18,000,000 Shares of Common Stock PROCERA NETWORKS, INC. Common Stock (par value $0.001) PLACEMENT AGENT AGREEMENT
Exhibit
1.1
18,000,000
Shares of Common Stock
PROCERA
NETWORKS, INC.
Common
Stock (par value $0.001)
March 1,
2010
▇▇▇▇▇▇▇▇
CURHAN FORD & CO.
▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇▇
▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Dear
Sirs:
1.
Introduction. Procera
Networks, Inc., a Nevada 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 (the “Subscription
Agreements”) entered into with the purchasers identified therein (each a
“Purchaser”
and, collectively, the “Purchasers”), up to
an aggregate of 18,000,000 shares of common stock (a “Share” and,
collectively, the “Shares”), $0.001 par
value per share (the “Common Stock”), of
the Company. The Company hereby confirms that ▇▇▇▇▇▇▇▇ Curhan Ford
& Co. (the “Placement Agent”)
acted as the Placement Agent in accordance with the terms and conditions
hereof.
2.
Agreement
to Act as Placement Agent; Placement of Shares. On the basis
of the representations, warranties and agreements of the Company herein
contained, and subject to all the terms and conditions of this
Agreement:
2.1
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 earlier of the termination of this Agreement or the Closing 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 Shares otherwise
than through the Placement Agent.
2.2
The Company hereby acknowledges that the Placement Agent, as agent
of the Company, used its 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 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 acted solely as the Company’s agent and not as
principal. Notwithstanding the foregoing and except as otherwise
provided in Section 2.3, 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 from the Company as principal and any such purchases by
the Placement Agent (or its affiliates) shall be disclosed to the Company
(including the identity of such purchaser).
2.3
Subject to the provisions of this Section 2, 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 in its absolute
discretion to accept offers to purchase the Shares and to reject any such offer,
in whole or in part. The Placement Agent has the right, in its
discretion reasonably exercised, subject to giving prior 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.
2.4
The Shares are being sold to the Purchasers at a
price of $0.40 per Share. The purchases of the Shares by the
Purchasers shall be evidenced by the execution of the Subscription Agreements by
the parties thereto.
2.5
As compensation for services rendered, on
the Closing Date, the Company shall (i) 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 (the “Placement Fee”) equal
to seven percent (7%) of the gross proceeds received by the Company from the
sale of the Shares on such Closing Date and (ii) issue to the Placement Agent
warrants to purchase a number of shares of Common Stock equal to one percent
(1%) of the number of Shares purchased in the Offering (the “Placement
Warrants”). The Placement Warrants shall have a term of three
(3) years and be immediately exercisable at a price of $0.40 per
Share. The Placement Agent agrees that it will not: (a) sell,
transfer, assign, pledge or hypothecate the Placement Warrants or the shares
issuable upon their exercise for a period of one hundred eighty (180) days
following the date hereof to anyone other than: (i) an underwriter or a selected
dealer participating in the Offering, or (ii) a bona fide officer of any such
underwriter or selected dealer, in each case in accordance with FINRA Rule
5110(g)(1), provided that such underwriters, dealers or officers shall be
similarly restricted from selling, transferring, assigning, pledging or
hypothecating or (b) cause the Placement Warrants or the securities issuable
hereunder to be the subject of any hedging, short sale, derivative, put or call
transaction that would result in the effective economic disposition of the
Placement Warrants or the securities hereunder, except as provided for in FINRA
Rule 5110(g)(2).
2.6
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
the Shares to a Purchaser with whom it has entered into a binding Subscription
Agreement, 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(c) herein.
3.
Representations and
Warranties of the Company. The Company represents and warrants
to, and agrees with, the Placement Agent and the Purchasers that:
(a)
The Company has prepared and filed in
conformity with the requirements of the Securities Act of 1933, as amended (the
“Securities
Act”), and published rules and regulations thereunder (the “Rules and
Regulations”) adopted by the Securities and Exchange Commission (the
“Commission”) a
“shelf” Registration Statement (as hereinafter defined) on Form S-3 (File No.
333-164314), which became effective as of February 9, 2010 (the “Effective Date”),
including a base prospectus relating to the Shares (the “Base Prospectus”),
and such amendments and supplements thereto as may have been required to the
date of this Agreement. The term “Registration
Statement” as used in this Agreement means the registration statement
(including all exhibits, financial schedules and all documents and information
deemed to be a part of the Registration Statement pursuant to Rule 430A of the
Rules and Regulations), as amended and/or supplemented to the date of this
Agreement, including the Base Prospectus. The Registration Statement
is effective under the Securities Act and no stop order preventing or suspending
the effectiveness of the Registration Statement or suspending or preventing the
use of the Prospectus has been issued by the Commission and no proceedings for
that purpose have been instituted or, to the knowledge of the Company, are
threatened by the Commission. The Company, if required by the Rules
and Regulations of the Commission, will file the Prospectus (as defined below),
with the Commission pursuant to Rule 424(b) of the Rules and
Regulations. The term “Prospectus” as used
in this Agreement means the prospectus, in the form in which it is to be filed
with the Commission pursuant to Rule 424(b) of the Rules and Regulations, or, if
the prospectus is not to be filed with the Commission pursuant to Rule 424(b),
the prospectus in the form included as part of the Registration Statement as of
the Effective Date, except that if any revised prospectus or prospectus
supplement shall be provided to the Placement Agent by the Company for use in
connection with the offering and sale of the Shares which differs from the
Prospectus (whether or not such revised prospectus or prospectus supplement is
required to be filed by the Company pursuant to Rule 424(b) of the Rules and
Regulations), the term “Prospectus” shall refer to such revised prospectus or
prospectus supplement, as the case may be, from and after the time it is first
provided to the Placement Agent for such use. Any preliminary
prospectus or prospectus subject to completion included in the Registration
Statement or filed with the Commission pursuant to Rule 424 of the Rules and
Regulations is hereafter called a “Preliminary
Prospectus.” Any reference herein to the Registration
Statement, any Preliminary Prospectus or the Prospectus shall be deemed to refer
to and include the documents incorporated by reference therein pursuant to Item
12 of Form S-3 which were filed under the Securities Exchange Act of 1934, as
amended (the “Exchange
Act”), on or before the last to occur of the Effective Date, the date of
the Preliminary Prospectus, or the date of the Prospectus, and any reference
herein to the terms “amend,” “amendment,” or “supplement” with respect to the
Registration Statement, any Preliminary Prospectus or the Prospectus shall be
deemed to refer to and include (i) the filing of any document under the Exchange
Act after the Effective Date, the date of such Preliminary Prospectus or the
date of the Prospectus, as the case may be, which is incorporated by reference
and (ii) any such document so filed. If the Company has filed an
abbreviated registration statement to register additional securities pursuant to
Rule 462(b) under the Rules and Regulations (the “462(b) Registration
Statement”), then any reference herein to the Registration Statement
shall also be deemed to include such 462(b) Registration
Statement.
