood and agreed that the Placement Agent (or its affiliates) may, solely
at its discretion and without any obligation to do so, purchase Shares as
principal.
(c) Offers
for the purchase of Shares were solicited by the Placement Agent as agent for
the Company at such times and in such amounts as the Placement Agent deemed
advisable. The Placement Agent communicated 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. The
Placement Agent has the right, in its discretion, 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 this Agreement.
(d) The
Shares are being sold to the Purchaser(s) at a price of $1.15 per Share (the
“Offering
Price”). The purchases of the Shares by the Purchaser(s) shall
be evidenced by the execution of Subscription Agreements by each of the
Purchasers and the Company.
(e) (i) As
compensation for services rendered, on each Closing Date (as defined in Section 4
hereof), the Company shall pay to the Placement Agent by wire transfer of
immediately available funds to an account or accounts designated by the
Placement Agent, an aggregate amount equal to six percent (6%) of the gross
proceeds received by the Company from the sale of the Shares on such Closing
Date; provided,
however, that
the Placement Agent shall not be entitled to any compensation in connection with
the sale of any Shares to those Purchasers listed on Schedule A
hereto. Such amount may be deducted from the payment made by the
Purchaser(s) to the Company and paid directly to the Placement Agent on the
applicable Closing Date.
(ii) As
additional compensation for services rendered, the Company shall issue to the
Placement Agent on each Closing Date warrants (the “Placement Agent
Warrants”) for the purchase of an aggregate amount of shares of Common
Stock equal to five percent (5%) of the Shares issued to the Purchasers
on such Closing Date pursuant to the terms of this Agreement, at an exercise
price equal to 125% of the Offering Price, during a term commencing six (6)
months from the applicable Closing Date and expiring five (5) years from the
applicable Closing Date, in substantially the form attached hereto as Exhibit B. The
shares of Common Stock issuable upon exercise of the Placement Agent Warrants
are referred to herein as the “Placement Agent Warrant
Shares.”
(iii) 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 the Placement Agent 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(a)
herein.
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3. Representations
and Warranties of the Company.
(a) The
Company represents and warrants to the Placement Agent and the Purchasers as of
the date hereof, and agrees with the Placement Agent and the Purchasers
that:
(i) A
registration statement of the Company on Form S-3 (File No. 333-151973)
(including all pre-effective amendments thereto, the “Initial Registration
Statement”) in respect of the Shares has been filed with the Securities
and Exchange Commission (the “Commission”) pursuant
to Rule 415 under the Securities Act of 1933, as amended (the “Securities
Act”). The Company meets the requirements for use of Form S-3
under the Securities Act, and the rules and regulations of the Commission
thereunder (the “Rules
and Regulations”). The Initial Registration Statement and any
post-effective amendment thereto, each in the form heretofore delivered to the
Placement Agent, and, excluding exhibits thereto, have been declared effective
by the Commission in such form and meet the requirements of the Securities Act
and the Rules and Regulations. Other than (A) a registration
statement, if any, increasing the size of the offering filed pursuant to Rule
462(b) under the Securities Act and the Rules and Regulations (a “Rule 462(b) Registration
Statement”) and (B) the Prospectus (as defined below) contemplated by
this Agreement to be filed pursuant to Rule 424(b) of the Rules and Regulations
in accordance with Section 5 hereof
and (C) any Issuer Free Writing Prospectus (as defined below), no other document
with respect to the offer and sale of the Shares has heretofore been filed with
the Commission. No stop order suspending the effectiveness of the
Initial Registration Statement, any post-effective amendment thereto or the Rule
462(b) Registration Statement, if any, has been issued and no proceeding for
that purpose or pursuant to Section 8A of the Securities Act has been
initiated or threatened by the Commission. The prospectus filed as
part of the registration statement in the form in which it has most recently
been filed with the Commission on or prior to the date of this Agreement, is
hereinafter called the “Base
Prospectus.” The various parts of the Initial Registration
Statement and the Rule 462(b) Registration Statement, if any, in each case
including all exhibits thereto and including (A) the information contained in
the Prospectus filed with the Commission pursuant to Rule 424(b) of the Rules
and Regulations and deemed by virtue of Rules 430B and 430C under the Securities
Act to be part of the Initial Registration Statement at the time it became
effective and (B) the documents incorporated by reference in the Rule 462(b)
Registration Statement at the time the Rule 462(b) Registration Statement became
effective, are hereinafter collectively called the “Registration
Statement.” The base prospectus included in the Initial
Registration Statement at the time of effectiveness thereof, as supplemented by
the final prospectus supplement relating to the offer and sale of the Shares, in
the form filed pursuant to and within the time limits described in Rule 424(b)
under the Rules and Regulations, is hereinafter called the “Prospectus.”
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Any
reference herein to any Registration Statement or the Prospectus shall be deemed
to refer to and include the documents incorporated by reference
therein. Any reference to any amendment or supplement to the
Prospectus shall be deemed to refer to and include any documents filed after the
date of such Prospectus under the Securities Exchange Act of 1934, as amended
(the “Exchange
Act”), and incorporated by reference in such Prospectus. Any
reference to (A) any Registration Statement shall be deemed to refer to and
include the annual report of the last completed fiscal year of the Company on
Form 10-K filed under Section 13(a) or 15(d) of the Exchange Act prior to
the date hereof and (B) the effective date of such Registration Statement shall
be deemed to refer to and include the date such Registration Statement became
effective and, if later, the date such Form 10-K was so filed. Any
reference to any amendment to the Registration Statement shall be deemed to
refer to and include any annual report of the Company filed pursuant to
Section 13(a) or 15(d) of the Exchange Act after the date of this Agreement
and prior to the Termination Date that is incorporated by reference in the
Registration Statement.
(ii) As
of the Applicable Time (as defined below) and as of each Closing Date, as the
case may be, neither (A) the General Use Free Writing Prospectus(es) (as defined
below) issued at or prior to the Applicable Time, and the Pricing Prospectus (as
defined below) and the information included on Schedule B
hereto, all considered together (collectively, the “General Disclosure
Package”), (B) any individual Limited Use Free Writing Prospectus (as
defined below), nor (C) the bona fide electronic road show (as defined in Rule
433(h)(5) of the Rules and Regulations that has been made available without
restriction to any person), when considered together with the General Disclosure
Package, included or will include any untrue statement of a material fact or
omitted or will omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; provided, however, that the
Company makes no representations or warranties as to information contained in or
omitted from the Pricing Prospectus, in reliance upon, and in conformity with,
written information furnished to the Company by the Placement Agent specifically
for inclusion therein, which information the parties hereto agree is limited to
the Placement Agent’s Information (as defined in Section 17). As
used in this paragraph (ii) and elsewhere in this Agreement:
“Applicable Time”
means 3:00 p.m., California time, on the date of this Agreement or such other
time as agreed to by the Company and the Placement Agent.
“Pricing Prospectus”
means the Base Prospectus, as amended and supplemented immediately prior to the
Applicable Time, including any document incorporated by reference therein and
any prospectus supplement deemed to be a part thereof.
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“Issuer Free Writing
Prospectus” means any “issuer free writing prospectus,” as defined in
Rule 433 of the Rules and Regulations relating to the Shares 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) of the Rules
and Regulations.
“General Use Free Writing
Prospectus” means any Issuer Free Writing Prospectus that is identified
on Schedule A to
this Agreement.
“Limited Use Free Writing
Prospectuses” means any Issuer Free Writing Prospectus that is not a
General Use Free Writing Prospectus.
(iii) No
order preventing or suspending the use of any Issuer Free Writing Prospectus or
the Prospectus relating to the Offering has been issued by the Commission, and
no proceeding for that purpose or pursuant to Section 8A of the Securities
Act has been instituted or threatened by the Commission.
(iv) At
the respective times the Registration Statement and any amendments thereto
became or become effective, at the date of this Agreement and at each Closing
Date, each Registration Statement and any amendments thereto conformed and will
conform in all material respects to the requirements of the Securities Act and
the Rules and Regulations and did not and will not contain any untrue statement
of a material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein, not misleading; and the
Prospectus and any amendments or supplements thereto, at the time the Prospectus
or any amendment or supplement thereto was issued and at each Closing Date,
conformed and will conform in all material respects to the requirements of the
Securities Act and the Rules and Regulations and did not and will not contain an
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; provided, however, that the
foregoing representations and warranties in this paragraph (iv) shall not apply
to information contained in or omitted from the Registration Statement or the
Prospectus, or any amendment or supplement thereto, in reliance upon, and in
conformity with, written information furnished to the Company by or on behalf of
the Placement Agent specifically for inclusion therein, which information the
parties hereto agree is limited to the Placement Agent’s
Information. The Prospectus contains all required information under
the Securities Act with respect to the Shares and the distribution of the
Shares.
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(v) Each
Issuer Free Writing Prospectus, if any, as of its issue date and at all
subsequent times through the completion of the Offering or until any earlier
date that the Company notified or notifies the Placement Agent as described in
Section 5(a)(v),
did not, does not and will not include any information that conflicted,
conflicts or will conflict with the information contained in the Registration
Statement, Pricing Prospectus or the Prospectus, including any document
incorporated by reference therein and any prospectus supplement deemed to be a
part thereof that has not been 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 foregoing sentence does not
apply to statements in or omissions from any Issuer Free Writing Prospectus in
reliance upon, and in conformity with, written information furnished to the
Company by or on behalf of the Placement Agent specifically for inclusion
therein, which information the parties hereto agree is limited to the Placement
Agent’s Information.
(vi) The
documents incorporated by reference in the Prospectus, when they were filed with
the Commission, conformed in all material respects to the requirements of the
Exchange Act and the rules and regulations of the Commission thereunder and none
of such documents contained any untrue statement of a material fact or omitted
to state any material fact required to be stated therein or necessary to make
the statements therein not misleading; and any further documents so filed and
incorporated by reference in the Prospectus, when such documents are filed with
the Commission, will conform in all material respects to the requirements of the
Exchange Act and the rules and regulations of the Commission thereunder and will
not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading.
(vii) The
Company has not, directly or indirectly, distributed and will not distribute any
offering material in connection with the Offering other than the Prospectus and
other materials, if any, permitted under the Securities Act and consistent with
Section 5(a)(ii)
below. The Company will file with the Commission all Issuer Free
Writing Prospectuses (other than a “road show,” as described in Rule 433(d)(8)
of the Rules and Regulations) if any, in the time and manner required under
Rules 163(b)(2) and 433(d) of the Rules and Regulations.
(viii) At
the time of filing the Initial Registration Statement, any 462(b) Registration
Statement and any post-effective amendments thereto, and at the date hereof, the
Company was not, and the Company currently is not, an “ineligible issuer,” as
defined in Rule 405 of the Rules and Regulations.
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(ix) The
Company and each of its subsidiaries (as defined in Section 15) have
been duly organized and are validly existing as corporations or other legal
entities in good standing (or the foreign equivalent thereof) under the laws of
their respective jurisdictions of organization. The Company and each
of its subsidiaries are duly qualified to do business and are in good standing
as foreign corporations or other legal entities in each jurisdiction in which
their respective ownership or lease of property or the conduct of their
respective businesses requires such qualification and have all power and
authority (corporate or other) necessary to own or hold their respective
properties and to conduct the businesses in which they are engaged, except where
the failure to so qualify or have such power or authority would not (A) have,
singularly or in the aggregate, a material adverse effect on the condition
(financial or otherwise), results of operations, assets, business or prospects
of the Company and its subsidiaries taken as a whole, or (B) impair in any
material respect the ability of the Company to perform its obligations under
this Agreement or to consummate any transactions contemplated by this Agreement,
the General Disclosure Package or the Prospectus (any such effect as described
in clauses (A) or (B), a “Material Adverse
Effect”). The Company owns or controls, directly or
indirectly, only the following corporations, partnerships, limited liability
partnerships, limited liability companies, associations or other entities:
▇▇▇▇▇▇ Holdings, Inc., a Nevada corporation, and ▇▇▇▇▇▇ Technologies Company, a
Tennessee corporation.
(x) The
Company has the full right, power and authority to enter into this Agreement,
the Subscription Agreements and the Placement Agent Warrants, and to perform and
to discharge its obligations hereunder and thereunder; and each of this
Agreement, each of the Subscription Agreement(s), and this Agreement has been
duly authorized, executed and delivered by the Company, and constitutes a valid
and binding obligation of the Company enforceable in accordance with its terms
except (x) as such enforceability may be limited by bankruptcy, insolvency,
reorganization or similar laws affecting creditors’ rights generally, (y) as
enforceability of any indemnification or contribution provision may be limited
under the federal and state securities laws, and (z) that the remedy of specific
performance and injunctive and other forms of equitable relief may be subject to
equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought.
(xi) The
shares of Common Stock to be issued and sold by the Company to the Purchasers
hereunder and under the Subscription Agreements, and the Placement Agent Warrant
Shares have been duly and validly authorized and the Common Stock, when issued
and delivered against payment therefor as provided herein and in the
Subscription Agreements and the Placement Agent Warrant Shares, when issued and
delivered against payment therefore as provided in the Placement Agent Warrants,
will be duly and validly issued, fully paid and non-assessable and free of any
preemptive or similar rights and will conform to the description thereof
contained in the General Disclosure Package and the Prospectus.
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(xii) The
Company has an authorized capitalization as set forth in the Pricing Prospectus,
and all of the issued shares of capital stock of the Company have been duly and
validly authorized and issued, are fully paid and non-assessable, have been
issued in compliance with United States federal and state securities laws, and
conform to the description thereof contained in the General Disclosure Package
and the Prospectus. As of July 1, 2009, there were
19,429,533 shares of
Common Stock issued and outstanding, no shares of the Company’s preferred stock,
par value $0.01 per share, issued and outstanding, and 2,954,843 shares of Common Stock
were issuable upon the exercise of all options, warrants and convertible
securities outstanding as of such date. Since such date, the Company has not
issued any securities, other than Common Stock of the Company issued pursuant to
the exercise of stock options previously outstanding under the Company’s stock
option plans or the issuance of restricted Common Stock pursuant to employee
stock purchase plans. All of the Company’s options, warrants and
other rights to purchase or exchange any securities for shares of the Company’s
capital stock have been duly authorized and validly issued and were issued in
compliance with United States federal and state securities laws. None
of the outstanding shares of Common Stock was issued in violation of any
preemptive rights, rights of first refusal or other similar rights to subscribe
for or purchase securities of the Company. 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.
(xiii) All
the outstanding shares of capital stock of each subsidiary of the Company have
been duly authorized and validly issued, are fully paid and nonassessable and,
except to the extent set forth in the General Disclosure Package and the
Prospectus, are owned by the Company directly or indirectly through one or more
wholly-owned subsidiaries, free and clear of any claim, lien, encumbrance,
security interest, restriction upon voting or transfer or any other claim of any
third party.
(xiv) There
is no judgment, writ, decree or order, of any court to which the Company is
named as a party.
(xv) The
execution, delivery and performance of this Agreement, the Subscription
Agreements and the Placement Agent Warrants by the Company, the issue and sale
of the Shares by the Company and the consummation of the transactions
contemplated hereby and thereby will not (with or without notice or lapse of
time or both) conflict with or result in a breach or violation of any of the
terms or provisions of, constitute a default or Debt Repayment Triggering Event
(as defined below) under, give rise to any right of termination or other right
or the cancellation or acceleration of any right or obligation or loss of a
benefit under, or give rise to the creation or imposition of any lien,
encumbrance, security interest, claim or charge upon any property or assets of
the Company or any subsidiary pursuant to, any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument to which the Company or
any of its subsidiaries is a party or by which the Company or any of its
subsidiaries is bound or to which any of the property or assets of the Company
or any of its subsidiaries is subject, nor will such actions result in any
violation of the provisions of the charter or by-laws (or analogous governing
instruments, as applicable) of the Company or any of its subsidiaries or any
law, statute, rule, regulation, judgment, order or decree of any court or
governmental agency or body, domestic or foreign, having jurisdiction over the
Company or any of its subsidiaries or any of their properties or
assets. A “Debt Repayment Triggering
Event” means any event or condition that gives, or with the giving of
notice or lapse of time would give the holder of any note, debenture or other
evidence of indebtedness (or any person acting on such holder’s behalf) the
right to require the repurchase, redemption or repayment of all or a portion of
such indebtedness by the Company or any of its subsidiaries.
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(xvi) Except
for the registration of the Common Stock and Placement Agent Warrants 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 and the NASDAQ Capital Market (“NASDAQ CM”) in
connection with the offering and sale by the Company of the Shares and the
listing of the Common Stock on the NASDAQ CM, no consent, approval,
authorization or order of, or filing, qualification or registration (each an
“Authorization”) with,
any court, governmental or non-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,
Placement Agent Warrants and the Subscription Agreements by the Company, the
offer or sale of the Shares or the consummation of the transactions contemplated
hereby or thereby; and no event has occurred that allows or results in, or after
notice or lapse of time or both would allow or result in, revocation,
suspension, termination or invalidation of any such Authorization or any other
impairment of the rights of the holder or maker of any such
Authorization. All corporate approvals (including those of
stockholders) necessary for the Company to consummate the transactions
contemplated by this Agreement have been obtained and are in
effect.
(xvii) BDO
▇▇▇▇▇▇▇ LLP, who have certified certain financial statements and related
schedules included or incorporated by reference in the Registration Statement,
the General Disclosure Package and the Prospectus, is an independent registered
public accounting firm within the meaning of Article 2-01 of Regulation S-X
and the Public Company Accounting Oversight Board (United States) (the “PCAOB”). Except as disclosed in
the Registration Statement and as pre-approved in accordance with the
requirements set forth in Section 10A of the Exchange Act, BDO ▇▇▇▇▇▇▇ LLP
has not been engaged by the Company to perform any “prohibited activities” (as
defined in Section 10A of the Exchange Act).
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(xviii) The
financial statements, together with the related notes and schedules, included or
incorporated by reference in the General Disclosure Package, the Prospectus and
in each Registration Statement, fairly present the financial position and the
results of operations and changes in financial position of the Company and its
consolidated subsidiaries and other consolidated entities at the respective
dates or for the respective periods therein specified. Such
statements and related notes and schedules have been prepared in accordance with
the generally accepted accounting principles in the United States (“GAAP”) applied on a
consistent basis throughout the periods involved except as may be set forth in
the related notes included or incorporated by reference in the General
Disclosure Package. 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 Regulation S-X. No other financial statements or supporting
schedules or exhibits are required by Regulation S-X to be described, or
included or incorporated by reference in the Registration Statement, the General
Disclosure Package or the Prospectus. There is no pro forma or as
adjusted financial information which is required to be included in the
Registration Statement, the General Disclosure Package, and/or the Prospectus or
a document incorporated by reference therein in accordance with Regulation S-X
which has not been included or incorporated as so required. All
information contained in the Registration Statement, the General Disclosure
Package and the Prospectus regarding “non-GAAP financial
measures” (as defined in Regulation G) complies with Regulation G and
Item 10 of Regulation S-K, to the extent applicable.
(xix) 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 than as set forth or contemplated in the General Disclosure
Package; and, since the respective dates as of which information is given in the
General Disclosure Package, there has not been any change in the capital stock
or long-term debt of the Company or any of its subsidiaries, or any material
adverse change, or any development that could reasonably be expected to have a
material adverse change, in or affect on the business, assets, general affairs,
management, financial position, stockholders’ equity or results of operations of
the Company and its subsidiaries taken as a whole, otherwise than as set forth
or contemplated in the General Disclosure Package.
(xx) There
is no legal or governmental action, suit, claim or proceeding pending to which
the Company or any of its subsidiaries is a party or of which any property or
assets of the Company or any of its subsidiaries is the subject, which is
required to be described in the Registration Statement, the General Disclosure
Package or the Prospectus or a document incorporated by reference therein and is
not described therein, or which, singularly or in the aggregate, if determined
adversely to the Company or any of its subsidiaries, could reasonably be
expected to have a Material Adverse Effect or prevent the consummation of the
transactions contemplated hereby; and to the Company’s knowledge, no such
proceedings are threatened or contemplated by governmental authorities or
threatened by others.