2
(b)
The conditions to the use of Form S-3 in connection with
the offering and sale of the Shares as contemplated hereby have been
satisfied. The Registration Statement meets, and the offering and
sale of the Shares as contemplated hereby complies with, the requirements of
Rule 415 under the Securities Act (including, without limitation, Rule 415(a)(4)
and (a)(5) of the Rules and Regulations).
(c)
As of the Applicable Time (as defined below) and as of the
Closing Date, neither (i) any General Use Free Writing Prospectus (as defined
below) issued at or prior to the Applicable Time, and the Pricing Prospectus (as
defined below) and the information included on Schedule A hereto,
all considered together (collectively, the “General Disclosure
Package”), (ii) any individual Limited Use Free Writing Prospectus (as
defined below) issued at or prior to the Applicable Time nor (iii) the bona fide
electronic road show (as defined in Rule 433(h)(5) of the Rules and
Regulations), if any, 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 as of the
Closing Date 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 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
hereof). As used in this paragraph (c) and elsewhere in this
Agreement:
3
“Applicable Time”
means 5:00 P.M., New York time, on the date of this Agreement.
“General Use Free Writing
Prospectus” means any Issuer Free Writing Prospectus that is identified
on Schedule A
to this Agreement.
“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.
“Limited Use Free Writing
Prospectuses” means any Issuer Free Writing Prospectus that is not a
General Use Free Writing Prospectus.
“Pricing Prospectus”
means the Preliminary Prospectus, if any, and the Base Prospectus, each 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.
(d)
No order preventing or suspending the use of
any Preliminary Prospectus, 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, to the knowledge of the Company, threatened by the Commission,
and each Preliminary Prospectus (if any), at the time of filing thereof,
conformed in all material respects to the requirements of the Securities Act and
the Rules and Regulations, and did not contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein, in 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 any
Preliminary 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.
(e)
At the time the Registration Statement became effective, at
the date of this Agreement and at the Closing Date, the Registration Statement
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; the Prospectus, at the time the Prospectus was issued and at the
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 (e) shall
not apply to information contained in or omitted from the Registration Statement
or the 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.
(f)
Each Issuer Free Writing Prospectus, if any, as of its
issue date and at all subsequent times through the completion of the public
offer and sale of the Shares or until any earlier date that the Company notified
or notifies the Placement Agent as described in Section 5(e), 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 includes 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 under which they were made, 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 the Placement Agent specifically for
inclusion therein, which information the parties hereto agree is limited to the
Placement Agent’s Information.
4
(g)
The documents incorporated by reference in the Prospectus,
when they became effective or were filed with the Commission, as the case may
be, conformed in all material respects to the requirements of the Securities Act
or the Exchange Act, as applicable, 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, in light of the
circumstances under which they were made, not misleading; and any further
documents so filed and incorporated by reference in the Prospectus, when such
documents become effective or are filed with the Commission, as the case may be,
will conform in all material respects to the requirements of the Securities Act
or the Exchange Act, as applicable, 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, in light of the circumstances under
which they were made, not misleading.
(h)
The Company has not, directly or indirectly,
distributed and will not distribute any offering material in connection with the
Offering other than any Preliminary Prospectus, the Prospectus and other
materials, if any, permitted under the Securities Act and consistent with
Section 5(b) below. The Company is not an “ineligible issuer” in
connection with the offering pursuant to Rules 164, 405 and 433 under the
Securities Act. The Company will file with the Commission all Issuer
Free Writing Prospectuses (other than a “road show,” as defined 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.
(i)
The Company and each of its subsidiaries (as
defined in Section 15 hereof) have been duly organized and are validly existing
as corporations 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 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 (i) would not 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 (ii) 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 (i) or (ii), a “Material Adverse
Effect”).
(j)
The Company has the full right, power and
authority to enter into this Agreement, each of the Subscription Agreements and
that certain Escrow Agreement (the “Escrow Agreement”)
dated as of the date hereof by and among the Company, the Placement Agent and
the escrow agent named therein, and to perform and to discharge its obligations
hereunder and thereunder; and each of this Agreement, the Escrow Agreement and
each of the Subscription Agreements 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 as enforceability may
be limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting creditors’ 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).
5
(k)
The Shares to be issued and sold by the Company to the Purchasers
under the Subscription Agreements have been duly and validly authorized and,
when issued and delivered against payment therefor as provided herein and in the
Subscription Agreements, 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.
(l)
The Company has an authorized capitalization as set forth in
the General Disclosure Package and the Prospectus, and all of the issued and
outstanding 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 federal and state securities laws, and conform to the
description thereof contained in the General Disclosure Package and the
Prospectus. As of February 23, 2010, there were 94,082,724 shares of
Common Stock issued and outstanding and no shares of Preferred Stock, par value
$0.001, of the Company issued and outstanding. As of February 23,
2010, 13,240,745 shares of Common Stock were issuable upon the exercise of all
options, warrants and convertible securities outstanding as of such
date. Since February 23, 2010, 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. 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
U.S. 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, except for such rights as may have been fully satisfied or
waived. 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 and any 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.
(m) 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 or 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.
(n) The
execution, delivery and performance of this Agreement, the Subscription
Agreements and the Escrow Agreement 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 (A) the charter or by-laws (or analogous governing instruments, as
applicable) of the Company or any of its subsidiaries or (B) 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, except, with respect to
clause (B), any violation which, singularly or in the aggregate, would not have
a Material Adverse Effect. 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.
6
(o)
Except for the registration of the Shares under the Securities
Act and such consents, approvals, authorizations, registrations or
qualifications as may be required under the Exchange Act and applicable state or
foreign securities laws, the Financial Industry Regulatory Authority (“FINRA”) and the NYSE
Amex Exchange (“Amex”) in connection
with the offering and sale of the Shares by the Company, no consent, approval,
authorization or order of, or filing, qualification or registration with, any
court or governmental agency or body, foreign or domestic, which has not been
made, obtained or taken and is not in full force and effect, is required for the
execution, delivery and performance of this Agreement, the Subscription
Agreements and the Escrow Agreement by the Company, the offer or sale of the
Shares or the consummation of the transactions contemplated hereby or
thereby.
(p)
PMB ▇▇▇▇▇ ▇▇▇▇▇▇▇, LLP, who has audited certain
financial statements and related schedules included or incorporated by reference
in the Registration Statement, the General Disclosure Package and the
Prospectus, and has audited the Company’s internal control over financial
reporting and management’s assessment thereof, is an independent registered
public accounting firm as required by the Securities Act and the Rules and
Regulations and the Public Company Accounting Oversight Board (United States)
(the “PCAOB”). Except
as pre-approved in accordance with the requirements set forth in Section 10A of
the Exchange Act, PMB ▇▇▇▇▇ ▇▇▇▇▇▇▇, LLP has not been engaged by the Company to
perform any “prohibited activities” (as defined in Section 10A of the Exchange
Act).
(q)
The financial statements, together with the related notes and
schedules, included or incorporated by reference in the General Disclosure
Package, the Prospectus and in the 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, and except that unaudited financial statements may not
contain footnotes or year-end adjustments required by GAAP. The
financial statements, together with the related notes and schedules, included or
incorporated by reference in the General Disclosure Package and the Prospectus
comply in all material respects with the Securities Act, the Exchange Act, and
the Rules and Regulations and the rules and regulations under the Exchange
Act. No other financial statements or supporting schedules or
exhibits are required by the Securities Act or the Rules and Regulations 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, or the
Prospectus or a document incorporated by reference therein in accordance with
the Securities Act and the Rules and Regulations which has not been included or
incorporated as so required.
7
(r)
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 such date, there has
not been any change in the capital stock (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 long-term debt of the Company or any of its
subsidiaries, or any material adverse changes, or any development involving a
prospective material adverse change, in or affecting 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.
(s)
Except as set forth in the General Disclosure Package,
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, would be likely to have a
Material Adverse Effect or prevent or adversely affect the ability of the
Company to perform its obligations under this Agreement or the consummation of
the transactions contemplated hereby; and to the Company’s knowledge, except as
set forth in the General Disclosure Package, no such proceedings are threatened
or contemplated by governmental authorities or threatened by
others.
(t)
Neither the Company nor any of its subsidiaries is in (i)
violation of its charter or by-laws (or analogous governing instrument, as
applicable), (ii) 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 (iii) violation in any respect of any statute,
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 (ii) and (iii) of this paragraph (t), for any violations or defaults
which, singularly or in the aggregate, would not have a Material Adverse
Effect.
(u)
The Company and each of its subsidiaries possesses
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; 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 or modification (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, except as set forth in or
contemplated by the General Disclosure Package.
8
(v)
Neither the Company nor any of its subsidiaries is or, after
giving effect to the offering and sale 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.
(w) Neither
the Company, its subsidiaries nor, to the Company’s knowledge, any of the
Company’s or its subsidiaries’ 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.
(x)
The Company and its subsidiaries own or possess the right to
use all material patents, trademarks, trademark registrations, service marks,
service ▇▇▇▇ registrations, trade names, copyrights, licenses, inventions,
software, databases, know-how, Internet domain names, trade secrets and other
unpatented and/or unpatentable proprietary or confidential information, systems
or procedures, and other intellectual property (collectively, “Intellectual
Property”) necessary to carry on their respective businesses as currently
conducted, and as proposed to be conducted and described in the General
Disclosure Package and the Prospectus, 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 and its subsidiaries with respect to the foregoing except for those that
would not have a Material Adverse Effect. The Company and each of its
subsidiaries have complied in all material respects with, and are not in breach
nor have received any asserted or threatened claim of breach of, any
Intellectual Property license, except for any such breach that would not
individually or in the aggregate have a Material Adverse Effect, and the Company
has no knowledge of any breach or anticipated breach by any other person of any
Intellectual Property license. The Company’s and each of its
subsidiaries’ businesses as now conducted and as proposed to be conducted do not
and will not infringe or conflict with any valid patents, trademarks, service
marks, trade names, copyrights, trade secrets, licenses or other Intellectual
Property or franchise right of any person. To its knowledge, no
material claim has been made against the Company or any of its subsidiaries
alleging the infringement by the Company or any of its subsidiaries of any
patent, trademark, service ▇▇▇▇, trade name, copyright, trade secret, license in
or other intellectual property right or franchise right of any
person. The Company and each of its subsidiaries has taken all
reasonable steps to protect, maintain and safeguard its rights in all
Intellectual Property, including the execution of appropriate nondisclosure and
confidentiality agreements. The consummation of the transactions
contemplated by this Agreement will not result in the loss or impairment of or
payment of any additional amounts with respect to, nor require the consent of
any other person in respect of, the Company’s or any of its subsidiaries’ right
to own, use, or hold for use any of the Intellectual Property as owned, used or
held for use in the conduct of the businesses as currently
conducted. With respect to the use of the software in the Company’s
or any of its subsidiaries’ businesses as they are currently conducted, neither
the Company nor any of its subsidiaries has experienced any material defects in
such software including any material error or omission in the processing of any
transactions other than defects which have been corrected, and to the knowledge
of the Company, no such software contains any device or feature designed to
disrupt, disable, or otherwise impair the functioning of any software or is
subject to the terms of any “open source” or other similar license that provides
for the source code of the software to be publicly distributed or dedicated to
the public. The Company and each of its subsidiaries has at all times
complied with all applicable laws relating to privacy, data protection, and the
collection and use of personal information collected, used, or held for use by
the Company and any of its subsidiaries in the conduct of the Company’s and its
subsidiaries businesses, except for any such breach that would not individually
or in the aggregate have a Material Adverse Effect. No claims have
been asserted or threatened against the Company or any of its subsidiaries
alleging a violation of any person’s privacy or personal information or data
rights and the consummation of the transactions contemplated hereby will not
breach or otherwise cause any violation of any law related to privacy, data
protection, or the collection and use of personal information collected, used,
or held for use by the Company or any of its subsidiaries in the conduct of the
Company’s or any of its subsidiaries’ businesses. The Company and
each of its subsidiaries takes reasonable measures to ensure that such
information is protected against unauthorized access, use, modification, or
other misuse.