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(xxi) Except
as described in the General Disclosure Package, neither the Company nor any of
its subsidiaries (A) is in violation of its charter or by-laws (or analogous
governing instrument, as applicable), (B) is 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 term, covenant or
condition contained in any indenture, mortgage, deed of trust, loan agreement,
lease or other agreement 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 (C) is in
violation in any respect of any law, ordinance, governmental rule, regulation or
court order, decree or judgment to which it or its property or assets may be
subject except, in the case of clauses (B) and (C) of this paragraph (xx), for
any violations or defaults which, singularly or in the aggregate, would not have
a Material Adverse Effect.
(xxii) The
Company and each of its subsidiaries possess all licenses, certificates,
authorizations and permits issued by, and have made all declarations and filings
with, the appropriate local, state, federal or foreign regulatory agencies or
bodies which are necessary or desirable for the ownership of their respective
properties or the conduct of their respective businesses as described in the
General Disclosure Package and the Prospectus (collectively, the “Governmental
Permits”) except where any failures to possess or make the same,
singularly or in the aggregate, would not have a Material Adverse
Effect. The Company and its subsidiaries are in compliance with all
such Governmental Permits, except where non-compliance, singularly or in the
aggregate, would not have a Material Adverse Effect; all such Governmental
Permits are valid and in full force and effect, except where the validity or
failure to be in full force and effect would not, singularly or in the
aggregate, have a Material Adverse Effect. All such Governmental
Permits are free and clear of any restriction or condition that are in addition
to, or materially different from those normally applicable to similar licenses,
certificates, authorizations and permits. Neither the Company nor any
subsidiary has received notification of any revocation, modification,
suspension, termination or invalidation (or proceedings related thereto) of any
such Governmental Permit and to the knowledge of the Company, no event has
occurred that allows or results in, or after notice or lapse of time or both
would allow or result in, revocation, modification, suspension, termination or
invalidation (or proceedings related thereto) of any such Governmental Permit
and the Company has no reason to believe that any such Governmental Permit will
not be renewed.
(xxiii) Neither
the Company nor any of its subsidiaries is or, after giving effect to the
offering of the Shares and the application of the proceeds thereof as described
in the General Disclosure Package and the Prospectus, will become an “investment
company” within the meaning of the Investment Company Act of 1940, as amended,
and the rules and regulations of the Commission thereunder.
-11-
(xxiv) Neither
the Company nor any of its subsidiaries, or any of their respective officers,
directors or affiliates has taken or will take, directly or indirectly, any
action designed or intended to stabilize or manipulate the price of any security
of the Company, or which caused or resulted in, or which might in the future
reasonably be expected to cause or result in, stabilization or manipulation of
the price of any security of the Company.
(xxv) The
Company and its subsidiaries own or possess legally enforceable rights from all
necessary third parties (the “Licensors”) in all
patents and own or possess legally enforceable rights from all necessary third
parties to use the trademarks, trademark registrations, service marks, service
▇▇▇▇ registrations, trade names, copyrights, trade secrets and know-how set
forth on the attached Schedule D and
the Company is not aware of any claim to the contrary or any challenge by any
other person to the rights of the Company or its subsidiaries with respect to
the foregoing. The Company is unaware of any claims or challenges by
any third party that the products or services of the Company infringe any
legally enforceable patent held by such third party. Except where
such failure to make the same would not, singularly or in the aggregate, have a
Material Adverse Effect, the Company or its subsidiaries is listed in the
records of the appropriate United States, state, or foreign registry as the sole
current owner of record for each intellectual property registration and
application for registration owned by the Company or its subsidiaries,
respectively, except for such intellectual property applications as have been
filed in the name of employees who are contractually obligated to assign all of
their rights in and to such intellectual property applications to the Company,
and all such applications and registrations have been duly maintained, are
subsisting, in full force and effect, have not been cancelled, expired, or
abandoned. Neither the Company nor its subsidiaries has received
written notification of any revocation or modification of any registered
intellectual property right, or has any reason to believe that any renewable
registered intellectual property right will not be renewed, other than any
revocation, modification or failure to renew that would not, singularly or in
the aggregate, have a Material Adverse Effect. The business of the
Company and its subsidiaries as now conducted, and as proposed to be conducted
as described in the General Disclosure Package and the Prospectus, to the
knowledge of the Company, does not and will not infringe any patents,
trademarks, service marks, trade names, copyrights, trade secrets, licenses,
know-how or other intellectual property right of any person, except where such
infringement would not, singly or in the aggregate, have a Material Adverse
Effect. There are no oppositions, cancellations, invalidity proceedings,
re-examination proceedings, suits, arbitrations, or claims pending or for which
notice has been provided or, to the knowledge of Company, threatened,
challenging the Company’s or its subsidiaries’ ownership of, right to use, or
the validity or enforceability of any patent, trademark, service ▇▇▇▇, trade
name, copyright, trade secret, license, know-how or other intellectual property
right of any person which would, singularly or in the aggregate, have a Material
Adverse Effect.
-12-
(xxvi) Patent
applications for all inventions owned by the Company or its subsidiaries as set
forth on the attached Schedule D, or
licensed to the Company or its subsidiaries, other than licenses acquired in
connection with the purchase and/or use of “off the shelf” software or similar
type products, have been duly and properly filed or caused to be filed with the
United States Patent and Trademark Office (“PTO”) and, in some
cases, applicable foreign and international patent
authorities. Assignments for all patents and patent applications,
including, without limitation any continuations, divisionals,
continuations-in-part, renewals, reissues and applications for registration of
any of the foregoing (collectively, the “Patents”) owned by or
licensed to the Company or its subsidiaries that are material to the conduct of
the business of the Company or its subsidiaries, other than patents relating to
“off the shelf” software or similar type products purchased or used by the
Company or its subsidiaries, in the manner in which it has been or is
contemplated to be conducted, have been executed and recorded for each named
inventor. With respect to all Patents which are material to the
conduct of the business of the Company or its subsidiaries in the manner in
which it has been or is contemplated to be conducted: (a) to the knowledge of
the Company, all printed publications and patent references material to the
patentability of the inventions claimed in the Patents have been disclosed to
those patent offices so requiring; (b) to the knowledge of the Company, each of
the Company, its subsidiaries and their respective assignors or the Licensors,
as applicable, has met its duty of candor and good faith to the PTO for the
Patents; (c) to the knowledge of the Company, no material misrepresentation has
been made to any patent office in connection with the Patents; (d) the Company
is not aware of any facts material to a determination of patentability regarding
the Patents not disclosed to the PTO or other applicable patent office; (e) the
Company is not aware of any facts not disclosed to the PTO or other applicable
patent office that would preclude the patentability, validity or enforceability
of any patent or patent application in the Patents; and (f) the Company has no
knowledge of any facts that would preclude the Company, its subsidiaries or the
Licensors, as applicable, from having clear title to the patents and patent
applications in the Patents.
(xxvii) To
the knowledge of the Company, no third party is engaging in any activity that
infringes, misappropriates or otherwise violates any patent, trademark, service
▇▇▇▇, trade name, copyright, trade secret, license, know-how or any other
intellectual property right or franchise right owned by or licensed to the
Company or its subsidiaries, except as described in the General Disclosure
Package and the Prospectus and except for such activities that, singularly or in
the aggregate, would not have a Material Adverse Effect.
-13-
(xxviii) With
respect to each material agreement governing all rights in and to any patent,
trademark, service ▇▇▇▇, trade name, copyright, trade secret, license, know-how
or any other intellectual property right or franchise right licensed by or
licensed to the Company or its subsidiaries: (A) neither the Company nor its
subsidiaries has received any notice of indemnification, termination or
cancellation under such agreement, received any notice of breach or default
under such agreement, which breach has not been cured, or granted to any third
party any rights, adverse or otherwise, under such agreement that would
constitute a material breach of such agreement; and (B) none of the Company, its
subsidiaries nor, to the knowledge of the Company, any other party to such
agreement, is in breach or default thereof in any material respect, and no event
has occurred that, with notice or lapse of time, would constitute such a
material breach or default or permit termination, modification or acceleration
under such agreement.
(xxix) Except
as described in the General Disclosure Package, the Company and each of its
subsidiaries have good and marketable title in fee simple to, or have valid
rights to lease or otherwise use, all items of real or personal property which
are material to the business of the Company and its subsidiaries taken as a
whole, in each case free and clear of all liens, encumbrances, security
interests, claims and defects that do not, singularly or in the aggregate,
materially affect the value of such property and do not interfere with the use
made and proposed to be made of such property by the Company or any of its
subsidiaries; and all of the leases and subleases material to the business of
the Company and its subsidiaries, considered as one enterprise, and under which
the Company or any of its subsidiaries holds properties described in the General
Disclosure Package and the Prospectus, are in full force and effect, and neither
the Company nor any subsidiary has received any notice of any material claim of
any sort that has been asserted by anyone adverse to the rights of the Company
or any subsidiary under any of the leases or subleases mentioned above, or
affecting or questioning the rights of the Company or such subsidiary to the
continued possession of the leased or subleased premises under any such lease or
sublease.
(xxx) There
is no significant unfair labor practice complaint pending against the Company,
or any of its subsidiaries, nor, to the knowledge of the Company, threatened
against it or any of its subsidiaries, before the National Labor Relations
Board, any state or local labor relation board or any foreign labor relations
board, and no significant grievance or significant arbitration proceeding
arising out of or under any collective bargaining agreement is so pending
against the Company or any of its subsidiaries, or, to the knowledge of the
Company, threatened against it and no labor disturbance by the employees of the
Company or any of its subsidiaries exists or, to the Company’s knowledge, is
imminent, and the Company is not aware of any existing or imminent labor
disturbance by the employees of any of its or its subsidiaries principal
suppliers, manufacturers, customers or contractors, that could reasonably be
expected, singularly or in the aggregate, to have a Material Adverse
Effect. The Company is not aware that any key employee or significant
group of employees of the Company or any subsidiary plans to terminate
employment with the Company or any such subsidiary.
-14-
(xxxi) No
“prohibited transaction” (as defined in Section 406 of the Employee
Retirement Income Security Act of 1974, as amended, including the regulations
and published interpretations thereunder (“ERISA”), or
Section 4975 of the Internal Revenue Code of 1986, as amended from time to
time (the “Code”)) or
“accumulated funding deficiency” (as defined in Section 302 of ERISA) or
any of the events set forth in Section 4043(b) of ERISA (other than events
with respect to which the thirty (30)-day notice requirement under
Section 4043 of ERISA has been waived) has occurred or could reasonably be
expected to occur with respect to any employee benefit plan of the Company or
any of its subsidiaries which could, singularly or in the aggregate, have a
Material Adverse Effect. Each employee benefit plan of the Company or
any of its subsidiaries is in compliance in all material respects with
applicable law, including ERISA and the Code. The Company and its
subsidiaries have not incurred and could not reasonably be expected to incur
liability under Title IV of ERISA with respect to the termination of, or
withdrawal from, any pension plan (as defined in ERISA). Each pension
plan for which the Company or any of its subsidiaries would have any liability
that is intended to be qualified under Section 401(a) of the Code is so
qualified in all material respects, and nothing has occurred, whether by action
or by failure to act, which could, singularly or in the aggregate, cause the
loss of such qualification.
(xxxii) The
Company and its subsidiaries are in compliance with all foreign, federal, state
and local rules, laws and regulations relating to the use, treatment, storage
and disposal of hazardous or toxic substances or waste and protection of health
and safety or the environment which are applicable to their businesses (“Environmental
Laws”). Except as set forth in Schedule D,
there has been no storage, generation, transportation, handling, treatment,
disposal, discharge, emission, or other release of any kind of toxic or other
wastes or other hazardous substances by, due to, or caused by the Company or any
of its subsidiaries (or, to the Company’s knowledge, any other entity for whose
acts or omissions the Company or any of its subsidiaries is or may otherwise be
liable) upon any of the property now or previously owned or leased by the
Company or any of its subsidiaries, or upon any other property, in violation of
any law, statute, ordinance, rule, regulation, order, judgment, decree or permit
or which would, under any law, statute, ordinance, rule (including rule of
common law), regulation, order, judgment, decree or permit, give rise to any
liability; and there has been no disposal, discharge, emission or other release
of any kind onto such property or into the environment surrounding such property
of any toxic or other wastes or other hazardous substances with respect to which
the Company or any of its subsidiaries has knowledge. In the ordinary
course of business, the Company and its subsidiaries conduct periodic reviews of
the effect of Environmental Laws on their business and assets, in the course of
which they identify and evaluate associated costs and liabilities (including,
without limitation, any capital or operating expenditures required for clean-up,
closure of properties or compliance with Environmental Laws or Governmental
Permits issued thereunder, any related constraints on operating activities and
any potential liabilities to third parties). On the basis of such
reviews, the Company has reasonably concluded that such associated costs and
liabilities would not have, singularly or in the aggregate, a Material Adverse
Effect.
-15-
(xxxiii) The
Company and its subsidiaries each (A) have timely filed all necessary federal,
state, local and foreign tax returns, or timely filed extensions for filing such
returns, and all such returns were true, complete and correct in all material
respects, and all taxes shown by such returns or otherwise assessed, which are
due and payable, have been paid except assessments against which appeals have
been or will be promptly taken and as to which adequate reserves have been
provided and (B) do not have any tax deficiency or claims outstanding or
assessed or, to its knowledge, proposed against any of them, except those, in
each of the cases described in clauses (A) and (B) of this paragraph (xxxii),
that would not, singularly or in the aggregate, have a Material Adverse
Effect. The Company and its subsidiaries have not engaged in any
transaction which is a corporate tax shelter or which could be characterized as
such by the Internal Revenue Service or any other taxing
authority. The accruals and reserves on the books and records of the
Company and its subsidiaries in respect of tax liabilities for any taxable
period not yet finally determined are adequate to meet any assessments and
related liabilities for any such period, and since December 31, 2008, neither
the Company nor any of its subsidiaries has incurred any liability for taxes
other than in the ordinary course.
(xxxiv) The
Company and each of its subsidiaries carry, or are covered by, insurance with
policies in such amounts and covering such risks generally deemed by the Company
to be adequate for the conduct of their respective businesses and the value of
their respective properties. Neither the Company nor any of its
subsidiaries has any reason to believe that it will not be able (A) to renew its
existing insurance coverage as and when such policies expire or (B) to obtain
comparable coverage from similar institutions as may be necessary or appropriate
to conduct its business as now conducted and at a cost that would not result in
a Material Adverse Effect. Neither the Company nor any of its
subsidiaries have, within the past five (5) years, been denied any insurance
coverage that they have sought or for which they have
applied. Neither the Company nor any of its subsidiaries has received
written notice from any insurer, agent of such insurer or the broker of the
Company or any of its subsidiaries that any material capital improvements or any
other material expenditures (other than premium payments) are required or
necessary to be made in order to continue such insurance.
-16-
(xxxv) The
Company and each of its subsidiaries maintains a system of internal control over
financial reporting (as such term is defined in Rule 13a-15 of the General Rules
and Regulations under the Exchange Act (the “Exchange Act Rules”))
that complies with the requirements of the Exchange Act and has been designed by
the Company’s principal executive officer and principal financial officer, or
under their supervision, to provide reasonable assurances that
(A) transactions are executed in accordance with management’s general or
specific authorizations; (B) transactions are recorded as necessary to permit
preparation of financial statements in conformity with GAAP and to maintain
accountability for assets; (C) access to assets is permitted only in accordance
with management’s general or specific authorization; and (D) the recorded
accountability for assets is compared with existing assets at reasonable
intervals and appropriate action is taken with respect to any
differences. The Company’s internal control over financial reporting
is materially effective. Except as described in the General
Disclosure Package, since the end of the Company’s most recent audited fiscal
year, there has been (1) no material weakness in the Company’s internal control
over financial reporting (whether or not remediated) and (2) no change in the
Company’s internal control over financial reporting that has materially
affected, or is reasonably likely to materially affect, the Company’s internal
control over financial reporting. The Company’s internal control over
financial reporting is overseen by the Audit Committee of the Board of Directors
of the Company (the “Audit Committee”) in
accordance with the Exchange Act Rules. The Company has not publicly
disclosed or reported to the Audit Committee or to the Board, and within the
next 90 days the Company does not reasonably expect to publicly disclose or
report to the Audit Committee or the Board, a significant deficiency, material
weakness, change in internal control over financial reporting or fraud involving
management or other employees who have a significant role in the internal
control over financial reporting (each an “Internal Control
Event”), any violation of, or failure to comply with, the U.S. Securities
Laws, or any matter which, if determined adversely, would have a Material
Adverse Effect.
(xxxvi) A
member of the Audit Committee has confirmed to the Chief Executive Officer or
Chief Financial Officer of the Company that, except as set forth in the General
Disclosure Package, the Audit Committee is not reviewing or investigating, and
neither the Company’s independent auditors nor its internal auditors have
recommended that the Audit Committee review or investigate, (A) adding to,
deleting, changing the application of or changing the Company’s disclosure with
respect to, any of the Company’s material accounting policies, (B) any matter
which could result in a restatement of the Company’s financial statements for
any annual or interim period during the current or prior three fiscal years, or
(C) any Internal Control Event.
(xxxvii) The
minute books of the Company and each of its subsidiaries that would be a
“significant subsidiary” within the meaning of Rule 1-02(w) of Regulation S-X
(such a significant subsidiary of the Company, a “Significant
Subsidiary”) have been made available to the Placement Agent and counsel
for the Placement Agent, and such books (A) contain a complete summary of all
meetings and actions of the board of directors (including each board committee)
and shareholders of the Company (or analogous governing bodies and interest
holders, as applicable), and each of its Significant Subsidiaries since the time
of their respective incorporation or organization through the date of the latest
meeting and action, and (B) accurately in all material respects reflect all
transactions referred to in such minutes.
-17-
(xxxviii) There
is no material agreement, lease, contract, or other agreement or document
required by the Securities Act or by the Rules and Regulations to be described
in the General Disclosure Package and in the Prospectus or a document
incorporated by reference therein or to be filed as an exhibit to the
Registration Statement or a document incorporated by reference therein which is
not so described or filed therein as required; and all descriptions of any such
agreement, lease, contract, or other agreement or document contained in the
General Disclosure Package and in the Prospectus or in a document incorporated
by reference therein are accurate and complete descriptions of such documents in
all material respects. Other than as described in the General
Disclosure Package, no such agreement, lease, contract or other agreement has
been suspended or terminated for convenience or default by the Company or any of
the other parties thereto, and neither the Company nor any of its subsidiaries
has received notice nor does the Company have knowledge of any such pending or
threatened suspension or termination.
(xxxix) No
relationship, direct or indirect, exists between or among the Company on the one
hand, and the directors, officers, stockholders (or analogous interest holders),
customers or suppliers of the Company or any of its affiliates on the other
hand, which is required to be described in the General Disclosure Package and
the Prospectus or a document incorporated by reference therein and which is not
so described.
(xl) No
person or entity has the right to exercise any preemptive rights to purchase the
Company’s securities, or to require registration of shares of Common Stock or
other securities of the Company or any of its subsidiaries because of the filing
or effectiveness of the Registration Statement or otherwise, except for persons
and entities who have expressly waived such rights in writing or who have been
given timely and proper written notice and have failed to exercise such rights
within the time or times required under the terms and conditions of such
right. Except as described in the General Disclosure Package, there
are no persons with preemptive rights or other rights to subscribe for
securities of the Company, or registration rights or similar rights to have any
securities registered by the Company or any of its subsidiaries under the
Securities Act.