9
(y)
Except as disclosed in the General Disclosure Package, the Registration
Statement and the Prospectus, neither the Company nor its subsidiaries own any
real property. 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, as described in the General
Disclosure Package, 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; 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.
(z)
No labor disturbance by the employees of the Company or any of its
subsidiaries exists or, to the Company’s knowledge, is threatened or 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.
(aa) 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, 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.
(bb) The
Company and its subsidiaries are in compliance in all material respects with all
applicable 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 where the failure to comply would not, singularly or in the aggregate,
have a Material Adverse Effect. 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 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 on the part of the Company or any
of its subsidiaries, except for any violation or liability which would not have,
singularly or in the aggregate with all such violations and liabilities, a
Material Adverse Effect; 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 has knowledge, except for any such disposal,
discharge, emission, or other release of any kind which would not have,
singularly or in the aggregate with all such discharges and other releases, a
Material Adverse Effect. 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 and its subsidiaries have reasonably concluded that such
associated costs and liabilities would not have, singularly or in the aggregate,
a Material Adverse Effect.
10
(cc) The
Company and its subsidiaries, each (i) has timely filed all necessary federal,
state, local and foreign tax returns that are required to be filed or has
requested extensions thereof, and all such returns were true, complete and
correct, (ii) has paid all federal, state, local and foreign taxes, assessments,
governmental or other charges due and payable for which it is liable pursuant to
such tax returns, including, without limitation, all sales and use taxes and all
taxes which the Company or any of its subsidiaries is obligated to withhold from
amounts owing to employees, creditors and third parties, and (iii) does 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 (i), (ii) and (iii) of this paragraph (cc), that would not, singularly
or in the aggregate, have a Material Adverse Effect. Each of the
Company and its subsidiaries has 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 each of the Company and its subsidiaries has not
incurred any liability for taxes other than in the ordinary course.
(dd) The
Company and each of its subsidiaries carries, or is covered by, insurance
provided by recognized and reputable institutions with policies in such amounts
and covering such risks as the Company reasonably considers adequate for the
conduct of their respective businesses and the value of their respective
properties and as is customary for companies engaged in similar businesses in
similar industries. The Company has no reason to believe that it or
any subsidiary will not be able (i) to renew its existing insurance coverage as
and when such policies expire or (ii) 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.
(ee) The
Company maintains a system of internal accounting and other controls sufficient
to provide reasonable assurances that (i) transactions are executed in
accordance with management’s general or specific authorizations; (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with GAAP and to maintain accountability for assets;
(iii) access to assets is permitted only in accordance with management’s general
or specific authorization; and (iv) the recorded accountability for assets is
compared with existing assets at reasonable intervals and appropriate action is
taken with respect to any differences. Except as described in the
General Disclosure Package, the Registration Statement and the Prospectus, since
December 31, 2008, there has been (A) no material weakness in the Company’s
internal control over financial reporting (whether or not remediated) and (B) 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.
11
(ff) 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
under the Exchange Act (such a significant subsidiary of the Company, a “Significant
Subsidiary”) have been made available to the Placement Agent, and such
books (i) contain a complete summary of all meetings and actions of the board of
directors (including each board committee) from inception through March 1, 2010
and shareholders of the Company (or analogous governing bodies and interest
holders, as applicable), and each of its Significant Subsidiaries since the time
of its respective incorporation or organization through the date of the latest
meeting and action, and (ii) accurately in all material respects reflect all
transactions referred to in such minutes. There are no material
transactions, agreements or other actions of the Company or of its subsidiaries
that are not properly approved and/or recorded in the minute books of the
Company or of its subsidiaries, as applicable.
(gg) There
is no franchise, lease, contract, 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 described or filed therein as
required; and all descriptions of any such franchises, leases, contracts,
agreements or documents contained in the Registration Statement 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 franchise, lease, contract or agreement has
been suspended or terminated for convenience or default by the Company or any of
its subsidiaries or any of the other parties thereto, and neither the Company
nor any of its subsidiaries has received notice nor does the Company have any
other knowledge of any such pending or threatened suspension, termination or
non-renewal, except for such pending or threatened suspensions, terminations or
non-renewals that would not, singularly or in the aggregate, have a Material
Adverse Effect.
(hh) No
relationship, direct or indirect, exists between or among the Company and any of
its subsidiaries on the one hand, and the directors, officers, stockholders (or
analogous interest holders), customers or suppliers of the Company or any of its
subsidiaries or any of their 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.