(xli) Neither
the Company nor any of its subsidiaries owns any “margin securities” as that
term is defined in Regulation U of the Board of Governors of the Federal Reserve
System (the “Federal
Reserve Board”), and none of the proceeds of the sale of the Shares will
be used, directly or indirectly, for the purpose of purchasing or carrying any
margin security, for the purpose of reducing or retiring any indebtedness which
was originally incurred to purchase or carry any margin security or for any
other purpose which might cause any of the Shares to be considered a “purpose
credit” within the meanings of Regulations T, U or X of the Federal Reserve
Board.
(xlii) Except
as set forth in Schedule D, and
other than any contracts or agreements between the Company and the Placement
Agent, neither the Company nor any of its subsidiaries is a party to any
contract, agreement or understanding with any person that would give rise to a
valid claim against the Company or the Placement Agent for a brokerage
commission, finder’s fee or like payment in connection with the offering and
sale of the Shares or any transaction contemplated by this Agreement, the
Subscription Agreements, the Registration Statement, the General Disclosure
Package or the Prospectus.
-18-
(xliii) Except
as described in the General Disclosure Package and as set forth in Schedule D, and
the Prospectus, no subsidiary of the Company is currently prohibited, directly
or indirectly, under any agreement or other instrument to which it is a party or
is subject, from paying any dividends to the Company, from making any other
distribution on such subsidiary’s capital stock, from repaying to the Company
any loans or advances to such subsidiary from the Company or from transferring
any of such subsidiary’s properties or assets to the Company or any other
subsidiary of the Company.
(xliv) Since
the date as of which information is given in the General Disclosure Package and
the Prospectus through the date hereof, and except as set forth in the General
Disclosure Package and as set forth in Schedule D,
neither the Company nor any of its subsidiaries has (A) issued or granted any
securities other than options to purchase Common Stock pursuant to the Company’s
stock option plan or shares of Common Stock issued or issuable upon exercise
thereof, (B) incurred any material liability or obligation, direct or
contingent, other than liabilities and obligations which were incurred in the
ordinary course of business, (C) entered into any material transaction other
than in the ordinary course of business or (D) declared or paid any
dividend on its capital stock.
(xlv) No
forward-looking statement (within the meaning of Section 27A of the
Securities Act and Section 21E of the Exchange Act) contained in either 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.
(xlvi) The
Company is in material compliance with all applicable provisions of (A) the
▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002 and all rules and regulations promulgated thereunder
or implementing the provisions thereof (the “▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act”)
that are then in effect and (B) all applicable corporate governance requirements
set forth in the NASDAQ Marketplace Rules
that are then in effect; and the Company is actively taking steps to ensure that
it will be in compliance with other applicable provisions of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇
Act and NASDAQ Marketplace Rules not currently in effect upon and at all times
after the effectiveness of such provisions.
(xlvii) There
are no transactions, arrangements or other relationships between and/or among
the Company, any of its affiliates (as such term is defined in Rule 405 of the
Rules and Regulations) and any unconsolidated entity, including, but not limited
to, any structured finance, special purpose or limited purpose entity that could
reasonably be expected to materially affect the Company’s or any of its
subsidiaries’ liquidity or the availability of or requirements for their capital
resources required to be described in the General Disclosure Package and the
Prospectus or a document incorporated by reference therein which have not been
described as required.
-19-
(xlviii) The
statistical and market related data included in the Registration Statement, the
General Disclosure Package and the Prospectus are based on or derived from
sources that the Company believes to be reliable and accurate, and such data
agree with the sources from which they are derived.
(xlix) Neither
the Company nor any subsidiary nor any of their affiliates (within the meaning
of the Financial Industry Regulatory Authority, Inc. (“FINRA”)) Conduct Rule
2720(b)(1)(a)) directly or indirectly controls, is controlled by, or is under
common control with, or is an associated person (within the meaning of
Article I, Section 1(ee) of the Bylaws of FINRA) of, any member firm
of FINRA.
(l) No
approval of the shareholders of the Company under the rules and regulations of
NASDAQ, and no approval of the shareholders of the Company thereunder is
required for the Company to issue and deliver to the Purchasers the Shares,
including such as may be required pursuant to Rule 5635 of the NASDAQ
Marketplace Rules.
Any
certificate signed by or on behalf of the Company and delivered to the Placement
Agent or to counsel for the Placement Agent shall be deemed to be a
representation and warranty by the Company to the Placement Agent and the
Purchasers as to the matters covered thereby.
4. Closing. The
time and date of the completion of the purchase and sale of a portion of the
Shares to the Purchasers thereof pursuant to the terms hereof shall be at 7:00
a.m., California time (the “Closing Time”) on
various dates established by the Placement Agent and the Company (each, a “Closing Date”) at the
offices of ▇▇▇▇▇ & ▇▇▇▇▇▇, LLP, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇; provided, however, that each
such Closing Date shall occur on or prior to the earlier of the following dates
(the “Termination
Date”) (i) August 21, 2009 and (ii) the date that the Placement Agent
notifies the Company of the completion of the offering of all of the
Shares.
-20-
5. Further
Agreements of the Company.
(a) The
Company agrees with the Placement Agent and the Purchasers:
(i) To
prepare the Rule 462(b) Registration Statement, if necessary, in a form approved
by the Placement Agent and file such Rule 462(b) Registration Statement with the
Commission by 7:00 PM, California time, on the date hereof, and the Company
shall at the time of filing either pay to the Commission the filing fee for the
Rule 462(b) Registration Statement or give irrevocable instructions for the
payment of such fee pursuant to Rule 111(b) under the Rules and Regulations; to
prepare the Prospectus in a form approved by the Placement Agent containing
information previously omitted at the time of effectiveness of the Registration
Statement in reliance on Rules 430A, 430B or 430C of the Rules and Regulations
and to file such Prospectus pursuant to Rule 424(b) of the Rules and Regulations
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 of the Rules and
Regulations; to notify the Placement Agent 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 Placement Agent shall reasonably object by notice to the Company after
a reasonable period to review; to advise the Placement Agent, 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 Agent with copies thereof; to file promptly all
material required to be filed by the Company with the Commission pursuant to
Rules 433(d) or 163(b)(2) of the Rules and Regulations, 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 Sections
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) of the Rules and Regulations) is required
in connection with the offering or sale of the Shares; to advise the Placement
Agent, 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 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 Issuer Free Writing Prospectus or the
Prospectus or suspending any such qualification, and promptly to use its best
efforts to obtain the withdrawal of such order.
(ii) The
Company represents and agrees that, unless it obtains the prior consent of the
Placement Agent, it has not made and will not make any offer relating to the
Shares that would constitute a “free writing prospectus” as defined in Rule 405
of the Rules and Regulations (each, a “Permitted Free Writing
Prospectus”); provided that the prior written consent of the Placement
Agent hereto shall be deemed to have been given in respect of the General Use
Free Writing Prospectus(es), if any. 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 of the Rules and Regulations 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 Agent or the Company being required to file with the
Commission pursuant to Rule 433(d) of the Rules and Regulations 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.
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(iii) 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 any material fact necessary to
make the statements therein, in light of the circumstances under which they were
made when the Prospectus is delivered (or in lieu thereof, the notice referred
to in Rule 173(a) of the Rules and Regulations), not misleading, or if it is
necessary at any time to amend or supplement any Registration Statement or the
Prospectus or to file under the Exchange Act any document incorporated by
reference in the Prospectus to comply with the Securities Act or the Exchange
Act, that the Company will promptly notify the Placement Agent thereof and upon
their request will prepare an appropriate amendment or supplement to the
Prospectus that corrects such statement or omission or effect such compliance
and will furnish without charge to the Placement Agent and to any dealer in
securities as many copies as the Placement Agent may from time to time
reasonably request of such amendment or supplement.
(iv) 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 Placement Agent, 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 (A) prepare, file with the Commission (if required) and furnish to the
Placement Agent and any dealers an appropriate amendment or supplement to the
General Disclosure Package or (B) 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.
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(v) 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 Placement Agent 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 eliminate or correct such conflict, untrue statement
or omission. The foregoing sentence does not apply to statements in
or omissions from any Issuer Free Writing Prospectus in reliance upon, and in
conformity with, written information furnished to the Company by the Placement
Agent specifically for inclusion therein, which information the parties hereto
agree is limited to the Placement Agent’s Information (as defined in Section 17).
(vi) Upon
request, to furnish promptly to the Placement Agent and to counsel for the
Placement Agent a signed copy of the Registration Statement as originally filed
with the Commission, and of each amendment thereto filed with the Commission,
including all consents and exhibits filed therewith.
(vii)
To deliver promptly to the Placement Agent in Newport Beach,
California such number of the following documents as the Placement Agent shall
reasonably request: (A) conformed copies of the Registration
Statement as originally filed with the Commission (in each case excluding
exhibits), (B) any Issuer Free Writing Prospectus, (C) the Prospectus (the
delivery of the documents referred to in clauses (A), (B) and (C) of this
paragraph (vii) to be made not later than 7:00 a.m., California time, on the
business day following the execution and delivery of this Agreement), (D)
conformed copies of any amendment to the Registration Statement (excluding
exhibits), (E) any amendment or supplement to the General Disclosure Package or
the Prospectus (the delivery of the documents referred to in clauses (D) and (E)
of this paragraph (vii) to be made not later than 7:00 a.m., California time, on
the business day following the date of such amendment or supplement) and (F) 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 (E) of this paragraph (vii) to be made not later than 7:00 a.m.,
California time, on the business day following the date of such
document).
(viii)
To make generally available to its shareholders as soon
as practicable, but in any event not later than sixteen (16) months after the
effective date of each Registration Statement (as defined in Rule 158(c) of the
Rules and Regulations), an earnings statement of the Company and its
subsidiaries (which need not be audited) complying with Section 11(a) of
the Securities Act and the Rules and Regulations (including, at the option of
the Company, Rule 158).
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(ix) To
take promptly from time to time such actions as the Placement Agent may
reasonably request to qualify the Shares for offering and sale under the
securities or Blue Sky laws of such jurisdictions (domestic or foreign) as the
Placement Agent may designate and to continue such qualifications in effect, and
to comply with such laws, for so long as required to permit the offer and sale
of Shares in such jurisdictions; provided that the Company and its subsidiaries
shall not be obligated to qualify as foreign corporations or as a dealer in
securities in any jurisdiction in which they are not so qualified or to file a
general consent to service of process in any jurisdiction.
(x)
Upon request, during the period of five (5) years from the date
hereof, to deliver to the Placement Agent, (A) as soon as they are available,
copies of all reports or other communications furnished to shareholders, and
(B) as soon as they are available, copies of any reports and financial
statements furnished or filed with the Commission or any national securities
exchange or automatic quotation system on which the Shares are
listed. 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 (“▇▇▇▇▇”), it is not
required to furnish such reports or statements to the Placement
Agent.
(xi) That
the Company will not, for a period of ninety (90) days from the date of this
Agreement (the “Lock-Up Period”),
without the prior written consent of ▇▇▇▇ Capital, 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 and
director listed in Schedule C to furnish
to the Placement Agent, prior to the date of this Agreement, a letter,
substantially in the form of Exhibit C 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, or announce the intention to 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, hedge or similar
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
▇▇▇▇ Capital. The Company also agrees that during such period, other
than for the sale of the Shares hereunder, 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.
-24-
(xii) To
supply the Placement Agent and counsel for the Placement Agent with copies of
all future 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 any of the Registration Statement, the Prospectus, or any
amendment or supplement thereto or document incorporated by reference
therein.
(xiii) Prior
to the Termination Date, to furnish to the Placement Agent, as soon as they have
been prepared, copies of any unaudited interim consolidated financial statements
of the Company for any periods subsequent to the periods covered by the
financial statements appearing in the Registration Statement and the
Prospectus.
(xiv)
Prior to the Termination Date, not to 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 Placement Agent is notified), without the prior written
consent of the Placement Agent, unless in the judgment of the Company and its
counsel, and after notification to the Placement Agent, such press release or
communication is required by law.
(xv) Until
the Placement Agent shall have notified the Company of the completion of the
offering of the Shares, that the Company will not, and will cause its affiliated
purchasers (as defined in Regulation M under the Exchange Act) not to, either
alone or with one or more other persons, bid for or purchase, for any account in
which it or any of its affiliated purchasers has a beneficial interest, any
Shares, or attempt to induce any person to purchase any Shares; and not to, and
to cause its affiliated purchasers not to, make bids or purchase for the purpose
of creating actual, or apparent, active trading in or of raising the price of
the Shares.
(xvi) Not
to take any action prior to the Termination Date which would require the
Prospectus to be amended or supplemented.
(xvii) To
at all times comply with all applicable provisions of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act in
effect from time to time.
(xviii) To
maintain, at its expense, a registrar and transfer agent for the Common
Stock.
(xix) To
apply the net proceeds from the sale of the Shares as set forth in the
Registration Statement, the General Disclosure Package and the Prospectus under
the heading “Use of Proceeds.” The Company shall manage its affairs
and investments in such a manner as not to be or become an “investment company”
within the meaning of the Investment Company Act and the rules and regulations
thereunder.
-25-
(xx) To
use its reasonable best efforts to list, subject to notice of issuance, and to
maintain the listing of the Common Stock on the NASDAQ CM.
(xxi) To
use its reasonable best efforts to assist the Placement Agent with any filings
with FINRA and obtaining clearance from FINRA as to the amount of compensation
allowable or payable to the Placement Agent.
(xxii) To
use its reasonable best efforts to do and perform all things required to be done
or performed under this Agreement by the Company prior to the Termination Date
and to satisfy all conditions precedent to the delivery of the
Shares.
6. Payment
of Expenses. The Company agrees to pay, or reimburse if paid
by the Placement Agent, whether or not the transactions contemplated hereby are
consummated or this Agreement is terminated, up to a maximum of 1% of the gross
proceeds from the sale of the Shares: (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 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 this Agreement, the Subscription Agreements and any
closing document by mail, telex or other means of communications; (d) the fees
and expenses (including related fees and expenses of counsel for the Placement
Agent) incurred in connection with securing any required review by FINRA of the
terms of the sale of the Shares and any filings made with FINRA; (e) any
applicable listing, quotation or other fees; (f) the fees and expenses
(including related fees and expenses of counsel to the Placement Agent) of
qualifying the Shares under the securities laws of the several jurisdictions as
provided in Section 5(a)(ix)
and of preparing, printing and distributing wrappers, Blue Sky Memoranda and
Legal Investment Surveys; (g) the cost of preparing and printing stock
certificates; (h) all fees and expenses of the registrar and transfer agent of
the Shares; (i) the fees, disbursements and expenses of counsel to the Placement
Agent; (j) the costs and expenses of the Company relating to investor
presentations on any “road show” undertaken in connection with the marketing of
the offering of the Shares, including, without limitation, expenses associated
with the preparation or dissemination of any electronic road show, expenses
associated with the production of road show slides and graphics, fees and
expenses of any consultants engaged in connection with the road show
presentations with the prior approval of the Company, travel and lodging
expenses of the officers of the Company and, with the prior approval of the
Company, of such consultants and (k) 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). An advance against out-of-pocket accountable expenses
anticipated to be incurred by the Placement Agent in the amount of $25,000 has
been paid by the Company to the Placement Agent, a portion of which advance
shall be reimbursed to the Company to the extent such expenses are not actually
incurred by the Placement Agent. Notwithstanding anything herein to
the contrary, the Company shall reimburse ▇▇▇▇ upon request for any accountable
out-of pocket expenses customarily borne by an issuer.
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7. Conditions
to the Obligations of the Placement Agent and the Purchasers, and the Sale of
the Shares. The respective obligations of the Placement Agent
hereunder and the Purchasers under the Subscription Agreements are subject to
the accuracy, when made and as of the Applicable Time and on the applicable
Closing Date, of the representations and warranties of the Company contained
herein, to the accuracy of the statements of the Company made in any
certificates pursuant to the provisions hereof, to the performance by the
Company of its obligations hereunder, and to each of the following additional
terms and conditions:
(a) The
Registration Statement is effective under the Securities Act, and no stop order
suspending the effectiveness of any Registration Statement or any part thereof,
preventing or suspending the use of any Base 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 Agent; and the Rule 462(b) Registration Statement,
if any, each Issuer Free Writing Prospectus (except for a road show), 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 Rules and Regulations and in accordance with Section 5(a)(i),
and the Rule 462(b) Registration Statement, if any, shall have become effective
immediately upon its filing with the Commission; and, if applicable, FINRA shall
have raised no objection to the fairness and reasonableness of the terms of this
Agreement or the transactions contemplated hereby.
(b) The
Placement Agent shall not have discovered and disclosed to the Company on or
prior to the applicable Closing Date that any Registration Statement or any
amendment or supplement thereto contains an untrue statement of a fact which, in
the opinion of counsel for the Placement Agent, is material or omits to state
any fact which, in the opinion of such counsel, is material and is required to
be stated therein or is necessary to make the statements therein not misleading,
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.
(c) All
corporate proceedings and other legal matters incident to the authorization,
form and validity of each of this Agreement, the Subscription Agreements, the
Shares, the Registration Statement, the General Disclosure Package, each Issuer
Free Writing Prospectus, 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 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.
-27-
(d) Blank
Rome LLP shall have furnished to the Placement Agent such counsel’s written
opinion and negative assurance statement, as counsel to the Company, addressed
to the Placement Agent and the Purchasers and dated as of the applicable Closing
Date, substantially in the form of Exhibit D
attached hereto.
(e) The
Placement Agent shall have received from ▇▇▇▇▇ & ▇▇▇▇▇▇, LLP, counsel
for the Placement Agent, such opinion or opinions, dated as of the applicable
Closing Date, with respect to such matters as the Placement Agent may reasonably
require, and the Company shall have furnished to such counsel such documents as
it requests to enable it to pass upon such matters.
(f) At
the time of the execution of this Agreement, the Placement Agent shall have
received from BDO ▇▇▇▇▇▇▇ LLP a letter, addressed to the Placement Agent,
executed and dated such date, in form and substance satisfactory to the
Placement Agent (i) confirming that they are an independent registered
accounting firm with respect to the Company and its subsidiaries within the
meaning of the Securities Act and the Rules and Regulations and PCAOB and (ii)
stating the conclusions and findings of such firm, of the type ordinarily
included in accountants’ “comfort letters” to underwriters, with respect to the
financial statements and certain financial information contained or incorporated
by reference in the Registration Statement, the General Disclosure Package and
the Prospectus.
(g) On
the effective date of any post-effective amendment to any Registration Statement
and on the applicable Closing Date, the Placement Agent shall have received a
letter (the “Bring-Down Letter”)
from BDO ▇▇▇▇▇▇▇ LLP addressed to the Placement Agent and dated the Closing Date
confirming, as of the date of the Bring-Down Letter (or, with respect to matters
involving changes or developments since the respective dates as of which
specified financial information is given in the General Disclosure Package and
the Prospectus, as the case may be, as of a date not more than three (3)
business days prior to the date of the Bring-Down Letter), the conclusions and
findings of such firm, of the type ordinarily included in accountants’ “comfort
letters” to underwriters, with respect to the financial information and other
matters covered by its letter delivered to the Placement Agent concurrently with
the execution of this Agreement pursuant to paragraph (h) of this Section 7.
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(h) The
Company shall have furnished to the Placement Agent and the Purchasers a
certificate, dated as of the applicable Closing Date, of its Chairman of the
Board, 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, that nothing has come to their attention to lead them to believe
that the Registration Statement and each amendment thereto, at the Applicable
Time, as of the date of this Agreement and as of the applicable Closing Date
included any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading, or that the General Disclosure Package, as of the Applicable
Time and as of the applicable Closing Date, any Permitted Free Writing
Prospectus as of its date and as of the applicable Closing Date, the Prospectus
and each amendment or supplement thereto, as of the respective date thereof and
as of the applicable Closing Date, included any untrue statement of a material
fact or omitted 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, (iii) to their knowledge, as of the applicable
Closing Date, the representations and warranties of the Company in this
Agreement are true and correct 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 applicable 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.
(i) 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 Schedule D and the
General Disclosure Package, the effect of which, in any such case described in
clause (i) or (ii) of this paragraph (i), 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 Shares on the terms and in the manner
contemplated in the General Disclosure Package.
(j) No
action shall have been taken and no law, statute, rule, regulation or order
shall have been enacted, adopted or issued by any governmental agency or body
which would prevent the issuance or sale of the Shares or materially and
adversely affect or potentially materially and adversely affect the business or
operations of the Company; and no injunction, restraining order or order of any
other nature by any federal or state court of competent jurisdiction shall have
been issued which would prevent the issuance or sale of the Shares or materially
and adversely affect or potentially materially and adversely affect the business
or operations of the Company.
-29-
(k) Subsequent
to the execution and delivery of this Agreement there shall not have occurred
any of the following: (i) trading in securities generally on the New
York Stock Exchange, NASDAQ CM 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
materially limited, or minimum or maximum prices or maximum range for prices
shall have been established on any such exchange or such market by the
Commission, by such exchange or market 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, or the subject of an act of terrorism, or there shall have been an
outbreak of or 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 such a material adverse change in
general economic, political or financial conditions (or the effect of
international conditions on the financial markets in the United States shall be
such) as to make it, in the judgment of the Placement Agent, 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 and the
Prospectus.
(l) The
NASDAQ CM shall have approved the Common Stock for listing therein, subject only
to official notice of issuance.
(m) The
Placement Agent shall have received the written agreements, substantially in the
form of Exhibit C
hereto, of the executive officers and directors of the Company listed in Schedule C to
this Agreement.
(n) The
Company shall have entered into Subscription Agreements with each applicable
Purchaser and such agreements shall be in full force and effect.
(o) Prior
to the applicable Closing Date, the Company shall have furnished to the
Placement Agent such further information, opinions, certificates (including a
Secretary’s Certificate), letters or documents as the Placement Agent shall have
reasonably requested.
(p) The
Company shall have executed and delivered a Placement Agent Warrant to purchase
the aggregate number of shares of Common Stock equal to five percent (5%) of the
Shares issued to
the Purchasers on the applicable Closing Date in the form of Exhibit B.
(q) The
Company shall have prepared and filed with the Commission a Current Report on
Form 8-K including as an exhibit thereto this Agreement.
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.
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8. Indemnification
and Contribution.
(a) The
Company shall indemnify and hold harmless the Placement Agent, its affiliates
and each of its and their respective directors, officers, members, employees,
representatives and agents (which will provide services to the Placement Agent)
and its affiliates, and each of its and their respective directors, officers,
members, employees, representatives and agents and each person, if any, who
controls the Placement Agent within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act) and each person, if any,
who controls the Placement Agent within the meaning of Section 15 of the
Securities Act of or Section 20 of the Exchange Act (collectively the
“Placement Agent
Indemnified Parties,” and each a “Placement Agent Indemnified
Party”) against any loss, claim, damage, expense or liability whatsoever
(or any action, investigation or proceeding in respect thereof), joint or
several, to which such Placement Agent Indemnified Party may become subject,
under the Securities Act or otherwise, insofar as such loss, claim, damage,
expense, liability, action, investigation or proceeding arises out of or is
based upon (i) any untrue statement or alleged untrue statement of a material
fact contained in any Issuer Free Writing Prospectus, any “issuer information”
filed or required to be filed pursuant to Rule 433(d) of the Rules and
Regulations, any Registration Statement or the Prospectus, or in any amendment
or supplement thereto or document incorporated by reference therein, or (ii) the
omission or alleged omission to state in any Issuer Free Writing Prospectus, any
“issuer information” filed or required to be filed pursuant to Rule 433(d) of
the Rules and Regulations, any Registration Statement or the Prospectus, or in
any amendment or supplement thereto or document incorporated by reference
therein, a material fact required to be stated therein or necessary to make the
statements therein not misleading, or (iii) any breach of the representations
and warranties of the Company contained herein or the failure of the Company to
perform its obligations hereunder or pursuant to any law, any act or failure to
act, or any alleged act or failure to act, by the Placement Agent in connection
with, or relating in any manner to the Shares or the Offering, and which is
included as part of or referred to in any loss, claim, damage, expense,
liability, action, investigation or proceeding arising out of or based upon
matters covered by subclause (i), (ii) or (iii) above of this Section 8(a)
(provided that the Company shall not be liable in the case of any matter covered
by this subclause (iii) to the extent that it is determined in a final judgment
by a court of competent jurisdiction that such loss, claim, damage, expense or
liability resulted primarily from any such act or failure to act undertaken or
omitted to be taken by the Placement Agent through its gross negligence or
willful misconduct), and shall reimburse the Placement Agent Indemnified Party
promptly upon demand for any reasonable legal fees or other expenses reasonably
incurred by that Placement Agent Indemnified Party in connection with
investigating, or preparing to defend, or defending against, or appearing as a
third party witness in respect of, or otherwise incurred in connection with, any
such loss, claim, damage, expense, liability, action, investigation or
proceeding, as such fees and expenses are incurred; provided, however, that the
Company shall not be liable in any such case to the extent that any such loss,
claim, damage, expense or liability arises out of or is based upon an untrue
statement or alleged untrue statement in, or omission or alleged omission from
any Registration Statement or the Prospectus, or any such amendment or
supplement thereto, or any Issuer Free Writing Prospectus made in reliance upon
and in conformity with written information furnished to the Company by the
Placement Agent specifically for use therein, which information the parties
hereto agree is limited to the Placement Agent’s Information); provided, further, that the
Company shall not be liable in any such case to the extent, but only to the
extent, that any such loss, damage or liability arises out of or is based upon
an untrue statement or alleged untrue statement or omission or alleged omission
made in any Preliminary Prospectus, any Issuer Free Writing Prospectus, the
Pricing Prospectus or any other prospectus relating to the Shares, or any such
amendment or supplement, if the Placement Agent failed to convey the General
Disclosure Package to the investor making the claim prior to the Applicable
Time. This indemnity agreement is not exclusive and will be in
addition to any liability, which the Company might otherwise have and shall not
limit any rights or remedies which may otherwise be available at law or in
equity to each Placement Agent Indemnified Party.
-31-
(b) The
Placement Agent shall indemnify and hold harmless the Company and its directors,
its officers who signed 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” and each a “Company Indemnified
Party”) against any loss, claim, damage, expense or liability whatsoever
(or any action, investigation or proceeding in respect thereof), joint or
several, to which such Company Indemnified Party may become subject, under the
Securities Act or otherwise, insofar as such loss, claim, damage, expense,
liability, action, investigation or proceeding arises out of or is based upon
(i) any untrue statement or alleged untrue statement of a material fact
contained in any Issuer Free Writing Prospectus, any “issuer information” filed
or required to be filed pursuant to Rule 433(d) of the Rules and Regulations,
any Registration Statement or the Prospectus, or in any amendment or supplement
thereto, or (ii) the omission or alleged omission to state in any Issuer Free
Writing Prospectus, any “issuer information” filed or required to be filed
pursuant to Rule 433(d) of the Rules and Regulations, any Registration Statement
or the Prospectus, or in any amendment or supplement thereto, a material fact
required to be stated therein or necessary to make the statements therein not
misleading, but in each case only to the extent that the untrue statement or
alleged untrue statement or omission or alleged omission was made in reliance
upon and in conformity with written information furnished to the Company by the
Placement Agent specifically for use therein, which information the parties
hereto agree is limited to the Placement Agent’s Information, and shall
reimburse the Company Indemnified Parties for any legal or other expenses
reasonably incurred by such party in connection with investigating or preparing
to defend or defending against or appearing as third party witness in connection
with any such loss, claim, damage, liability, action, investigation or
proceeding, as such fees and expenses are incurred. Notwithstanding
the provisions of this Section 8(b), in
no event shall any indemnity by the Placement Agent under this Section 8(b)
exceed the total compensation received by such Placement Agent in accordance
with Section 2(e).
-32-
(c) Promptly
after receipt by an indemnified party under this Section 8 of
notice of the commencement of any action, the indemnified party shall, if a
claim in respect thereof is to be made against an indemnifying party under this
Section 8,
notify such indemnifying party in writing of the commencement of that action;
provided, however, that the failure to notify the indemnifying party shall not
relieve it from any liability which it may have under this Section 8 except
to the extent it has been materially prejudiced by such failure; and, provided,
further, that the failure to notify an indemnifying party shall not relieve it
from any liability which it may have to an indemnified party otherwise than
under this Section 8. If
any such action shall be brought against an indemnified party, and it shall
notify the indemnifying party thereof, the indemnifying party shall be entitled
to participate therein and, to the extent that it wishes, jointly with any other
similarly notified indemnifying party, to assume the defense of such action with
counsel reasonably satisfactory to the indemnified party (which counsel shall
not, except with the written consent of the indemnified party, be counsel to the
indemnifying party). After notice from the indemnifying party to the
indemnified party of its election to assume the defense of such action, except
as provided herein, the indemnifying party shall not be liable to the
indemnified party under Section 8 for
any legal or other expenses subsequently incurred by the indemnified party in
connection with the defense of such action other than reasonable costs of
investigation; provided, however, that any
indemnified party shall have the right to employ separate counsel in any such
action and to participate in the defense of such action but the fees and
expenses of such counsel (other than reasonable costs of investigation) shall be
at the expense of such indemnified party unless (i) the employment thereof has
been specifically authorized in writing by the Company in the case of a claim
for indemnification under Section 8(a) or
▇▇▇▇ Capital in the case of a claim for indemnification under Section 8(b),
(ii) such indemnified party shall have been advised by its counsel that there
may be one or more legal defenses available to it which are different from or
additional to those available to the indemnifying party, or (iii) the
indemnifying party has failed to assume the defense of such action and employ
counsel reasonably satisfactory to the indemnified party within a reasonable
period of time after notice of the commencement of the action or the
indemnifying party does not diligently defend the action after assumption of the
defense, in which case, if such indemnified party notifies the indemnifying
party in writing that it elects to employ separate counsel at the expense of the
indemnifying party, the indemnifying party shall not have the right to assume
the defense of (or, in the case of a failure to diligently defend the action
after assumption of the defense, to continue to defend) such action on behalf of
such indemnified party and the indemnifying party shall be responsible for legal
or other expenses subsequently incurred by such indemnified party in connection
with the defense of such action; provided, however, that the indemnifying party
shall not, in connection with any one such action or separate but substantially
similar or related actions in the same jurisdiction arising out of the same
general allegations or circumstances, be liable for the reasonable fees and
expenses of more than one separate firm of attorneys at any time for all such
indemnified parties (in addition to any local counsel), which firm shall be
designated in writing by ▇▇▇▇ Capital if the indemnified parties under this
Section 8
consist of any Placement Agent Indemnified Party or by the Company if the
indemnified parties under this Section 8
consist of any Company Indemnified Parties. Subject to this Section 8(c),
the amount payable by an indemnifying party under Section 8 shall
include, but not be limited to, (x) reasonable legal fees and expenses of
counsel to the indemnified party and any other expenses in investigating, or
preparing to defend or defending against, or appearing as a third party witness
in respect of, or otherwise incurred in connection with, any action,
investigation, proceeding or claim, and (y) all amounts paid in settlement of
any of the foregoing. No indemnifying party shall, without the prior
written consent of the indemnified parties, settle or compromise or consent to
the entry of judgment with respect to any pending or threatened action or any
claim whatsoever, in respect of which indemnification or contribution could be
sought under this Section 8
(whether or not the indemnified parties are actual or potential parties
thereto), unless such settlement, compromise or consent (i) includes an
unconditional release of each indemnified party in form and substance reasonably
satisfactory to such indemnified party from all liability arising out of such
action or claim 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 any indemnified
party. Subject to the provisions of the following sentence, no
indemnifying party shall be liable for settlement of any pending or threatened
action or any claim whatsoever that is effected without its written consent
(which consent shall not be unreasonably withheld or delayed), but if settled
with its written consent, if its consent has been unreasonably withheld or
delayed or if there be a judgment for the plaintiff in any such matter, the
indemnifying party agrees to indemnify and hold harmless any indemnified party
from and against any loss or liability by reason of such settlement or
judgment. In addition, if at any time an indemnified party shall have
requested that an indemnifying party reimburse the indemnified party for fees
and expenses of counsel, such indemnifying party agrees that it shall be liable
for any settlement of the nature contemplated herein effected without its
written consent if (i) such settlement is entered into more than forty-five (45)
days after receipt by such indemnifying party of the request for reimbursement,
(ii) such indemnifying party shall have received notice of the terms of such
settlement at least thirty (30) days prior to such settlement being entered into
and (iii) such indemnifying party shall not have reimbursed such indemnified
party in accordance with such request prior to the date of such
settlement.
-33-
(d) If
the indemnification provided for in this Section 8 is
unavailable or insufficient to hold harmless an indemnified party under Section 8(a) or
Section 8(b),
then each indemnifying party shall, in lieu of indemnifying such indemnified
party, contribute to the amount paid, payable or otherwise incurred by such
indemnified party as a result of such loss, claim, damage, expense or liability
(or any action, investigation or proceeding in respect thereof), as incurred
(i) in such proportion as shall be appropriate to reflect the relative
benefits received by the Company on the one hand and the Placement Agent on the
other hand from the offering of the Shares, or (ii) if the allocation
provided by clause (i) of this Section 8(d) is
not permitted by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits referred to in clause (i) of this Section 8(d),
but also the relative fault of the Company on the one hand and the Placement
Agent on the other with respect to the statements, omissions, acts or failures
to act which resulted in such loss, claim, damage, expense or liability (or any
action, investigation or proceeding in respect thereof) as well as any other
relevant equitable considerations. The relative benefits received by
the Company on the one hand and the Placement Agent on the other with respect to
such offering shall be deemed to be in the same proportion as the total net
proceeds from the offering of the Shares purchased under this Agreement and the
Subscription Agreements (before deducting expenses) received by the Company bear
to the total fees received by the Placement Agent in connection with the
Offering, in each case as set forth in the table on the cover page of the
Prospectus. The relative fault of the Company on the one hand and the
Placement Agent on the other shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company on the one hand or the Placement Agent on the other, the
intent of the parties and their relative knowledge, access to information and
opportunity to correct or prevent such untrue statement, omission, act or
failure to act; provided that the parties hereto agree that the written
information furnished to the Company by the Placement Agent for use in any
Registration Statement or the Prospectus, or in any amendment or supplement
thereto, consists solely of the Placement Agent’s Information as defined in
Section 17. The
Company and the Placement Agent 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, damage, expense, liability, action, investigation or
proceeding referred to above in this Section 8(d)
shall be deemed to include, for purposes of this Section 8(d),
any reasonable legal fees or other expenses reasonably incurred by such
indemnified party in connection with investigating, preparing to defend or
defending against or appearing as a third party witness in respect of, or
otherwise incurred in connection with, any such loss, claim, damage, expense,
liability, action, investigation or proceeding. Notwithstanding the
provisions of this Section 8(d),
and except in the case of fraud or willful misconduct, the Placement Agent shall
not be required to contribute any amount in excess of the total compensation
received by the Placement Agent in accordance with Section 2(e)
less the amount of any damages which the Placement Agent has otherwise paid or
become liable to pay by reason of any untrue or alleged untrue statement,
omission or alleged omission, act or alleged act or failure to act or alleged
failure to act. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation.
9. Termination. The
obligations of the Placement Agent and the Purchasers hereunder and under the
Subscription Agreements may be terminated by the Placement Agent, 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(i), 7(j),
7(k) or 7(l) have occurred or if the Purchasers shall decline to purchase
the Shares for any reason permitted under this Agreement or the Subscription
Agreements. The Company hereby acknowledges that in the event that
this Agreement is terminated by the Placement Agent pursuant to the terms
hereof, the Subscription Agreements shall automatically terminate without any
further action on the part of the parties thereto.
10. Reimbursement
of Placement Agent’s Expenses. Notwithstanding anything to the
contrary in this Agreement, if (a) this Agreement shall have been terminated
pursuant to Section 9, (b)
the Company shall fail to tender the Shares for delivery to the Purchasers for
any reason not permitted under this Agreement or the Subscription Agreements,
(c) the Purchasers shall decline to purchase the Shares for any reason permitted
under this Agreement or (d) the sale of the Shares is not consummated because
any condition to the obligations of the Purchasers or the Placement Agent set
forth herein is not satisfied or because of the refusal, inability or failure on
the part of the Company to perform any agreement herein or to satisfy any
condition or to comply with the provisions hereof, then in addition to the
payment of amounts in accordance with Section 6, the
Company shall reimburse the Placement Agent for the reasonable and documented
fees and expenses of the Placement Agent’s counsel and for such other
out-of-pocket expenses as shall have been reasonably incurred by them in
connection with this Agreement and the proposed purchase of the Shares,
including, without limitation, travel and lodging expenses of the Placement
Agent approved in advance by the Company, and upon demand the Company shall pay
the full amount thereof to the Placement Agent.
-34-
11. Absence
of Fiduciary Relationship. The Company acknowledges and agrees
that:
(a) the
Placement Agent’s responsibility to the Company is solely contractual in nature,
the Placement Agent has been retained solely to act as Placement Agent in
connection with the Offering and no fiduciary, advisory or agency relationship
between the Company and the Placement Agent has been created in respect of any
of the transactions contemplated by this Agreement, irrespective of whether the
Placement Agent has advised or is advising the Company on other
matters;
(b) the
price of the Shares set forth in this Agreement was established by the Company
following discussions and arms-length negotiations with the Purchasers, and the
Company is capable of evaluating and understanding, and understands and accepts,
the terms, risks and conditions of the transactions contemplated by this
Agreement;
(c) it
has been advised that the Placement Agent and its affiliates are engaged in a
broad range of transactions which may involve interests that differ from those
of the Company and that the Placement Agent has no obligation to disclose such
interests and transactions to the Company by virtue of any fiduciary, advisory
or agency relationship; and
(d) it
waives, to the fullest extent permitted by law, any claims it may have against
the Placement Agent for breach of fiduciary duty or alleged breach of fiduciary
duty and agrees that the Placement Agent shall have no liability (whether direct
or indirect) to the Company in respect of such a fiduciary duty claim or to any
person asserting a fiduciary duty claim on behalf of or in right of the Company,
including stockholders, employees or creditors of the Company.
12. Successors;
Persons Entitled to Benefit of Agreement. This Agreement shall
inure to the benefit of and be binding upon the Placement Agent, the Company,
and their respective successors and assigns. This Agreement shall
also inure to the benefit of the Purchasers, and each of 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 Agent shall be for the benefit of the Company Indemnified
Parties. It is understood that Placement Agent’s responsibility to
the Company is solely contractual in nature and the Placement Agent does not owe
the Company, or any other party, any fiduciary duty as a result of this
Agreement. No Purchaser shall be deemed to be a successor or assign
by reason merely of such purchase.
-35-
13. Survival
of Indemnities, Representations, Warranties, Etc. The
respective indemnities, covenants, agreements, representations, warranties and
other statements of the Company and the Placement Agent, as set forth in this
Agreement or made by them respectively, pursuant to this Agreement, shall remain
in full force and effect, regardless of any investigation made by or on behalf
of the Placement Agent, the Company, the Purchasers or any person controlling
any of them and shall survive delivery of and payment for the
Shares. Notwithstanding any termination of this Agreement, including
without limitation any termination pursuant to Section 9, the
indemnity and contribution agreements contained in Section 8 and
the covenants, representations, warranties set forth in this Agreement shall not
terminate and shall remain in full force and effect at all times.