(ii)
No person or entity has the right 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. Except as described in the General Disclosure Package,
there are no persons with registration rights or similar rights to have any
securities registered by the Company or any of its subsidiaries under the
Securities Act.
(jj)
Neither the Company nor any of its subsidiaries own 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 Regulation T, U or X of the Federal Reserve
Board.
12
(kk)
Neither the Company nor any of its subsidiaries is a
party to any contract, agreement or understanding with any person (other than
this Agreement and any letter of understanding between the Company and the
Placement Agent) 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 Registration Statement, the General
Disclosure Package or the Prospectus.
(ll)
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.
(mm) The
Company is subject to and in compliance with the reporting requirements of
Section 13 or Section 15(d) of the Exchange Act. The Common Stock is
registered pursuant to Section 12(b) of the Exchange Act and is listed on Amex,
and the Company has taken no action designed to, or reasonably likely to have
the effect of, terminating the registration of the Common Stock under the
Exchange Act or delisting the Common Stock from Amex, nor has the Company
received any notification that the Commission or Amex is contemplating
terminating such registration or listing. No consent, approval,
authorization or order of, or filing, notification or registration with, Amex is
required for the listing and trading of the shares of Common Stock on Amex,
except for (i) Additional Listing Application and (ii) such other filings as may
be required by Amex..
(nn) The
Company is in compliance with all applicable provisions of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇
Act of 2002 and all applicable rules and regulations promulgated thereunder or
implementing the provisions thereof (the “▇▇▇▇▇▇▇▇-▇▇▇▇▇
Act”).
(oo) The
Company has taken all necessary actions to ensure that it is in compliance with
all applicable corporate governance requirements set forth in the NYSE Amex
Rules and Company Guide.
(pp) Neither
the Company nor any of its subsidiaries nor, to the best of the Company’s
knowledge, any officer, director, employee or agent of the Company or any
subsidiary, has not made any contribution or other payment to any official of,
or candidate for, any federal, state, local or foreign office in violation of
any law (including the Foreign Corrupt Practices Act of 1977, as
amended).
(qq) 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
Securities Act) and any unconsolidated entity, including, but not limited to,
any structured finance, special purpose or limited purpose entity that could
materially and adversely 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.
13
(rr)
There are no outstanding loans, advances (except
normal advances for business expenses in the ordinary course of business) or
guarantees of indebtedness by the Company or any of its subsidiaries to or for
the benefit of any of the officers or directors of the Company, any of its
subsidiaries or any of their respective family members.
(ss) 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.
(tt)
No approval of the shareholders of the Company under the
rules and regulations of Amex is required for the Company to issue and deliver
to the Purchasers the Shares.
(uu) To
the Company’s knowledge after due inquiry, other than as provided herein, there
are no claims, payments, issuances, arrangements or understandings for services
in the nature of a finder’s, consulting or origination fee with respect to the
introduction of the Company to the Placement Agent or the sale of the Shares
hereunder or any other arrangements, agreements, understandings, payments or
issuances with respect to the Company.
(vv) The
Company has not made any direct or indirect payments (in cash, securities or
otherwise) to (A) any person, as a finder’s fee, investing fee or otherwise, in
consideration of such person raising capital for the Company or introducing to
the Company persons who provided capital to the Company, (B) any FINRA member,
or (C) any person or entity that has any direct or indirect affiliation or
association with any FINRA member within the 12 month period prior to the date
on which the Registration Statement was filed with the Commission (“Filing Date”) or
thereafter, other than fees made in connection with the Company’s PIPE financing
consummated in April 2009.
(ww) None
of the net proceeds of the offering will be paid by the Company to any
participating FINRA member or any affiliate or associate of any participating
FINRA member, except as specifically authorized herein.
(xx) To
the Company’s knowledge, no (A) officer or director of the Company or its
subsidiaries, (B) owner of 5% or more of the Company’s unregistered securities
or that of its subsidiaries or (C) owner of any amount of the Company’s
unregistered securities acquired within the 180 day period prior to the Filing
Date, has any direct or indirect affiliation or association with any FINRA
member. The Company will advise the Placement Agent and its counsel if it
becomes aware that any officer, director or stockholder of the Company or its
subsidiaries is or becomes an affiliate or associated person of a FINRA member
participating in the offering.
(yy) Other
than the Placement Agent, no person has the right to act as a placement agent or
as a financial advisor to the Company in connection with the transactions
contemplated hereby.
4.
The
Closing. The time and date of closing and delivery of the
documents required to be delivered to the Placement Agent pursuant to Sections 5
and 7 hereof shall be at 10:00 A.M., New York time, on March 4, 2010 (the “Closing Date”) at the
office of Loeb & Loeb LLP, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇.
5.
Further Agreements of the
Company. The Company agrees with the Placement Agent and the
Purchasers:
(a)
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 on the date hereof; 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 and 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 copies thereof; to file promptly
all material required to be filed by the Company with the Commission pursuant to
Rule 433(d) or 163(b)(2), as the case may be; to file promptly all reports and
any definitive proxy or information statements required to be filed by the
Company with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the
Exchange Act subsequent to the date of the Prospectus and for so long as the
delivery of a prospectus (or in lieu thereof, the notice referred to in Rule
173(a) 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 Preliminary Prospectus, any Issuer
Free Writing Prospectus or the Prospectus, of the suspension of the
qualification of the Shares for offering or sale in any jurisdiction, of the
initiation or threatening of any proceeding for any such purpose, or of any
request by the Commission for the amending or supplementing of the Registration
Statement, the General Disclosure Package or the Prospectus or for additional
information; and, in the event of the issuance of any stop order or of any order
preventing or suspending the use of any Preliminary Prospectus, any Issuer Free
Writing Prospectus or the Prospectus or suspending any such qualification, and
promptly to use its best efforts to obtain the withdrawal of such
order.
14
(b)
The Company represents and agrees that it has not made and,
unless it obtains the prior consent of the Placement Agent, it 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 unless the prior
written consent of the Placement Agent has been received (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 Issuer Free
Writing Prospectus(es) included in Schedule A
hereto. The Company represents that it has treated and agrees that it
will treat each Permitted Free Writing Prospectus as an Issuer Free Writing
Prospectus, comply with the requirements of Rules 164 and 433 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 the Placement Agent that the Placement Agent otherwise would not have been
required to file thereunder.
(c)
If at any time when a Prospectus relating to the
Shares is required to be delivered under the Securities Act, any event occurs or
condition exists as a result of which the Prospectus, as then amended or
supplemented, would include any untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading, or the
Registration Statement, as then amended or supplemented, would include any
untrue statement of a material fact or omit to state a material fact necessary
to make the statements therein not misleading, or if for any other reason it is
necessary at any time to amend or supplement any Registration Statement or the
Prospectus to comply with the Securities Act or the Exchange Act, the Company
will promptly notify the Placement Agent, and upon the Placement Agent’s
request, the Company will promptly prepare and file with the Commission, at the
Company’s expense, an amendment to the Registration Statement or an amendment or
supplement to the Prospectus that corrects such statement or omission or effects
such compliance and will deliver to the Placement Agent, without charge, such
number of copies thereof as the Placement Agent may reasonably
request. The Company consents to the use of the Prospectus or any
amendment or supplement thereto by the Placement Agent.
15
(d)
If the General Disclosure Package is being used to solicit
offers to buy the Shares at a time when the Prospectus is not yet available to
prospective purchasers and any event shall occur as a result of which, in the
judgment of the Company or in the reasonable opinion of the 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 under which
they were made, 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 applicable law, the Company promptly will either (i) 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 (ii)
prepare and file with the Commission an appropriate filing under the Exchange
Act which shall be incorporated by reference in the General Disclosure Package
so that the General Disclosure Package as so amended or supplemented will not,
in the light of the circumstances under which they were made, be misleading or
conflict with the Registration Statement then on file, or so that the General
Disclosure Package will comply with applicable law.
(e)
If at any time following issuance of an Issuer Free
Writing Prospectus there occurred or occurs an event or development as a result
of which such Issuer Free Writing Prospectus conflicted or will conflict with
the information contained in the Registration Statement, Pricing Prospectus or
Prospectus, including any document incorporated by reference therein and any
prospectus supplement deemed to be a part thereof and not superseded or modified
or included or would include an untrue statement of a material fact or omitted
or would omit to state a material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, 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.
(f)
To the extent not available on the Commission’s ▇▇▇▇▇ or IDEA system, 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.
(g)
To the extent not available on the Commission’s ▇▇▇▇▇ or IDEA
system, to deliver promptly to the Placement Agent in New York City such number
of the following documents as the Placement Agent shall reasonably request: (i)
conformed copies of the Registration Statement as originally filed with the
Commission (in each case excluding exhibits), (ii) each Preliminary Prospectus
(if any), (iii) any Issuer Free Writing Prospectus, (iv) the Prospectus (the
delivery of the documents referred to in clauses (i), (ii), (iii) and (iv) of
this paragraph (g) to be made not later than 10:00 A.M., New York time, on the
business day following the execution and delivery of this Agreement), (v)
conformed copies of any amendment to the Registration Statement (excluding
exhibits), (vi) any amendment or supplement to the General Disclosure Package or
the Prospectus (the delivery of the documents referred to in clauses (v) and
(vi) of this paragraph (g) to be made not later than 10:00 A.M., New York time,
on the business day following the date of such amendment or supplement) and
(vii) any document incorporated by reference in the General Disclosure Package
or the Prospectus (excluding exhibits thereto) (the delivery of the documents
referred to in clause (vi) of this paragraph (g) to be made not later than 10:00
A.M., New York City time, on the business day following the date of such
document).
16
(h)
To make generally available to its shareholders as soon as
practicable, but in any event not later than eighteen (18) 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); and to furnish to its shareholders as soon as practicable
after the end of each fiscal year an annual report (including a balance sheet
and statements of income, shareholders’ equity and cash flows of the Company and
its consolidated subsidiaries certified by independent public accountants) and
as soon as practicable after each of the first three fiscal quarters of each
fiscal year (beginning with the first fiscal quarter after the effective date of
such Registration Statement), consolidated summary financial information of the
Company and its subsidiaries for such quarter in reasonable detail.
(i)
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 the Shares in such jurisdictions; provided that the Company and its
subsidiaries shall not be obligated to qualify as foreign corporations in any
jurisdiction in which they are not so qualified or to file a general consent to
service of process in any jurisdiction.
(j)
To the extent not available on the Commission’s ▇▇▇▇▇ or
IDEA system, upon request, during the period of five (5) years from the date
hereof, to deliver to the Placement Agent upon request, (i) as soon as they are
available, copies of all reports or other communications furnished to
shareholders, and (ii) 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 Common Stock is
listed or quoted.
(k)
That the Company will not, for a period of ninety (90)
days from the date of the Prospectus, (the “Lock-Up Period”)
without the prior written consent of the Placement Agent, 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 (i) the Company’s sale of the
Shares hereunder and (ii) the issuance of restricted Common Stock or options to
acquire Common Stock pursuant to the Company’s employee benefit plans, qualified
stock option plans or other employee compensation plans as such plans are in
existence on the date hereof and described in the Prospectus and the issuance of
Common Stock pursuant to the valid exercises of options, warrants or rights
outstanding on the date hereof. The Company will cause each executive
officer, director and shareholder listed on Schedule B hereto to
furnish to the Placement Agent, prior to the Closing Date, a letter,
substantially in the form of Exhibit B hereto,
pursuant to which each such person shall agree, among other things, not to
directly or indirectly offer, sell, assign, transfer, pledge, contract to sell,
or otherwise dispose of, any shares of Common Stock or any securities
convertible into or exercisable or exchangeable for Common Stock, not to engage
in any swap or other agreement or arrangement that transfers, in whole or in
part, directly or indirectly, the economic risk of ownership of Common Stock or
any such securities and not to engage in any short selling of any Common Stock
or any such securities, during the Lock-Up Period, without the prior written
consent of the Placement Agent. The Company also agrees that during
such period, the Company will not file any registration statement, preliminary
prospectus or prospectus, or any amendment or supplement thereto, under the
Securities Act for any such transaction or which registers, or offers for sale,
Common Stock or any securities convertible into or exercisable or exchangeable
for Common Stock, except for a registration statement on Form S−8 relating to
employee benefit plans. The Company hereby agrees that (i) if it
issues an earnings release or material news, or if a material event relating to
the Company occurs, during the last seventeen (17) days of the Lock-Up Period,
or (ii) if prior to the expiration of the Lock-Up Period, the Company announces
that it will release earnings results during the sixteen (16)-day period
beginning on the last day of the Lock-Up Period, the restrictions imposed by
this paragraph (k) or the letter shall continue to apply until the expiration of
the eighteen (18)-day period beginning on the issuance of the earnings release
or the occurrence of the material news or material event.