14. Notices. All
statements, requests, notices and agreements hereunder shall be in writing,
and:
(a) if
to the Placement Agent, shall be delivered or sent by mail, telex, facsimile
transmission or email to ▇▇▇▇ Capital Partners, Attention: ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇,
Fax: (▇▇▇) ▇▇▇-▇▇▇▇; and
(b) if
to the Company, shall be delivered or sent by mail, telex, facsimile
transmission or email to ▇▇▇▇▇▇ Technologies, Inc., Attention: ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇▇▇, Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇;
provided, however, that any
notice to the Placement Agent pursuant to Section 8 shall
be delivered or sent by mail, telex or facsimile transmission to the Placement
Agent at its address set forth in its acceptance telex to the Placement Agent,
which address will be supplied to any other party hereto by the Placement Agent
upon request. Any such statements, requests, notices or agreements
shall take effect at the time of receipt thereof, except that any such
statement, request, notice or agreement delivered or sent by email shall take
effect at the time of confirmation of receipt thereof by the recipient
thereof.
15. Definition
of Certain Terms. For purposes of this Agreement, (a)
“business day” means any day on which the NASDAQ CM is open for trading, (b)
“subsidiary” has the meaning set forth in Rule 405 of the Rules and Regulations,
and (c) “to the Company’s knowledge” or “to the knowledge of the Company”
or words of similar import shall mean to the actual knowledge of any executive
officer or director of the Company.
16. Lock-up
Restriction. ▇▇▇▇ Capital hereby agrees that, as required by
Rule 5110(g) of the FINRA Rules, the Placement Agent Warrants and the Placement
Agent Warrant Shares shall not be sold during the Offering, or sold,
transferred, assigned, pledged, or hypothecated, or be the subject of any
hedging, short sale, derivative, put, or call transaction that would result in
the effective economic disposition of the securities by any person for a period
of 180 days immediately following the date of issuance of such Placement Agent
Warrants.
-36-
17. Governing
Law, Agent for Service and Jurisdiction. This Agreement shall
be governed by and construed in accordance with the laws of the State of New
York. 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
County of Rockland 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 Agent each hereby consent to
the jurisdiction of such courts and personal service with respect thereto. The
Company and the Placement Agent 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 Agent. 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 Agent 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. Placement
Agent’s Information. The parties hereto acknowledge and agree
that, for all purposes of this Agreement, the Placement Agent’s Information
consists solely of the following information in the Prospectus: (a)
the last paragraph on the front cover page concerning the terms of the offering;
and (b) the statements concerning the Placement Agent contained in the first
paragraph under the heading “Plan of Distribution.”
19. 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 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.
20. General. This
Agreement constitutes the entire agreement of the parties to this Agreement and
supersedes all prior written or oral and all contemporaneous oral agreements,
understandings and negotiations with respect to the subject matter
hereof. In this Agreement, the masculine, feminine and neuter genders
and the singular and the plural include one another. The section
headings in this Agreement are for the convenience of the parties only and will
not affect the construction or interpretation of this Agreement. This
Agreement may be amended or modified, and the observance of any term of this
Agreement may be waived, only by a writing signed by the Company and the
Placement Agent.
21. Counterparts. This
Agreement may be signed in any number of counterparts, each of which shall be an
original, with the same effect as if the signatures thereto and hereto were upon
the same instrument and such signatures may be delivered by
facsimile.
-37-
If the
foregoing is in accordance with your understanding of the agreement between the
Company and the Placement Agent, kindly indicate your acceptance in the space
provided for that purpose below.
|
Very
truly yours,
|
|
|
▇▇▇▇▇▇
TECHNOLOGIES, INC.
|
|
|
By:
|
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇ |
|
Name:
|
▇▇▇▇▇ ▇▇▇▇▇▇▇ |
|
Title:
|
President |
Accepted
as of the date
first
above written:
|
▇▇▇▇
CAPITAL PARTNERS
|
|
|
By:
|
/s/ ▇▇▇▇ ▇▇ |
|
Name:
|
▇▇▇▇ ▇▇ |
|
Title:
|
Director |
-38-
SCHEDULE
A
EXCLUDED
INVESTORS
▇▇▇▇▇▇,
▇▇▇▇▇▇ & Co.
Bam
Capital
Canal
Mezzanine Holdings
Centrecourt
Asset Management
Chestnut
Ridge
Cranshire
Capital
Greentech
Investment
Greenway
Capital, LLC
KOM
Capital Management, LLC
▇▇▇▇▇
Asset Management
Libertyview
Capital Management, Inc.
Outpoint
Capital Management
Patriot
Capital Funding
▇▇▇▇▇▇▇▇
Wealth Mngt.
Praesidian
Capital
Professional
Traders Fund
▇▇▇▇
Capital Group
SIAR
Capital (Sherleigh Associates)
▇▇▇▇▇
▇▇▇▇▇
Tail Wind
Advisory & Management
Third
Coast Capital Management
Vision
Capital
Wynnefield
Capital
Yorkville
Advisors
SCHEDULE
B
DISCLOSURE
INFORMATION
None.
SCHEDULE
C
LIST
OF DIRECTORS AND EXECUTIVE OFFICERS SUBJECT TO SECTION 5(a)(xi)
▇▇▇▇▇ ▇.
▇▇▇▇▇▇
▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇
▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇
▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇
▇▇▇▇ ▇.
▇▇▇▇▇
SCHEDULE
D
SUPPLEMENT
TO REPRESENTATIONS AND WARRANTIES
|
1.
|
Section
3(xviii) and Section 7(i): None
except:
|
|
|
·
|
The
Company’s results of operations in 2009, to date are not comparable to the
Company’s 2008 results of
operations.
|
|
2.
|
Section
3(a)(xxiv): Schedule of Patents and
Trademarks – Schedule Attached
|
|
3.
|
Section
3(a)(xxxi):
|
|
|
·
|
April
1, 1999 release of Trichlorofluoromethane (see Item 3 - Legal Proceedings
in Form 10-K for year ended
12/31/2008);
|
|
|
·
|
On
July 14, 2004, ▇▇▇▇▇▇ Technologies Company reported a loss to the US
Environmental Protection Agency (“EPA”) of approximately 13,000 lbs. of
R500 refrigerant at its Champaign, Illinois
facility
|
|
|
·
|
Normal
processing and handling of refrigerants results in a certain amount of
fugitive emissions, and ▇▇▇▇▇▇ Technologies Company submits annual Toxic
Release Inventory Form R reports to the EPA reporting fugitive emissions
of certain refrigerants that occur during each calendar year through
normal processing and handling of these
refrigerants.
|
|
4.
|
Section
3(a)(xli): None, except as provided
in
|
|
|
·
|
▇▇▇▇▇▇
and ▇▇▇▇▇▇▇ Engagement Agreement, dated May 23,
2008;
|
|
5.
|
Section
3(a)(xlii):
|
|
|
·
|
▇▇▇▇▇▇
Technologies Company is prohibited from, among other things, paying “any
cash dividends, make any capital distribution in cash or other Property or
return of capital, or purchase or redeem any of its stock or other
securities, or retire any of its stock, or take any action which would
have an effect equivalent to any of the foregoing.” See Amended
and Restated Loan Agreement between ▇▇▇▇▇▇ Technologies Company and Keltic
Financial Partners, dated June 26, 2007, filed as an Exhibit to the
Company’s Schedule TO filed June 29, 2007; together with amendments filed
as exhibits 10.30 to the Company’s Form 10-K for year ended 12/31/2008,
amendment filed as exhibit 10.1 to the Company’s Form 10-Q for period
ended 3/31/2009, and the amendment referenced in the Form 8-K filed by the
Company on July 21, 2009.
|
SCHEDULE
OF PATENTS & TRADEMARKS
(as
of 06/10/09)
|
TITLE-NAME
|
TYPE
|
INVENTOR
|
OWNER
|
DATE
ISSUED
|
NUMBER
|
NEXT
ACTION DUE
|
||||||
|
Method
& Apparatus for Refrigerant Reclamation
|
Patent
|
▇.
▇▇▇▇▇▇
|
▇▇▇▇▇▇
210
|
1/3/95
|
5,377,499
|
|||||||
|
Hydraulic
System for Recovering Refrigerants
|
Patent
|
▇.
▇▇▇▇▇▇
|
▇▇▇▇▇▇
209
|
4/2/96
|
5,502,974
|
|||||||
|
Method
& Apparatus for Reclaiming a Refrigerant
|
Patent
|
▇.
▇▇▇▇▇▇
|
▇▇▇▇▇▇
|
6/11/91
|
5,022,230
|
Expired
|
||||||
|
Apparatus
for Recovering and Analyzing Volatile Refrigerants
|
Patent
|
▇.
▇▇▇▇▇▇
|
▇▇▇▇▇▇
201
|
9/8/98
|
5,802,859
|
3rd
Maint Fee 3/8/10
|
||||||
|
Apparatus
& Method For Recovering Volatile Refrigerants
|
Patent
|
▇.
▇▇▇▇▇▇
|
▇▇▇▇▇▇
201.1
|
11/7/00
|
6,141,977
|
3rd
Maint Fee 5/7/12
|
||||||
|
Method
& Apparatus For Sonic Cleaning of Heat Exchangers
|
Patent
|
▇.
▇▇▇▇▇▇
|
▇▇▇▇▇▇
204
|
9/18/01
|
6,290,778
|
3rd
Maint Fee 3/18/13
|
||||||
|
Apparatus
& Method For Flushing a Chiller System
|
Patent
|
▇.
▇▇▇▇▇▇ &
A.
▇▇▇▇
|
▇▇▇▇▇▇
203
|
3/19/02
|
6,357,240
|
2nd
Maint Fee 9/19/09
|
||||||
|
Apparatus
& Method For Flushing a Refrigeration System
|
Patent
|
A.
Mika &
▇.
▇▇▇▇▇▇▇
|
▇▇▇▇▇▇
202
|
12/26/00
|
6,164,080
|
3rd
Maint Fee 6/26/12
|
||||||
|
Method
& Apparatus For Measuring and Improving Efficiency In Refrigeration
Systems
|
Patent
|
▇.
▇▇▇▇▇▇ &
▇.
▇▇▇▇▇▇▇
|
▇▇▇▇▇▇ 206A
|
1/14/03
|
6,505,475
|
2nd
Maint Fee 7/14/12
|
||||||
|
Method
& Apparatus For Measuring and Improving Efficiency In Refrigeration
Systems
|
Patent
|
▇.
▇▇▇▇▇▇ &
▇.
▇▇▇▇▇▇▇
|
▇▇▇▇▇▇
206.1
|
6/13/06
|
7,059,143
|
|||||||
|
Method
& Apparatus For Measuring and Improving Efficiency in Refrigeration
Systems
|
Patent
Pending
|
▇.
▇▇▇▇▇▇ &
▇.
▇▇▇▇▇▇▇
|
▇▇▇▇▇▇
206.2
|
filed
7/14/05
|
7,086,240
|
|
TITLE-NAME
|
TYPE
|
INVENTOR
|
OWNER
|
DATE
ISSUED
|
NUMBER
|
NEXT
ACTION DUE
|
||||||
|
Method
& Apparatus For Measuring and Improving Efficiency in Refrigeration
Systems
|
Patent
Pending
|
▇.
▇▇▇▇▇▇ &
▇.
▇▇▇▇▇▇▇
|
▇▇▇▇▇▇
206.3
|
May
19, 2009
|
7,533,536
|
1st
Maint. Fee 11/19/12
|
||||||
|
Method
& Apparatus For Optimizing Refrigeration Systems
|
Patent
Pending
|
▇.
▇▇▇▇▇▇
|
▇▇▇▇▇▇
208
|
filed
12/9/03
|
App.
# 10/730791
|
Notice
of Allowance mailed 6/2/09
|
||||||
|
System
and Method for Recycling Non-Usable Refrigerant Containers
|
Provisional
|
▇.
▇▇▇▇▇▇
|
▇▇▇▇▇▇
211
|
filed
10/14/07
|
App.
# 60/979,840
|
Util
& Foreign Filing 10/14/08
|
||||||
|
Method
& Apparatus For Measuring and Improving Efficiency in Refrigeration
Systems
|
|
Patent
Pending
|
|
▇.
▇▇▇▇▇▇ &
▇.
▇▇▇▇▇▇▇
|
|
▇▇▇▇▇▇
206.4
|
|
filed,
5/19/09
|
|
App.#
12/468506
|
|
-2-
|
TITLE-NAME
|
TYPE
|
INVENTOR
|
OWNER
|
DATE
ISSUED
|
NUMBER
|
NEXT
ACTION DUE
|
||||||
|
GLACIER
|
Trademark
|
N/A
|
▇▇▇▇▇▇
806
|
3/2/99
|
2,227,148
|
Renewal
3/2/19
|
||||||
|
ZUGIBEAST
|
Trademark
|
N/A
|
▇▇▇▇▇▇
805
|
7/9/96
|
1,985,422
|
Renewal
7/9/16
|
||||||
|
HTI
|
Trademark
|
N/A
|
▇▇▇▇▇▇
|
4/23/96
|
1,970,063
|
|||||||
|
R-SIDE
|
Trademark
|
N/A
|
▇▇▇▇▇▇
808
|
7/30/02
|
2,601,434
|
Renewal
7/30/12
|
||||||
|
REFRIGERANTSIDE
|
Trademark
|
N/A
|
▇▇▇▇▇▇
807
|
4/9/02
|
2,559,214
|
Renewal
4/9/12
|
||||||
|
▇▇▇▇▇▇
Technologies,
|
Trademark
|
N/A
|
▇▇▇▇▇▇
804
|
4/23/96
|
1,969,986
|
Renewal
4/23/16
|
||||||
|
Chiller
Chemistry
|
Trademark
|
N/A
|
▇▇▇▇▇▇
803
|
12/26/06
|
3,190,044
|
D.O.U.
12/26/11
|
||||||
|
ChillSmart
|
Trademark
|
N/A
|
▇▇▇▇▇▇
802
|
12/12/06
|
3,184,719
|
D.O.U.
12/12/11
|
||||||
|
Fluid
Chemistry
|
|
Trademark
|
|
▇▇
|
|
▇▇▇▇▇▇
|
|
12/22/2008
|
|
77638497
|
|
Response
to Office Action
9/17/09
|
-3-
|
TITLE-NAME
|
INVENTOR
|
COUNTRY
|
DATE
|
NUMBER
|
NEXT
ACTION DUE
|
|||||
|
FOREIGN
PATENTS & TRADEMARKS:
|
||||||||||
|
Method
& Apparatus for Reclaiming a Refrigerant
|
Patent
▇. ▇▇▇▇▇▇
|
CANADA
|
Exp.
5/24/11
|
Patent
# 2,084,088
|
||||||
|
Method
& Apparatus for Reclaiming a Refrigerant
|
Patent
▇. ▇▇▇▇▇▇
|
Australia
|
Exp.
5/24/11
|
Patent
# 660280 (82098/91)
|
18th
Annuity 5/24/09
|
|||||
|
Method
& Apparatus For Optimizing Refrigeration Systems
|
PCT
▇. ▇▇▇▇▇▇
|
▇▇▇▇▇▇
208PCT
|
filed
12/9/03
|
PCT/US03/39175
|
||||||
|
Method
& Apparatus for Refrigerant Reclamation
|
Patent
▇. ▇▇▇▇▇▇
|
▇▇▇▇▇▇
210
BRAZIL
|
Issued
8/8/00 – Exp 12/6/14 Patent #PI9404879-7
|
16th
Annuity 12/8/09
|
||||||
|
CANADA
|
Issued 8/20/02 – Exp 12/8/14 Patent #2137771 |
16th
Annuity 12/8/09
|
||||||||
|
CHINA
|
Issued 11/9/01 - Exp 12/9/14 Reg. #▇▇▇▇▇ |
▇▇▇▇
▇▇▇▇▇▇▇ ▇▇/▇/▇▇
|
||||||||
|
▇▇▇▇▇
▇▇▇▇
|
Patent Pending - App filed 12/7/94, SN 5042 | |||||||||
|
ISRAEL
|
Issued 10/14/97 – Exp 12/6/14 Patent#111899 |
17th
Annuity 12/6/09
|
||||||||
|
JAPAN
|
Issued - App filed 12/8/94, SN 331070/94 |
6th
Annuity 4/21/10
|
||||||||
|
MEXICO
|
Issued 6/25/99 - Exp 12/9/14 Patent # 192486 |
17th
Annuity 12/9/10
|
||||||||
|
POLAND
|
Issued 12/1/98 - Exp 12/5/14 Patent#176 518 |
16th
Annuity 12/8/09
|
||||||||
|
RUSSIA
|
Issued 8/20/99 - Exp 8/20/14 Patent # 2134851 |
16th
Annuity ▇▇/▇/▇▇
|
||||||||
|
|
|
▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ (▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇,
Netherlands, Spain, Sweden, Switzerland/Liechtenstein, United
Kingdom)
Issued
3/31/99 - Exp 12/8/14 Patent # 0682218
|
|
16th
Annuity
12/8/09
|
||||||
-4-
|
TITLE-NAME
|
INVENTOR
|
COUNTRY
|
DATE
|
NUMBER
|
NEXT
ACTION DUE
|
|||||
|
Method
& Apparatus For Optimizing Refrigeration Systems
|
▇.
▇▇▇▇▇▇
|
▇▇▇▇▇▇
208
|
||||||||
|
Australia
|
filed
6/7/05
|
App
# 2003300845
|
17th
Annuity 12/9/09
|
|||||||
|
Canada
|
filed
6/6/05
|
App
# 2,509,207
|
16th
Annuity 12/9/09
|
|||||||
|
China
|
filed
8/9/05
|
App
# 200380109603.5
|
16th
Annuity 12/9/09
|
|||||||
|
Eur.
Comm.
|
filed
4/29/05
|
App
# 03 812 911.0
|
7th
Annuity 12/9/09
|
|||||||
|
India
|
filed
6/7/05
|
▇▇▇
# ▇▇▇▇/▇▇▇ NP/05
|
||||||||
|
Israel
|
filed
6/7/05
|
App
# 169,052
|
16th
Annuity 12/9/09
|
|||||||
|
Japan
|
filed
6/9/05
|
App
# 2005-511749
|
||||||||
|
So.
Korea
|
filed
6/9/05
|
App
# 2005-7010468
|
||||||||
|
Mexico
|
filed
6/10/05
|
App
# PA/a/2005/006174
|
16th
Annuity 12/9/09
|
|||||||
|
New
Zealand
|
filed
6/13/05
|
App
# 540685
|
Renewal
12/9/10
|
|||||||
|
Philippine
|
filed
6/9/05
|
App
# 501094-1-05
|
||||||||
|
Poland
|
filed
10/13/05
|
App
# P 377583
|
||||||||
|
Eurasian
|
filed
7/8/05
|
App
# 200500945
|
Response
to Office Action 7/18/09
|
|||||||
|
Singapore
|
filed
6/9/05
|
App
# 200503690-0
|
▇▇▇
▇▇▇▇▇▇▇ ▇▇/▇/▇▇
|
|||||||
|
▇▇▇▇▇
▇▇▇▇▇▇
|
filed
6/8/05
|
App
# 2005/04679
|
Renewal
12/9/11
|
|||||||
|
▇▇▇▇▇▇
208.1
Australia
|
filed
7/9/08
|
App
# ▇▇▇▇▇▇▇▇▇▇
|
2nd
Annuity 12/9/09
|
|||||||
|
New
Zealand
|
filed
▇/▇▇/▇▇
|
▇▇▇
# ▇▇▇▇▇▇
|
||||||||
|
▇▇▇▇▇
▇▇▇▇▇▇
|
issued
5/3/07
|
2006/04590
|
6th Annuity
12/9/09
|
|||||||
|
Singapore
|
filed
7/16/07
|
App
# 200705246-7
|
||||||||
|
▇▇▇▇▇▇
208.2
Singapore
|
filed
7/16/07
|
App
# 200705247-5
|
||||||||
|
Chiller
Chemistry
|
Trademark ▇/▇
|
▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
|
10/17/05
|
2005/19998
|
||||||
|
MPU
|
9/21/05
|
878513
|
Renewal
9/21/15
|
|||||||
|
ChillSmart
|
Service
▇▇▇▇ TrademarkN/A
|
▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
|
10/17/05
|
2005/1997
|
||||||
|
|
|
MPU
|
|
9/22/05
|
|
878512
|
|
-5-
EXHIBIT
A
FORM
OF SUBSCRIPTION AGREEMENT
SUBSCRIPTION
AGREEMENT
▇▇▇▇▇▇
Technologies, Inc.
▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Gentlemen:
The
undersigned (the “Purchaser”) hereby
confirms its agreement with you as follows:
1. This
Subscription Agreement, including the Terms and Conditions For Purchase of
Shares attached hereto as Annex I
(collectively, this “Agreement”) is made
as of the date set forth below between ▇▇▇▇▇▇ Technologies, Inc., a New York
corporation (the “Company”), and the
Purchaser.
2. The
Company has authorized the sale and issuance to certain investors of up to an
aggregate of 3,870,000 shares (individually, a “Share” and collectively, the
“Shares”) of
its common stock, par value $0.01 per share (the “Common Stock”) for a
purchase price of $1.15 per Share (the “Purchase
Price”).
3. The
offering and sale of the Shares (the “Offering”) are being
made pursuant to (a) an effective Registration Statement on Form S-3, File No.
333-151973 (including the Prospectus contained therein (the “Base Prospectus”),
the “Registration
Statement”), filed by the Company with the Securities and Exchange
Commission (the “Commission”), (b) if
applicable, certain “free writing prospectuses” (as that term is defined in Rule
405 under the Securities Act of 1933, as amended (the “Act”)), that have
been or will be filed with the Commission and delivered to the Purchaser on or
prior to the date hereof and (c) a Prospectus Supplement (the “Prospectus
Supplement” and together with the Base Prospectus, the “Prospectus”)
containing certain supplemental information regarding the Shares and terms of
the Offering that will be filed with the Commission and delivered to the
Purchaser (or made available to the Purchaser by the filing by the Company of an
electronic version thereof with the Commission), along with the Company’s
counterpart to this Agreement and (d) if the Company has filed an abbreviated
registration statement to register additional securities pursuant to Rule 462(b)
(the “462(b)
Registration Statement”), then any reference herein to the Registration
Statements shall also be deemed to include such 462(b) Registration
Statement.
4. The
Company and the Purchaser agree that the Purchaser will purchase from the
Company and the Company will issue and sell to the Purchaser the Shares set
forth below for the aggregate purchase price set forth below. The
Shares shall be purchased pursuant to the Terms and Conditions for Purchase of
Shares attached hereto as Annex I and
incorporated herein by this reference as if fully set forth
herein. The Purchaser acknowledges that the Offering is not being
underwritten by the placement agent (the “Placement Agent”)
named in the Prospectus Supplement and that there is no minimum offering
amount.
5. The
manner of settlement of the Shares purchased by the Purchaser shall be as
follows:
Delivery
versus payment (“DVP”) through the
Depository Trust Company (“DTC”) (i.e., at the
Closing (as defined in Section 3.1 of Annex I) , the Company shall issue Shares
registered in the Purchaser’s name and address as set forth below and released
by Continental Stock Transfer & Trust Company (the “Transfer Agent”)
directly to the account(s) at ▇▇▇▇ Capital Partners (“▇▇▇▇ Capital”)
identified by the Purchaser; upon receipt of such Shares, ▇▇▇▇ Capital shall
promptly electronically deliver such shares to the Purchaser, and simultaneously
therewith payment shall be made by ▇▇▇▇ Capital by wire transfer to the Company)
NO LATER THAN ONE (1) BUSINESS
DAY AFTER THE EXECUTION OF THIS AGREEMENT BY THE PURCHASER AND THE COMPANY, THE
PURCHASER SHALL:
|
|
(I)
|
NOTIFY
▇▇▇▇ CAPITAL OF THE ACCOUNT OR ACCOUNTS AT ▇▇▇▇ CAPITAL TO BE CREDITED
WITH THE SHARES BEING PURCHASED BY SUCH PURCHASER;
AND
|
|
|
(II)
|
CONFIRM
THAT THE ACCOUNT OR ACCOUNTS AT ▇▇▇▇ CAPITAL TO BE CREDITED WITH THE
SHARES BEING PURCHASED BY THE PURCHASER HAVE A MINIMUM BALANCE EQUAL TO
THE AGGREGATE PURCHASE PRICE FOR THE SHARES BEING PURCHASED BY THE
PURCHASER.
|
IT
IS THE PURCHASER’S RESPONSIBILITY TO (A) MAKE THE NECESSARY WIRE TRANSFER OR
CONFIRM THE PROPER ACCOUNT BALANCE IN A TIMELY MANNER AND (B) ARRANGE FOR
SETTLEMENT BY WAY OF DVP IN A TIMELY MANNER. IF THE PURCHASER DOES
NOT DELIVER THE AGGREGATE PURCHASE PRICE FOR THE SHARES OR DOES NOT MAKE PROPER
ARRANGEMENTS FOR SETTLEMENT IN A TIMELY MANNER, THE SHARES MAY NOT BE DELIVERED
AT CLOSING TO THE PURCHASER OR THE PURCHASER MAY BE EXCLUDED FROM THE OFFERING
ALTOGETHER.
6. The
Purchaser represents that, except as set forth below, (a) it has had no
position, office or other material relationship within the past three years with
the Company or persons known to it to be affiliates of the Company, (b) it is
not a Financial Industry Regulatory Authority, Inc. (“FINRA”) member or an
Associated Person (as such term is defined under the FINRA Membership and
Registration Rules Section 1011) as of the Closing, and (c) neither the
Purchaser nor any group of Purchasers (as identified in a public filing made
with the Commission) of which the Purchaser is a part in connection with the
Offering, acquired, or obtained the right to acquire, 20% or more of the Common
Stock (or securities convertible into or exercisable for Common Stock) or the
voting power of the Company on a post-transaction basis. Exceptions:
_______________________________________________. (If no exceptions,
write “none.” If left blank, response will be deemed to be
“none.”)
-2-
7. The
Purchaser represents that it has received (or otherwise had made available to it
by the filing by the Company of an electronic version thereof with the
Commission) the Base Prospectus, dated September 5, 2008, which is a part
of the Company’s Registration Statement, the documents incorporated by reference
therein and any free writing prospectus (collectively, the “Disclosure Package”),
prior to or in connection with the receipt of this Agreement. The
Purchaser acknowledges that, prior to the delivery of this Agreement to the
Company, the Purchaser will receive certain additional information regarding the
Offering, including pricing information (the “Offering
Information”). Such information may be provided to the Purchaser by any
means permitted under the Act, including the Prospectus Supplement, a free
writing prospectus and oral communications.
8. No
offer by the Purchaser to buy the Shares will be accepted and no part of the
Purchase Price will be delivered to the Company until the Purchaser has received
the Offering Information and the Company has accepted such offer by
countersigning a copy of this Agreement, and any such offer may be withdrawn or
revoked, without obligation or commitment of any kind, at any time prior to the
Company (or ▇▇▇▇ Capital on behalf of the Company) sending (orally, in writing
or by electronic mail) notice of its acceptance of such offer. An
indication of interest will involve no obligation or commitment of any kind
until the Purchaser has been delivered the Offering Information and this
Agreement is accepted and countersigned by or on behalf of the
Company.
-3-
|
Number
of Shares:
|
|
Purchase
Price Per Share: $
|
|
Aggregate
Purchase Price: $
|
Please
confirm that the foregoing correctly sets forth the agreement between us by
signing in the space provided below for that purpose.
|
Dated
as of: July __, 2009
|
|
|
PURCHASER
|
|
|
By:
|
|
Print Name:
|
|
Title:
|
|
Address:
|
|
Agreed
and Accepted
this ___
day of July __, 2009:
▇▇▇▇▇▇
TECHNOLOGIES, INC.
|
By:
|
|
|
Title:
|
-4-
ANNEX I
TERMS
AND CONDITIONS FOR PURCHASE OF SHARES
1. Authorization
and Sale of the Shares. Subject to the terms and conditions of
this Agreement, the Company has authorized the sale of the Shares.
2. Agreement
to Sell and Purchase the Shares; Placement Agent.
2.1 At
the Closing (as defined in Section 3.1),
the Company will sell to the Purchaser, and the Purchaser will purchase from the
Company, upon the terms and conditions set forth herein, the respective number
of Shares set forth on the last page of the Agreement to which these Terms and
Conditions for Purchase of Shares are attached as Annex I (the
“Signature
Page”) for the aggregate purchase price therefor set forth on the
Signature Page.
2.2 Purchaser
acknowledges that the Company has agreed to pay ▇▇▇▇ Capital Partners, LLC (the
“Placement
Agent” or “▇▇▇▇
Capital”) a fee (the “Placement Fee”) in
respect of the sale of Shares to the Purchaser.
2.3 The
Company has entered into a Placement Agent Agreement, dated July___,
2009 (the “Placement
Agreement”), with the Placement Agent that contains certain
representations, warranties, covenants and agreements of the Company that may be
relied upon by the Purchaser, which shall be a third party beneficiary
thereof. The Company confirms that neither it nor any other person
acting on its behalf has provided the Purchaser with any information that
constitutes or could reasonably be expected to constitute material, nonpublic
information, except as will be disclosed in the Prospectus and the Company’s
Form 8-K filed with the Commission in connection with the
Offering. The Company understands and confirms that the Purchaser
will rely on the foregoing representations in effecting transactions in
securities of the Company.
3. Closings
and Delivery of the Shares and Funds.
3.1 Closing. The
completion of the purchase and sale of the Shares (the “Closing”) shall occur
at a place and time (the “Closing Date”) to be
specified by the Company and the Placement Agent, and of which the Purchaser
will be notified in advance by the Placement Agent, in accordance with Rule
15c6-1 promulgated under the Securities Exchange Act of 1934, as amended (the
“Exchange
Act”). At the Closing, (a) the Company shall cause the
Transfer Agent to deliver to the Purchaser the number of Shares set forth on the
Signature Page registered in the name of the Purchaser or, if so indicated on
the Purchaser Questionnaire attached hereto as Exhibit A, in
the name of a nominee designated by the Purchaser and, (b) the aggregate
purchase price for the Shares being purchased by the Purchaser will be delivered
by or on behalf of the Purchaser to the Company.
3.2 Conditions
to the Company’s Obligations. The Company’s obligation to
issue and sell the Shares to the Purchaser shall be subject to: (i) the receipt
by the Company of the purchase price for the Shares being purchased hereunder as
set forth on the Signature Page and (ii) the accuracy of the representations and
warranties made by the Purchaser and the fulfillment of those undertakings of
the Purchaser to be fulfilled prior to the Closing Date.
I-1
3.3 Conditions
to the Purchaser’s Obligations. The Purchaser’s obligation to
purchase the Shares will be subject to the condition that the Placement Agent
shall not have: (a) terminated the Placement Agreement pursuant to the terms
thereof or (b) determined that the conditions to the closing in the Placement
Agreement have not been satisfied.
3.4 Delivery
of Funds. The Purchaser has elected to settle the Shares
purchased by such Purchaser by delivery versus payment through the Depository
Trust Company (“DTC”); no later than
one (1) business day after the execution of this Agreement by the Purchaser and
the Company, the Purchaser shall confirm that the account or accounts at ▇▇▇▇
Capital to be credited with the Shares being purchased by the Purchaser have a
minimum balance equal to the aggregate purchase price for the Shares being
purchased by the Purchaser.
3.5 Delivery
of Shares. The Purchaser has elected to settle the Shares
purchased by such Purchaser by delivery versus payment through DTC; no later
than one (1) business day after the execution of this Agreement by the Purchaser
and the Company, the Purchaser shall notify ▇▇▇▇ Capital of the account or
accounts at ▇▇▇▇ Capital to be credited with the Shares being purchased by such
Purchaser. On the Closing Date, the Company shall deliver the Shares
to the Purchaser through DTC directly to the account(s) at ▇▇▇▇ Capital
identified by the Purchaser and simultaneously therewith payment shall be made
by ▇▇▇▇ Capital by wire transfer to the Company.
4. Representations,
Warranties and Covenants of the Purchaser. The Purchaser
acknowledges, represents and warrants to, and agrees with, the Company and the
Placement Agent that:
4.1 The
Purchaser (a) is knowledgeable, sophisticated and experienced in making, and is
qualified to make decisions with respect to, investments in shares presenting an
investment decision like that involved in the purchase of the Shares, including
investments in securities issued by the Company and investments in comparable
companies, (b) has answered all questions on the Signature Page and the
Purchaser Questionnaire and the answers thereto are true and correct as of the
date hereof and will be true and correct as of the Closing Date and (c) in
connection with its decision to purchase the number of Shares set forth on the
Signature Page, has received and is relying solely upon (i) the Disclosure
Package and the documents incorporated by reference therein and (ii) the
Offering Information.
4.2 (a)
No action has been or will be taken in any jurisdiction outside the United
States by the Company or the Placement Agent that would permit an offering of
any of the Shares, or possession or distribution of offering materials in
connection with the issuance of the Shares in any jurisdiction outside the
United States where action for that purpose is required, (b) if the Purchaser is
outside the United States, it will comply with all applicable laws and
regulations in each foreign jurisdiction in which it purchases, offers, sells or
delivers Shares or has in its possession or distributes any offering material,
in all cases at its own expense and (c) the Placement Agent is not authorized to
make and has not made any representation, disclosure or use of any information
in connection with the issuance, placement, purchase and sale of the Shares,
except as set forth or incorporated by reference in the Base Prospectus or the
Prospectus Supplement.
I-2
4.3 (a)
The Purchaser has full right, power, authority and capacity to enter into this
Agreement and to consummate the transactions contemplated hereby and has taken
all necessary action to authorize the execution, delivery and performance of
this Agreement, and (b) this Agreement constitutes a valid and binding
obligation of the Purchaser enforceable against the Purchaser in accordance with
its terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting creditors’ and
contracting parties’ rights generally and except as enforceability may be
subject to general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law) and except as
to the enforceability of any rights to indemnification or contribution that may
be violative of the public policy underlying any law, rule or regulation
(including any federal or state securities law, rule or
regulation).
4.4 The
Purchaser understands that nothing in this Agreement, the Prospectus or any
other materials presented to the Purchaser in connection with the purchase and
sale of the Shares constitutes legal, tax or investment advice. The
Purchaser has consulted such legal, tax and investment advisors as it, in its
sole discretion, has deemed necessary or appropriate in connection with its
purchase of Shares.
4.5 Since
the time at which the Placement Agent first contacted the Purchaser about the
Offering, the Purchaser has not engaged in any purchases or sales of the
securities of the Company (including, without limitation, any Short Sales (as
defined herein) involving the Company’s securities), and has not violated its
obligations of confidentiality. The Purchaser covenants that it will
not engage in any purchases or sales of the securities of the Company (including
Short Sales) or disclose any information about the contemplated Offering (other
than to its advisors that are under a legal obligation of confidentiality) prior
to the time that the transactions contemplated by this Agreement are publicly
disclosed. The Purchaser agrees that it will not use any of the
Shares acquired pursuant to this Agreement to cover any short position in the
Common Stock if doing so would be in violation of applicable securities
laws. For purposes hereof, “Short Sales” include,
without limitation, all “short sales” as defined in Rule 200 promulgated under
Regulation SHO under the Exchange Act, whether or not against the box, and all
types of direct and indirect stock pledges, forward sales contracts, options,
puts, calls, short sales, swaps, “put equivalent positions” (as defined in Rule
16a-1(h) under the Exchange Act) and similar arrangements (including on a total
return basis), and sales and other transactions through non-US broker dealers or
foreign regulated brokers.
4.6 The
investment in the Shares is being made in the ordinary course of the Purchaser’s
business. In connection with the investment in the Shares, the
Purchaser is not acting as a market intermediary and the Purchaser has no
current understanding or arrangement for the distribution of the
Shares.
5. Survival
of Representations, Warranties and Agreements; Third Party
Beneficiary. Notwithstanding any investigation made by any
party to this Agreement or by the Placement Agent, all covenants, agreements,
representations and warranties made by the Company and the Purchaser herein will
survive the execution of this Agreement, the delivery to the Purchaser of the
Shares being purchased and the payment therefor. The Placement Agent
shall be a third party beneficiary with respect to the representations,
warranties and agreements of the Purchaser in Section 4
hereof.
I-3
6. Notices. All
notices, requests, consents and other communications hereunder will be in
writing, will be mailed (a) if within the domestic United States by first-class
registered or certified airmail, or nationally recognized overnight express
courier, postage prepaid, or by facsimile or (b) if delivered from outside the
United States, by International Federal Express or facsimile, and will be deemed
given (i) if delivered by first-class registered or certified mail domestic,
three business days after so mailed, (ii) if delivered by nationally recognized
overnight carrier, one business day after so mailed, (iii) if delivered by
International Federal Express, two business days after so mailed and (iv) if
delivered by facsimile, upon electric confirmation of receipt and will be
delivered and addressed as follows:
|
(a)
|
if
to the Company, to:
|
▇▇▇▇▇▇
Technologies, Inc.
|
|
▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
|
||
|
▇▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
|
||
|
Attention: ▇▇▇▇▇
▇▇▇▇▇▇
|
||
|
Facsimile:
(▇▇▇) ▇▇▇-▇▇▇▇
|
||
|
with
copies to:
|
Blank
Rome, LLP
|
|
|
▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
|
||
|
▇▇▇
▇▇▇▇, ▇▇ ▇▇▇▇▇
|
||
|
Attention: Ethan
Seer, Esq.
|
||
|
Facsimile: (▇▇▇)
▇▇▇-▇▇▇▇
|
(b) if
to the Purchaser, at its address on the Signature Page hereto, or at such other
address or addresses as may have been furnished to the Company in
writing.
7. Changes. This
Agreement may not be modified or amended except pursuant to an instrument in
writing signed by the Company and the Purchaser.
8. Headings. The
headings of the various sections of this Agreement have been inserted for
convenience of reference only and will not be deemed to be part of this
Agreement.
9. Severability. In
case any provision contained in this Agreement should be invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein will not in any way be affected or
impaired thereby.
10. Governing
Law. This Agreement will be governed by, and construed in
accordance with, the internal laws of the State of New York, without giving
effect to the principles of conflicts of law that would require the application
of the laws of any other jurisdiction.
11. Counterparts. This
Agreement may be executed in two or more counterparts, each of which will
constitute an original, but all of which, when taken together, will constitute
but one instrument, and will become effective when one or more counterparts have
been signed by each party hereto and delivered to the other
parties. The Company and the Purchaser acknowledge and agree that the
Company shall deliver its counterpart to the Purchaser along with the Prospectus
Supplement (or the filing by the Company of an electronic version thereof with
the Commission).
I-4
12. Confirmation
of Sale. The Purchaser acknowledges and agrees that the
Purchaser’s receipt of the Company’s counterpart to this Agreement, together
with the Prospectus Supplement (or the filing by the Company of an electronic
version thereof with the Commission), shall constitute written confirmation of
the Company’s sale of Shares to the Purchaser.
13. Press
Release. The Company and the Purchaser agree that the Company
shall issue a press release announcing the Offering and disclosing all material
terms and conditions of the Offering prior to the opening of the financial
markets in New York City on the business day immediately after the date
hereof.
14. Termination. In
the event that the Placement Agreement is terminated by the Placement Agent
pursuant to the terms thereof, this Agreement shall terminate without any
further action on the part of the parties hereto.
I-5
EXHIBIT
A
▇▇▇▇▇▇
TECHNOLOGIES, INC.