17
(l)
To supply the Placement Agent with copies of all
correspondence to and from, and all documents issued to and by, the Commission
in connection with the registration of the Shares under the Securities Act or
the Registration Statement, any Preliminary Prospectus or the Prospectus, or any
amendment or supplement thereto or document incorporated by reference
therein.
(m) Prior
to the Closing 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 or incorporated by reference into the
Registration Statement and the Prospectus.
(n)
Prior to the Closing 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.
(o)
Prior to the Closing Date, 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.
(p)
Not to take any action prior to the Closing Date which
would require the Prospectus to be amended or supplemented pursuant to Section
5.
(q)
To at all times comply with all applicable provisions of the
▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act in effect from time to time.
(r)
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.”
(s) To
use its reasonable best efforts to list, effect and maintain, subject to notice
of issuance, the Common Stock on Amex.
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(t)
To use its reasonable best efforts to assist the
Placement Agent and its counsel with any filings with FINRA and obtaining
clearance from FINRA as to the amount of compensation allowable or payable to
the Placement Agent.
(u)
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 Closing 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: (a) the costs incident to the
authorization, issuance, sale, preparation and delivery of the Shares to the
Purchasers and any taxes payable in that connection; (b) the costs incident to
the registration of the Shares under the Securities Act; (c) the costs incident
to the preparation, printing and distribution of the Registration Statement, the
Base Prospectus, any Preliminary Prospectus, any Issuer Free Writing Prospectus,
the General Disclosure Package, the Prospectus, any amendments, supplements and
exhibits thereto or any document incorporated by reference therein and the costs
of printing, reproducing and distributing any transaction document by mail,
telex or other means of communications; (d) if applicable, the filing fees
incurred in connection with any filings made with FINRA in connection with its
required review of the terms of the sale of the Shares; (e) any applicable
listing, quotation or other fees; (f) the cost of preparing and printing stock
certificates; (g) all fees and expenses of the registrar and transfer agent of
the Shares; (i) the reasonable fees, disbursements and expenses of counsel to
the Placement Agent, and (h) all other costs and expenses incident to the
offering of the Shares or the performance of the obligations of the Company
under this Agreement (including, without limitation, the fees and expenses of
the Company’s counsel and the Company’s independent accountants and the travel
and other expenses incurred by Company personnel in connection with any “road
show” including, without limitation, any expenses advanced by the Placement
Agent on the Company’s behalf (which will be promptly reimbursed)); provided
that, except to the extent otherwise provided in this Section 6 and in Sections
8 and 10, the Placement Agent shall pay its own costs and expenses, and,
provided further, that for any costs and/or expenses of the Placement Agent for
which it is seeking reimbursement by the Company, any single expense over $1,000
has been previously approved in writing by the Company, such approval not to be
unreasonably withheld.
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, and the Closing
of the sale of the Shares, are subject to the accuracy, when made and as of the
Applicable Time and on the 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)
No stop order suspending the effectiveness of the
Registration Statement or any part thereof, preventing or suspending the use of
any Base Prospectus, any Preliminary Prospectus, the Prospectus or any Permitted
Free Writing Prospectus or any part thereof shall have been issued and no
proceedings for that purpose or pursuant to Section 8A under the Securities Act
shall have been initiated or threatened by the Commission, and all requests for
additional information on the part of the Commission (to be included or
incorporated by reference in the Registration Statement or the Prospectus or
otherwise) shall have been complied with to the reasonable satisfaction of the
Placement Agent; the Rule 462(b) Registration Statement, if any, each Issuer
Free Writing Prospectus, if any, and the Prospectus shall have been filed with
the Commission within the applicable time period prescribed for such filing by,
and in compliance with, the Rules and Regulations and in accordance with Section
5(a), and the Rule 462(b) Registration Statement, if any, shall have become
effective immediately upon its filing with the Commission; and FINRA shall have
raised no objection to the fairness and reasonableness of the terms of this
Agreement or the transactions contemplated hereby.
19
(b)
The Placement Agent shall not have discovered and disclosed to the
Company on or prior to the Closing Date that the Registration Statement or any
amendment or supplement thereto contains an untrue statement of a fact which, in
the opinion of counsel for the Placement 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 Escrow Agreement, the Shares, the Registration
Statement, the General Disclosure Package, each Issuer Free Writing Prospectus,
if any, and the Prospectus and all other legal matters relating to this
Agreement and the transactions contemplated hereby shall be reasonably
satisfactory in all material respects to counsel for the Placement Agent, and
the Company shall have furnished to such counsel all documents and information
that they may reasonably request to enable them to pass upon such
matters.
(d)
▇▇▇▇▇▇ Godward Kronish LLP, together with
Nevada special counsel, shall have furnished to the Placement Agent such
counsel’s written opinion, as counsel to the Company, addressed to the Placement
Agent, dated the Closing Date, in form and substance reasonably satisfactory to
the Placement Agent.