PURCHASER
QUESTIONNAIRE
Pursuant
to Section 3 of Annex I to the
Agreement, please provide us with the following information:
|
1.
|
The
exact name that your Shares are to be registered in. You may use a nominee
name if appropriate:
|
||
|
2.
|
The
relationship between the Purchaser and the registered holder listed in
response to item 1 above:
|
||
|
3.
|
The
mailing address of the registered holder listed in response to item 1
above:
|
||
|
4.
|
The
Social Security Number or Tax Identification Number of the registered
holder listed in the response to item 1 above:
|
||
|
5.
|
Name
of DTC Participant (broker-dealer at which the account or accounts to be
credited with the Shares are maintained):
|
||
|
6.
|
DTC
Participant Number:
|
||
|
7.
|
Name
of Account at DTC Participant being credited with the
Shares:
|
||
|
8.
|
Account
Number at DTC Participant being credited with the Shares:
|
A-1
EXHIBIT
B
FORM
OF PLACEMENT AGENT WARRANT
▇▇▇▇▇▇
TECHNOLOGIES, INC.
WARRANT
|
Warrant
No. [__]
|
Original
Issue Date: _____ __, 20091
|
▇▇▇▇▇▇
Technologies, Inc., a New York corporation (the “Company”), hereby
certifies that, as partial compensation for placement agent services, ▇▇▇▇
Capital Partners, LLC or its registered assigns (the “Holder”), is entitled
to purchase from the Company up to a total of [_______]2 shares
of Common Stock (each such share, a “Warrant Share” and
collectively, the “Warrant Shares”), at
any time and from time to time from and after the date that is six (6) months
after the Original Issue Date and through and including ______ __, 2014
(the “Expiration
Date”), and subject to the following terms and conditions:
1. Definitions. As
used in this Warrant, the following terms shall have the respective definitions
set forth in this Section 1.
“Affiliate” means any
Person that, directly or indirectly through one or more intermediaries, controls
or is controlled by or is under common control with a Person, as such terms are
used in and construed under Rule 144.
“Business Day” means
any day except Saturday, Sunday and any day which is a federal legal holiday or
a day on which banking institutions in the State of New York or State of
California are authorized or required by law or other governmental action to
close.
“Common Stock” means
the common stock of the Company, par value $0.01 per share, and any securities
into which such common stock may hereafter be reclassified.
“Exchange Act” means
the Securities Exchange Act of 1934, as amended.
“Exercise Price” means
$1.4375, subject to adjustment in accordance with Section 9.
“Fundamental
Transaction” means any of the following: (i) the Company effects any
merger or consolidation of the Company with or into another Person (other than a
merger or consolidation in which the Company is the surviving corporation and
there is no reclassification of the Common Stock), (ii) the Company effects any
sale of all or substantially all of its assets in one or a series of related
transactions, (iii) any tender offer or exchange offer by the Company
during the period in which this Warrant is not exercisable, is completed
pursuant to which holders of Common Stock are permitted to tender or exchange
their shares for other securities, cash or property, or (iv) the Company effects
any reclassification of the Common Stock or any compulsory share exchange
pursuant to which the Common Stock is effectively converted into or exchanged
for other securities, cash or property.
1 A
Closing Date (as defined in the Placement Agent Agreement).
2 5% of
the Shares issued on the applicable Closing Date (as defined in the Placement
Agent Agreement).
“New York Courts”
means the state courts sitting in the County of Rockland, State of New York and
the United District Court for the Southern District of New York.
“Original Issue Date”
means the Original Issue Date first set forth on the first page of this
Warrant.
“Person” means an
individual or corporation, partnership, trust, incorporated or unincorporated
association, joint venture, limited liability company, joint stock company,
government (or an agency or subdivision thereof) or other entity of any
kind.
“Rule 144” means Rule
144 promulgated by the Securities and Exchange Commission pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Securities and Exchange Commission
having substantially the same effect as such Rule.
“Securities Act” means
the Securities Act of 1933, as amended.
“Subsidiary” means any
“significant subsidiary” as defined in Rule 1-02(w) of the Regulation S-X
promulgated by the Securities and Exchange Commission under the Exchange
Act.
“Trading Day” means
(i) a day on which the Common Stock is traded on a Trading Market (other than
the OTC Bulletin Board), or (ii) if the Common Stock is not listed on a Trading
Market (other than the OTC Bulletin Board), a day on which the Common Stock is
traded in the over-the-counter market, as reported by the OTC Bulletin Board, or
(iii) if the Common Stock is not quoted on any Trading Market, a day on which
the Common Stock is quoted in the over-the-counter market as reported by the
Pink OTC Markets Inc. (or any similar organization or agency succeeding to its
functions of reporting prices); provided, that in the event that the Common
Stock is not listed or quoted as set forth in (i), (ii) and (iii) hereof, then
Trading Day shall mean a Business Day.
“Trading Market” means
whichever of the New York Stock Exchange, the American Stock Exchange, the
NASDAQ Global Select Market, the NASDAQ Global Market, the NASDAQ Capital Market
or OTC Bulletin Board on which the Common Stock is listed or quoted for trading
on the date in question.
2. Registration
of Warrant. The Company shall register this Warrant upon
records to be maintained by the Company for that purpose (the “Warrant Register”),
in the name of the record Holder hereof from time to time. The
Company may deem and treat the registered Holder of this Warrant as the absolute
owner hereof for the purpose of any exercise hereof or any distribution to the
Holder, and for all other purposes, absent actual notice to the
contrary.
-2-
3. Registration
of Transfers. The Company shall register the transfer of any
portion of this Warrant in the Warrant Register, upon surrender of this Warrant,
with the Form of Assignment attached hereto duly completed and signed, to the
Company at its address specified herein. Upon any such registration
or transfer, a new Warrant to purchase Common Stock, in substantially the form
of this Warrant (any such new Warrant, a “New Warrant”),
evidencing the portion of this Warrant so transferred shall be issued to the
transferee and a New Warrant evidencing the remaining portion of this Warrant
not so transferred, if any, shall be issued to the transferring Holder. The
acceptance of the New Warrant by the transferee thereof shall be deemed the
acceptance by such transferee of all of the rights and obligations of a holder
of a Warrant. Notwithstanding the foregoing, if deemed necessary by
the Company, as a condition of transferring any portion of this
Warrant, it shall have received from the proposed transferee such
information and documents as is reasonably necessary so that the portion of the
Warrant may be issued to the transferee in compliance with the Act and any
applicable state securities laws without registration or qualification
thereunder.
4. Exercise
and Duration of Warrants. This Warrant shall be exercisable by
the registered Holder at any time and from time to time after the date that is 6
months after the Original Issue Date through and including the Expiration
Date. At 5:00 p.m. California time on the Expiration Date, the
portion of this Warrant not exercised prior thereto shall be and become void and
of no value. The Company may not call or redeem any portion of this
Warrant without the prior written consent of the affected Holder.
5. Delivery
of Warrant Shares.
(a) To
effect exercises hereunder, the Holder shall not be required to physically
surrender this Warrant unless the aggregate Warrant Shares represented by this
Warrant is being exercised. Upon delivery of the Exercise Notice (in
the form attached hereto) to the Company (with the attached Warrant Shares
Exercise Log) at its address for notice set forth herein (or such other address
as the Company shall advise the Holder in writing) and upon payment of the
Exercise Price multiplied by the number of Warrant Shares that the Holder
intends to purchase hereunder, the Company shall promptly (but in no event later
than seven (7) Trading Days after the Date of Exercise (as defined herein))
issue and deliver to the Holder, a certificate for the Warrant Shares issuable
upon such exercise. The Company shall, upon request of the Holder and
subsequent to the date on which the Warrant Shares have been publicly sold
pursuant to an effective registration statement covering the resale of the
Warrant Shares or Rule 144, use its commercially reasonable efforts to deliver
Warrant Shares hereunder electronically through the Depository Trust Corporation
(“DTC”) or
another established clearing corporation performing similar functions, if
available, provided, that, the
Company may, but will not be required to change its transfer agent if its
current transfer agent cannot deliver the Warrant Shares electronically through
the DTC. A “Date of Exercise”
means the date on which the Holder shall have delivered to the Company: (i) the
Exercise Notice (with the Warrant Exercise Log attached to it), appropriately
completed and duly signed and (ii) if such Holder is not utilizing the cashless
exercise provisions set forth in this Warrant, payment of the Exercise Price for
the number of Warrant Shares so indicated by the Holder to be
purchased.
(b) If
by the seventh (7th)
Trading Day after a Date of Exercise the Company fails to deliver the required
number of Warrant Shares in the manner required pursuant to Section 5(a),
then the Holder will have the right to rescind such exercise.
-3-
(c) If
by the seventh (7th)
Trading Day after a Date of Exercise the Company fails to deliver the required
number of Warrant Shares in the manner required pursuant to Section 5(a),
and if after such third (3rd)
Trading Day and prior to the receipt of such Warrant Shares, the Holder
purchases (in an open market transaction or otherwise) shares of Common Stock to
deliver in satisfaction of a sale by the Holder of the Warrant Shares which the
Holder anticipated receiving upon such exercise (a “Buy-In”), then the
Company shall (1) pay in cash to the Holder the amount by which (x) the Holder’s
total purchase price (including brokerage commissions, if any) for the shares of
Common Stock so purchased exceeds (y) the amount obtained by multiplying (A) the
number of Warrant Shares that the Company was required to deliver to the Holder
in connection with the exercise at issue by (B) the closing bid price of the
Common Stock on the Date of Exercise and (2) at the option of the Holder, either
reinstate the portion of the Warrant and equivalent number of Warrant Shares for
which such exercise was not honored or deliver to the Holder the number of
shares of Common Stock that would have been issued had the Company timely
complied with its exercise and delivery obligations hereunder. The
Holder shall provide the Company written notice indicating the amounts payable
to the Holder in respect of the Buy-In.
(d) The
Company’s obligations to issue and deliver Warrant Shares in accordance with the
terms hereof are absolute and unconditional, irrespective of any action or
inaction by the Holder to enforce the same, any waiver or consent with respect
to any provision hereof, the recovery of any judgment against any Person or any
action to enforce the same, or any setoff, counterclaim, recoupment, limitation
or termination, or any breach or alleged breach by the Holder or any other
Person of any obligation to the Company or any violation or alleged violation of
law by the Holder or any other Person, and irrespective of any other
circumstance which might otherwise limit such obligation of the Company to the
Holder in connection with the issuance of Warrant Shares. Nothing
herein shall limit a Holder’s right to pursue any other remedies available to it
hereunder, at law or in equity including, without limitation, a decree of
specific performance and/or injunctive relief with respect to the Company’s
failure to timely deliver certificates representing Warrant Shares upon exercise
of the Warrant as required pursuant to the terms hereof.
6. Investment
Representation and Legend. Unless the offering and sale of
this Warrant by the Company to Holder is subject to an effective registration
statement under the Securities Act, the Holder, by acceptance of this Warrant,
represents and warrants to the Company that the holder is acquiring the Warrant
for its own account for investment purposes and not with a view toward the
distribution thereof. Unless the offering and sale of the Warrant
Shares to be issued upon the particular exercise of the Warrant shall have been
effectively registered under the Securities Act, the Company shall be under no
obligation to issue the Warrant Shares covered by such exercise unless and until
the Holder who exercises the Warrant shall provide the Company with
such information that it may reasonably request to satisfy itself that the
issuance of the Warrant Shares upon exercise of the Warrant complies with an
applicable federal and state securities laws, including, but not limited to, a
representation by such Holder to the Company, at the time of such exercise, that
such person or entity is acquiring such Warrant Shares for his or her or its own
account, for investment and not with a view to, or for sale in connection with,
the distribution of any such Warrant Shares, in which event the person acquiring
such Warrant Shares shall be bound by the provisions of a legend, substantially
as follows, which shall be endorsed upon the certificate(s) evidencing the
Warrant Shares issued pursuant to such exercise:
-4-
“The
shares represented by this certificate have not been registered under the
Securities Act of 1933, as amended (the “Securities Act”). Such
shares may not be sold, transferred or otherwise disposed of unless they have
first been registered under the Securities Act or, unless, in the opinion of
counsel satisfactory to the Company’s counsel, such registration is not
required.”
7. Charges,
Taxes and Expenses. Issuance and delivery of Warrant Shares
upon exercise of this Warrant shall be made without charge to the Holder for any
issue or transfer tax, transfer agent fee or other incidental tax or expense in
respect of the issuance of such certificates, all of which taxes and expenses
shall be paid by the Company; provided, however, that the
Company shall not be required to pay any tax which may be payable in respect of
any transfer involved in the registration of any certificates for Warrant Shares
or Warrants in a name other than that of the Holder. The Holder shall
be responsible for all other tax liability that may arise as a result of holding
or transferring this Warrant or receiving Warrant Shares upon exercise
hereof.
8. Replacement
of Warrant. If this Warrant is mutilated, lost, stolen or
destroyed, the Company shall issue or cause to be issued in exchange and
substitution for and upon cancellation hereof, or in lieu of and substitution
for this Warrant, a New Warrant, but only upon receipt of evidence reasonably
satisfactory to the Company of such loss, theft or destruction and customary and
reasonable indemnity (which shall not include a surety bond), if
requested. Applicants for a New Warrant under such circumstances
shall also comply with such other reasonable regulations and procedures and pay
such other reasonable third-party costs as the Company may
prescribe. If a New Warrant is requested as a result of a mutilation
of this Warrant, then the Holder shall deliver such mutilated Warrant to the
Company as a condition precedent to the Company’s obligation to issue the New
Warrant.
9. Reservation
of Warrant Shares. The Company covenants that it will at all
times reserve and keep available out of the aggregate of its authorized but
unissued and otherwise unreserved Common Stock, solely for the purpose of
enabling it to issue Warrant Shares upon exercise of this Warrant as herein
provided, the number of Warrant Shares which are then issuable and deliverable
upon the exercise of this entire Warrant, free from preemptive rights or any
other contingent purchase rights of Persons other than the Holder (taking into
account the adjustments and restrictions of Section 10). The
Company covenants that all Warrant Shares so issuable and deliverable shall,
upon issuance and the payment of the applicable Exercise Price in accordance
with the terms hereof, be duly and validly authorized, issued and fully paid and
nonassessable.
10. Certain
Adjustments. The Exercise Price and number of Warrant Shares
issuable upon exercise of this Warrant are subject to adjustment from time to
time as set forth in this Section 10.
-5-
(a) Stock
Dividends and Splits. If the Company, at any time while this
Warrant is outstanding, (i) pays a stock dividend on its Common Stock or
otherwise makes a distribution on any class of capital stock that is payable in
shares of Common Stock, (ii) subdivides outstanding shares of Common Stock into
a larger number of shares, or (iii) combines outstanding shares of Common Stock
into a smaller number of shares, then in each such case the Exercise Price shall
be multiplied by a fraction of which the numerator shall be the number of shares
of Common Stock outstanding immediately before such event and of which the
denominator shall be the number of shares of Common Stock outstanding
immediately after such event. Any adjustment made pursuant to clause
(i) of this paragraph shall become effective immediately after the record date
for the determination of stockholders entitled to receive such dividend or
distribution, and any adjustment pursuant to clause (ii) or (iii) of this
paragraph shall become effective immediately after the effective date of such
subdivision or combination.
(b) Fundamental
Transactions. If, at any time while this Warrant is
outstanding there is a Fundamental Transaction, then the Holder shall have the
right thereafter to receive, upon exercise of this Warrant, the same amount and
kind of securities, cash or property as it would have been entitled to receive
upon the occurrence of such Fundamental Transaction if it had been, immediately
prior to such Fundamental Transaction, the holder of the number of Warrant
Shares then issuable upon exercise in full of this Warrant (the “Alternate
Consideration”). If holders of Common Stock are given any
choice as to the securities, cash or property to be received in a Fundamental
Transaction, then the Holder shall be given the same choice as to the Alternate
Consideration it receives upon any exercise of this Warrant following such
Fundamental Transaction. At the Holder’s option and request, any
successor to the Company or surviving entity in such Fundamental Transaction (if
other than the Company) shall issue to the Holder a new warrant substantially in
the form of this Warrant and consistent with the foregoing provisions and
evidencing the Holder’s right to purchase the Alternate Consideration for the
aggregate Exercise Price upon exercise thereof. The terms of any
agreement pursuant to which a Fundamental Transaction is effected shall include
terms requiring any such successor or surviving entity to comply with the
provisions of this paragraph (b) and ensuring that the Warrant (or any such
replacement security) will be similarly adjusted upon any subsequent transaction
analogous to a Fundamental Transaction.
(c) Number of
Warrant Shares. Simultaneously with any adjustment to the
Exercise Price pursuant to this Section 10 the
number of Warrant Shares that may be purchased upon exercise of this Warrant
shall be increased or decreased proportionately, so that after such adjustment
the aggregate Exercise Price payable hereunder for the adjusted number of
Warrant Shares shall be the same as the aggregate Exercise Price in effect
immediately prior to such adjustment.
(d) Calculations. All
calculations under this Section 10 shall
be made to the nearest cent or the nearest 1/100th of a
share, as applicable. The number of shares of Common Stock
outstanding at any given time shall not include shares owned or held by or for
the account of the Company, and the disposition of any such shares shall be
considered an issue or sale of Common Stock.
-6-
(e) Notice of
Adjustments. Upon the occurrence of each adjustment pursuant
to this Section 10, the
Company at its expense will promptly compute such adjustment in accordance with
the terms of this Warrant and prepare a certificate setting forth such
adjustment, including a statement of the adjusted Exercise Price and adjusted
number or type of Warrant Shares or other securities issuable upon exercise of
this Warrant (as applicable), describing the transactions giving rise to such
adjustments and showing in detail the facts upon which such adjustment is
based. Upon written request, the Company will promptly deliver a copy
of each such certificate to the Holder and to the Company’s transfer
agent.
(f) Notice of
Corporate Events. If the Company (i) declares a dividend or
any other distribution of cash, securities or other property in respect of its
Common Stock, including without limitation any granting of rights or warrants to
subscribe for or purchase any capital stock of the Company or any Subsidiary,
(ii) authorizes or approves, enters into any agreement contemplating or solicits
stockholder approval for any Fundamental Transaction or (iii) authorizes the
voluntary dissolution, liquidation or winding up of the affairs of the Company,
then the Company shall deliver to the Holder a notice describing the material
terms and conditions of such transaction (but only to the extent such disclosure
would not result in the dissemination of material, non-public information to the
Holder) at least ten (10) calendar days prior to the applicable record or
effective date on which a Person would need to hold Common Stock in order to
participate in or vote with respect to such transaction, and the Company will
take all steps reasonably necessary in order to insure that the Holder is given
the practical opportunity to exercise this Warrant prior to such time so as to
participate in or vote with respect to such transaction; provided, however, that the
failure to deliver such notice or any defect therein shall not affect the
validity of the corporate action required to be described in such
notice.
11. Payment
of Exercise Price. The Holder may
pay the Exercise Price in one of the following manners:
(a) Cash
Exercise. The Holder may deliver immediately available funds;
or
(b) Cashless
Exercise. The Holder may notify the Company in an Exercise
Notice of its election to utilize cashless exercise, in which event the Company
shall issue to the Holder the number of Warrant Shares determined as
follows:
X = Y
[(A-B)/A]
where:
|
X
=
|
the
number of Warrant Shares to be issued to the
Holder.
|
|
|
Y
=
|
the
number of Warrant Shares with respect to which this Warrant is being
exercised.
|
|
|
A
=
|
the
average of the closing prices of the Common Stock for the five (5) Trading
Days immediately prior to (but not including) the Date of
Exercise.
|
|
|
B
=
|
the
Exercise Price.
|
-7-
For
purposes of Rule 144 promulgated under the Securities Act, it is intended that
the Warrant Shares issued in a cashless exercise transaction shall be deemed to
have been acquired by the Holder, and the holding period for the Warrant Shares
shall be deemed to have commenced, on the date this Warrant was originally
issued.
12. Limitations
on Exercise. Notwithstanding anything to the contrary
contained herein, the number of Warrant Shares that may be acquired by the
Holder upon any exercise of this Warrant (or otherwise in respect hereof) shall
be limited to the extent necessary to insure that, following such exercise (or
other issuance), the total number of shares of Common Stock then beneficially
owned by such Holder and its Affiliates and any other Persons whose beneficial
ownership of Common Stock would be aggregated with the Holder’s for purposes of
Section 13(d) of the Exchange Act, does not exceed 9.99% of the total
number of issued and outstanding shares of Common Stock (including for such
purpose the shares of Common Stock issuable upon such exercise). For
such purposes, beneficial ownership shall be determined in accordance with
Section 13(d) of the Exchange Act and the rules and regulations promulgated
thereunder. This provision shall not restrict the number of shares of
Common Stock which a Holder may receive or beneficially own in order to
determine the amount of securities or other consideration that such Holder may
receive in the event of a Fundamental Transaction as contemplated in Section 10 of
this Warrant. This restriction may not be
waived. Notwithstanding anything to the contrary contained in this
Warrant, (a) no term of this Section may be waived by any party, nor amended
such that the threshold percentage of ownership would be directly or indirectly
increased, (b) this restriction runs with the Warrant and may not be modified or
waived by any subsequent holder hereof and (c) any attempted waiver,
modification or amendment of this Section will be void ab initio.
13. No
Fractional Shares. No fractional shares of Warrant Shares will
be issued in connection with any exercise of this Warrant. In lieu of
any fractional shares which would, otherwise be issuable, the Company shall pay
cash equal to the product of such fraction multiplied by the closing price of
one Warrant Share as reported by the applicable Trading Market on the date of
exercise.
14. Notices. Any
and all notices or other communications or deliveries hereunder (including,
without limitation, any Exercise Notice) shall be in writing and shall be deemed
given and effective on the earliest of (i) the date of transmission, if such
notice or communication is delivered via facsimile at the facsimile number
specified in this Section prior to 5:00 p.m. (California time) on a Trading Day,
(ii) the next Trading Day after the date of transmission, if such notice or
communication is delivered via facsimile at the facsimile number specified in
this Section on a day that is not a Trading Day or later than 5:00 p.m.
(California time) on any Trading Day, (iii) the Trading Day following the date
of mailing, if sent by nationally recognized overnight courier service, or (iv)
upon actual receipt by the party to whom such notice is required to be
given. The addresses for such communications shall be: (i)
if to the Company, to ▇▇▇▇▇▇ Technologies, Inc., ▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attn: Chief Executive Officer, or
to facsimile no.: (▇▇▇) ▇▇▇-▇▇▇▇ (or such other address as the Company
shall indicate in writing in accordance with this Section), or (ii) if to the
Holder, to the address or facsimile number appearing on the Warrant Register or
such other address or facsimile number as the Holder may provide to the Company
in accordance with this Section.
-8-
15. Warrant
Agent. The Company shall serve as warrant agent under this
Warrant. Upon ten (10) days’ notice to the Holder, the Company may
appoint a new warrant agent. Any corporation into which the Company
or any new warrant agent may be merged or any corporation resulting from any
consolidation to which the Company or any new warrant agent shall be a party or
any corporation to which the Company or any new warrant agent transfers
substantially all of its corporate trust or shareholders services business shall
be a successor warrant agent under this Warrant without any further
act. Any such successor warrant agent shall promptly cause notice of
its succession as warrant agent to be mailed (by first class mail, postage
prepaid) to the Holder at the Holder’s last address as shown on the Warrant
Register.
16. Miscellaneous.
(a) This
Warrant shall be binding on and inure to the benefit of the parties hereto and
their respective successors and assigns. Subject to the preceding
sentence, nothing in this Warrant shall be construed to give to any Person other
than the Company and the Holder any legal or equitable right, remedy or cause of
action under this Warrant. This Warrant may be amended only in
writing signed by the Company and the Holder and their successors and
assigns. The foregoing sentence shall be subject to the restrictions
on waivers and amendments set forth in Section 12 of
this Warrant.
(b) All
questions concerning the construction, validity, enforcement and interpretation
of this Warrant shall be governed by and construed and enforced in accordance
with the internal laws of the State of New York, without regard to the
principles of conflicts of law thereof. Each party agrees that all
legal proceedings concerning the interpretations, enforcement and defense of
this Warrant and the transactions herein contemplated (“Proceedings”)
(whether brought against a party hereto or its respective Affiliates, employees
or agents) shall be commenced exclusively in the New York
Courts. Each party hereto hereby irrevocably submits to the exclusive
jurisdiction of the New York Courts for the adjudication of any dispute
hereunder or in connection herewith or with any transaction contemplated hereby
or discussed herein, and hereby irrevocably waives, and agrees not to assert in
any Proceeding, any claim that it is not personally subject to the jurisdiction
of any New York Court, or that such Proceeding has been commenced in an improper
or inconvenient forum. Each party hereto hereby irrevocably waives personal
service of process and consents to process being served in any such Proceeding
by mailing a copy thereof via registered or certified mail or overnight delivery
(with evidence of delivery) to such party at the address in effect for notices
to it under this Warrant and agrees that such service shall constitute good and
sufficient service of process and notice thereof. Nothing contained
herein shall be deemed to limit in any way any right to serve process in any
manner permitted by law. If either party shall commence a Proceeding
to enforce any provisions of this Warrant, then the prevailing party in such
Proceeding shall be reimbursed by the other party for its attorney’s fees and
other costs and expenses incurred with the investigation, preparation and
prosecution of such Proceeding.
-9-
(c) The
headings herein are for convenience only, do not constitute a part of this
Warrant and shall not be deemed to limit or affect any of the provisions
hereof.
(d) In
case any one or more of the provisions of this Warrant shall be invalid or
unenforceable in any respect, the validity and enforceability of the remaining
terms and provisions of this Warrant shall not in any way be affected or
impaired thereby and the parties will attempt in good faith to agree upon a
valid and enforceable provision which shall be a commercially reasonable
substitute therefor, and upon so agreeing, shall incorporate such substitute
provision in this Warrant.
(e) The
Holder is not entitled to any registration rights, except for the right of the
Placement Agent to require the Company to include this Warrant, the exercise of
this Warrant and the Warrant Shares in the Prospectus (as defined in the
Placement Agent Agreement, dated as of July 31, 2009, by and between ▇▇▇▇
Capital Partners, LLC and the Company).
(f) In
accordance with Rule 5110(g) of the FINRA Rules, this Warrant and the Warrant
Shares shall not be shall not be sold during the Offering (as defined in the
Placement Agent Agreement, dated as of July 31, 2009, by and between ▇▇▇▇
Capital Partners, LLC and the Company), or sold, transferred, assigned, pledged,
or hypothecated, or be the subject of any hedging, short sale, derivative, put,
or call transaction that would result in the effective economic disposition of
the securities by any person for a period of 180 days immediately following the
Original Issue Date.
(g) Prior
to exercise of this Warrant, the Holder hereof shall not, by reason of being a
Holder, be entitled to any rights of a stockholder with respect to the Warrant
Shares.
[SIGNATURE
PAGE FOLLOWS]
-10-
IN
WITNESS WHEREOF, the Company has caused this Warrant to be duly executed by its
authorized officer as of the date first indicated above.
|
▇▇▇▇▇▇
TECHNOLOGIES, INC.
|
|
|
By:
|
|
|
Name:
|
|
|
Title:
|
|
-11-
EXERCISE
NOTICE
▇▇▇▇▇▇
TECHNOLOGIES, INC.
WARRANT
DATED ___________ ___, 2009
The
undersigned Holder hereby irrevocably elects to
purchase _____________ shares of Common Stock pursuant to the above
referenced Warrant. Capitalized terms used herein and not otherwise
defined have the respective meanings set forth in the Warrant.
|
(1)
|
The
undersigned Holder hereby exercises its right to purchase
_________________ Warrant Shares pursuant to the
Warrant.
|
|
(2)
|
The
Holder intends that payment of the Exercise Price shall be made as (check
one):
|
|
|
¨
|
“Cash
Exercise” under Section 11
|
|
|
¨
|
“Cashless
Exercise” under Section 11
|
|
(3)
|
If
the holder has elected a Cash Exercise, the holder shall pay the sum of
$____________ to the Company in accordance with the terms of the
Warrant.
|
|
(4)
|
Pursuant
to this Exercise Notice, the Company shall deliver to the holder
_______________ Warrant Shares in accordance with the terms of the
Warrant.
|
|
(5)
|
By
its delivery of this Exercise Notice, the undersigned represents and
warrants to the Company that in giving effect to the exercise evidenced
hereby the Holder will not beneficially own in excess of the number of
shares of Common Stock (determined in accordance with Section 13(d)
of the Securities Exchange Act of 1934) permitted to be owned under Section 12
of this Warrant to which this notice
relates.
|
|
Dated:
___________, ____
|
Name
of Holder:
|
||
|
(Print)
|
|||
|
By:
|
|||
|
Name:
|
|||
|
Title:
|
|||
|
(Signature
must conform in all respects to name of
holder
as specified on the fact of the
Warrant)
|
|||
-12-
WARRANT
SHARES EXERCISE LOG
|
Date
|
Number
of Warrant
Shares
Available
to
be Exercised
|
Number
of Warrant
Shares
Exercised
|
Number
of Warrant
Shares
Remaining
to
be Exercised
|
||||
-13-
▇▇▇▇▇▇
TECHNOLOGIES, INC.
WARRANT
DATED ______ __, 2009
WARRANT
NO. [__]
FORM
OF ASSIGNMENT
[To be
completed and signed only upon transfer of Warrant]
FOR VALUE
RECEIVED, the undersigned hereby sells, assigns and transfers unto
________________ ________________ the right represented by the above-captioned
Warrant to purchase ____________ shares of Common Stock to which such
Warrant relates and appoints ________________ attorney to transfer said right on
the books of the Company with full power of substitution in the
premises.
Dated: _______________,
____
_______________________________________
(Signature
must conform in all respects to name of
holder as
specified on the face of the Warrant)
_______________________________________
Address
of Transferee
_______________________________________
_______________________________________
In the
presence of:
__________________________
-14-
EXHIBIT
C
FORM
OF LOCK UP AGREEMENT
Lock
Up Agreement
July 31,
2009
▇▇▇▇
Capital Partners, LLC
▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Re: ▇▇▇▇▇▇ Technologies, Inc. -
Public Offering of Common Stock
Dear
Sirs:
In order
to induce ▇▇▇▇ Capital Partners, LLC (“▇▇▇▇ Capital”), to
enter in to a certain placement agent agreement with ▇▇▇▇▇▇ Technologies, Inc.,
a New York corporation (the “Company”), with
respect to the public offering (the “Offering”) of the
Company’s common stock, par value $0.01 per share (“Common Stock”), the
undersigned hereby agrees that for a period (the “lock-up period”) of
ninety (90) days following the date of this letter agreement, the undersigned
will not, without the prior written consent of ▇▇▇▇ Capital, directly or
indirectly, (i) offer, sell, assign, transfer, pledge, contract to sell, or
otherwise dispose of, any shares of Common Stock or securities convertible into
or exercisable or exchangeable for Common Stock (including, without limitation,
shares of Common Stock or any such securities which may be deemed to be
beneficially owned by the undersigned in accordance with the rules and
regulations promulgated under the Securities Act of 1933, as the same may be
amended or supplemented from time to time (such shares or securities, the “Beneficially Owned
Shares”)), (ii) enter into any swap, hedge or other agreement or
arrangement that transfers in whole or in part, the economic risk of ownership
of any Beneficially Owned Shares, Common Stock or securities convertible into or
exercisable or exchangeable for Common Stock (collectively, the “Lock-Up Securities”),
or (iii) engage in any short selling of any Lock-Up Securities.
Anything
contained herein to the contrary notwithstanding, any person to whom Lock-Up
Securities are transferred from the undersigned shall be bound by the
terms of this Agreement.
In
addition, the undersigned hereby waives, from the date hereof until the
expiration of the ninety (90) day period following the date of the Company’s
final prospectus, any and all (i) rights, if any, to request or demand
registration pursuant to the Securities Act of 1933, as amended, of any shares
of Common Stock or securities convertible into or exercisable or exchangeable
for Common Stock that are registered in the name of the undersigned or that are
Beneficially Owned Shares and (ii) preemptive rights or other rights to
subscribe for shares of Common Stock from the Company. In order to
enable the aforesaid covenants to be enforced, the undersigned hereby consents
to the placing of legends and/or stop transfer orders with the transfer agent of
the Common Stock with respect to Lock-Up Securities.
Notwithstanding
anything to the contrary contained herein, in the event that the
Offering is not consummated within 30 days of the date of this
Agreement, then the terms of this Agreement shall be of no further force and
effect.
[Signatory]
|
By:
|
|
|
Name:
|
|
|
Title:
|
2
EXHIBIT
D
FORM
OF OPINION OF ISSUER’S COUNSEL1
1. Each
of the Company and its subsidiaries listed on Schedule A
hereto (collectively, the “Subsidiaries”) hereto is a corporation existing and
in good standing under the laws of its respective jurisdiction of
organization. Each of the Company and the Subsidiaries has all
requisite corporate or other organizational power and authority to own its
respective properties and to conduct its respective business as it is currently
being conducted as described in the Prospectus.
2. Each
of the Company and the Subsidiaries is duly qualified to do business and is in
good standing as foreign corporation or other foreign legal entity in the states
listed on Schedule A
hereto.
3. The
Company has all requisite corporate power and authority to execute, deliver, and
perform its obligations under the Subscription Agreement, the Placement Agent
Agreement and the Placement Agent Warrants.
4. The
Company has an authorized equity capitalization as set forth under the
captions “Description of Common Stock” and “Description of Preferred
Stock” in the Base Prospectus.
5. The
execution, delivery and performance of each of the Placement Agent Agreement,
the Subscription Agreement and the Placement Agent Warrants has been authorized
by all necessary corporate action of the Company. Each of the Placement Agent
Agreement, the Subscription Agreement and the Placement Agent Warrants has been
duly executed and delivered by the Company.
6. The
Shares have been authorized by all necessary corporate action of the Company
and, when issued and delivered to the Purchasers pursuant to the Placement Agent
Agreement and the Subscription Agreement against payment of the consideration
therefor as provided therein, will be validly issued, fully paid and
nonassessable.
7. The
Placement Agent Warrant Shares initially issuable upon exercise of
the Placement Agent Warrants pursuant to the terms thereof have been
authorized by all necessary corporate action of the Company and, when issued
upon exercise of the Placement Agent Warrants in accordance with their terms
against payment of the consideration therefor as provided therein, will be
validly issued, fully paid and nonassessable.
1 Subject to normal and customary qualifications and assumptions.
8. The
execution, delivery and performance by the Company of its obligations under each
of the Placement Agent Agreement, the Subscription Agreement and the Placement
Agent Warrants on the date hereof in accordance with their respective terms, the
issuance of the Shares, and the Placement Agent Warrants on the date hereof in
accordance with the terms of the Placement Agent Agreement and the Subscription
Agreement (with respect to the Shares) and the issuance of the Placement Agent
Warrant Shares in accordance with their respective terms do not: (i) violate any
provision of the Company’s Certificate of Incorporation or Bylaws, as each are
currently in effect; (ii) constitute a default by the Company under any of the
Company’s agreements listed on Schedule B hereto (except for such default that
would not have a Material Adverse Effect), or (iii) violate any Applicable Law
(this opinion being limited in that we express no opinion with respect to any
violation (a) not readily ascertainable from the face of any judgment, writ,
decree, order or agreement or (b) arising as a result of any violation of any
agreement or covenant by failure to comply with any financial or numerical
requirement requiring computation).
No
opinion will be given as to whether the Company’s agreements listed on Schedule
B are the only agreements material to the Company. “Applicable Law” shall
be defined as all United Stated federal securities laws and the laws of the
State of New York which an attorney using prudent judgment would expect to be
applicable to transactions of the type contemplated by the Placement Agent
Agreement.
9. No
consent, approval, authorization or order of, or filing with, any governmental
agency or body or any court that is normally applicable to the transactions of
the type contemplated by the Placement Agent Agreement is required under
Applicable Law in connection with the execution, delivery or performance of the
Placement Agent Agreement, the Subscription Agreement or the Placement Agent
Warrants by the Company, or in connection with the issuance or sale of the
Shares by the Company to the Purchasers or the issuance of the Placement Agent
Warrants by the Company to the Placement Agent, except (i) for the registration
of the Shares, Placement Agent Warrant and Placement Agent Warrant Shares under
the Securities Act of 1933, as amended (the “Securities Act”), and the rules and
regulations thereunder, (ii) periodic and other reporting requirements under the
Securities Exchange Act of 1934 and the rules and regulations thereunder or
(iii) as may be required under state securities or “blue sky” laws or under the
bylaws, rules and regulations of FINRA (in each case, as which we express no
opinion) .
10. Based
solely on certificates as to factual matters from officers of the Company, the
Company is not required to register as an “investment company,” as such term is
defined in the Investment Company Act of 1940, as amended.
We have
participated in the preparation of the Registration Statement and
the Prospectus. From time to time, we have had discussions with
certain officers, directors and employees of the Company, with representatives
of BDO ▇▇▇▇▇▇▇ LLP, the independent registered public accounting firm that
examined the financial statements of the Company included or incorporated by
reference in the Registration Statement and the Prospectus, with the Placement
Agent and with counsel to the Placement Agent concerning the information
contained in or incorporated by reference in the Registration Statement and the
Prospectus. Based solely upon our participation and discussions described above,
we are of the view that the Registration Statement (including all information
deemed to be part of and included therein pursuant to Rule 430B under the
Securities Act), as of the date it became effective and the Prospectus, as of
its date, complied as to form in all material respects to the requirements of
the Securities Act and the rules and regulations of the Commission thereunder,
except that we express no opinion with respect to (i) the financial statements,
financial schedules and other financial data included or incorporated by
reference therein or omitted there from or (ii) the information referred to
under the caption “Experts” as having been included or incorporated by reference
therein on the authority of BDO ▇▇▇▇▇▇▇ LLP as experts.
-2-
We have
acted as counsel to the Company in connection with the preparation of the
Registration Statement and, although we have not undertaken to determine
independently, and are not passing upon and do not assume any responsibility for
the adequacy, accuracy, completeness or fairness of the statements contained in
the Registration Statement or Prospectus, nothing has come to our attention that
would lead us to believe that the Registration Statement or any amendment
thereto (except for financial statements and schedules and other financial data
included or incorporated by reference therein or omitted therefrom, as to which
we make no statement), at the time such Registration Statement or any such
amendment became effective, contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary to
make the statements therein not misleading or that the Prospectus or any
amendment or supplement thereto (except for financial statements and schedules
and other financial data included or incorporated by reference therein or
omitted therefrom, as to which we make no statement), at the time the Prospectus
was issued, at the time any such amended or supplemented prospectus was issued
or at the Closing Time, included or includes an untrue statement of a material
fact or omitted or omits to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading. In addition, nothing has come to our attention
that would lead us to believe that the General Disclosure Package, other than
the financial statements and schedules and other financial data included or
incorporated by reference therein or omitted therefrom, as to which we make no
statement, as of the Applicable Time, contained 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. With respect to statements contained in the
General Disclosure Package, any statement contained in any of the constituent
documents shall be deemed to be modified or superseded to the extent that any
information contained in subsequent constituent documents modifies or replaces
such statement.
The
Registration Statement has become effective under the Securities Act, and, to
our knowledge, no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose are pending or
threatened by the Commission.
-3-