(e)
The Company shall have furnished to the Placement Agent a
certificate, dated the Closing Date, of its Chief Executive Officer, its
President or a Vice President and its chief financial officer stating that (i)
such officers have carefully examined the Registration Statement, the General
Disclosure Package, any Permitted Free Writing Prospectus and the Prospectus
and, in their opinion, the Registration Statement and each amendment thereto, at
the Applicable Time and as of the date of this Agreement and as of the Closing
Date did not include any untrue statement of a material fact and did not omit to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading, and the General Disclosure Package, as of the
Applicable Time and as of the Closing Date, any Permitted Free Writing
Prospectus as of its date and as of the Closing Date, the Prospectus and each
amendment or supplement thereto, as of the respective date thereof and as of the
Closing Date, did not include any untrue statement of a material fact and did
not omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances in which they were made, not
misleading, (ii) since the effective date of the initial Registration Statement,
no event has occurred which should have been set forth in a supplement or
amendment to the Registration Statement, the General Disclosure Package or the
Prospectus, (iii) to the best of their knowledge after reasonable investigation,
as of the Closing Date, the representations and warranties of the Company in
this Agreement are true and correct and the Company has complied in all material
respects with all agreements and satisfied in all material respects all
conditions on its part to be performed or satisfied hereunder at or prior to the
Closing Date, and (iv) there has not been, subsequent to the date of the most
recent audited financial statements included or incorporated by reference in the
General Disclosure Package, any material adverse change in the financial
position or results of operations of the Company and its subsidiaries taken as a
whole, 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.
20
(f)
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, (a) 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
(b) there shall not have been any change in the capital stock (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 Common
Stock pursuant to employee stock purchase plans) or long-term debt of the
Company nor 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 taken as a whole, otherwise than as set forth in the
General Disclosure Package, the effect of which, in any such case described in
clause (a) or (b) of this paragraph (h), 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.
(g)
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 its subsidiaries
taken as a whole; 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 and its subsidiaries taken as a whole.
(h)
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 or Amex 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.
(i)
The Company shall have filed an Additional Listing
Application with Amex and shall have received the approval thereof from
Amex.
(j)
The Placement Agent shall have received the written agreements,
substantially in the form of Exhibit C hereto, of
the executive officers, directors and shareholders of the Company listed on
Schedule B to
this Agreement.
21
(k)
The Company shall have entered into Subscription
Agreements with each of the Purchasers and such agreements shall be in full
force and effect.
(l)
The Company shall have entered into the Escrow Agreement and
such agreement shall be in full force and effect.
(m) The
Placement Agent shall have received clearance from FINRA as to the amount of
compensation allowable or payable to the Placement Agent as described in the
Pricing Prospectus.
(n)
The Placement Warrants, in a form reasonably
satisfactory to the Placement Agent, shall have been delivered to the Placement
Agent.
(o) Prior
to the Closing Date, the Company shall have furnished to the Placement Agent
such further information, certificates (including a Secretary’s Certificate),
letters or documents as the Placement Agent shall have reasonably
requested.
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.
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 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 (A) any untrue statement or alleged untrue statement of a material
fact contained in any Preliminary Prospectus, 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, (B) the omission or alleged omission to state in any
Preliminary Prospectus, 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 (C) 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, and shall reimburse the Placement
Agent Indemnified Party promptly upon demand for any 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 Preliminary Prospectus, 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. 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.
22
(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 Preliminary Prospectus, 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 Preliminary Prospectus, 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 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. This indemnity agreement is not exclusive and will be in
addition to any liability, which the Placement Agent might otherwise have and
shall not limit any rights or remedies which may otherwise be available at law
or in equity to each Company Indemnified Party. 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 the Placement
Agent in accordance with Section 2.5.
(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 Section 2.6 or the Placement Agent 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 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 the
Placement Agent 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.
23
(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 (before
deducting expenses) received by the Company bear to the total Placement Fee
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 Preliminary Prospectus, any Registration
Statement or the Prospectus, or in any amendment or supplement thereto, consists
solely of the Placement Agent’s Information. 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 legal 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), 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
2.5 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.
24
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(f), 7(g) or 7(h) have occurred or if the Purchasers shall decline to
purchase the Shares for any reason permitted under this Agreement or the
Subscription Agreements.
10.
Reimbursement of Placement
Agent’s Expenses. Notwithstanding anything to the contrary in
this Agreement, if (a) the Company shall fail to tender the Shares for delivery
to the Purchasers for any reason not permitted under this Agreement, or (b) 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 any amounts in accordance
with Section 6, the Company shall reimburse the Placement Agent for such other
accountable out-of-pocket expenses as shall have been reasonably incurred by
them in connection with this Agreement and the proposed purchase of the Shares,
and upon demand the Company shall pay the full amount thereof to the Placement
Agent.
25
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 Placement Agent, 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 the 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.
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.
26
14.
Notices. All
statements, requests, notices and agreements hereunder shall be in writing,
and:
(a)
if to the Placement Agent, shall be mailed, delivered or
telecopied to
▇▇▇▇▇▇▇▇ Curhan Ford & Co., ▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇ ▇▇▇▇▇, Fax: ▇▇▇-▇▇▇-▇▇▇▇;
and
(b)
if to the Company, shall be mailed, delivered or
telecopied to Procera Networks, Inc., ▇▇▇-▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇,
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ (Fax: ▇▇▇-▇▇▇-▇▇▇▇), with a copy to: Cooley Godward
Kronish LLP, Five Palo Alto Square, ▇▇▇▇ ▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇,
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq. and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq. (Fax:
▇▇▇-▇▇▇-▇▇▇▇).
provided,
however, that any notice to the Placement Agent pursuant to Section 8 shall be
mailed, delivered or telecopied to the
Placement Agent at its address set forth above, 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 New York Stock Exchange, Inc. is open for trading and
(b) “subsidiary” has the meaning set forth in Rule 405 of the Rules and
Regulations.
16.
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, including
without limitation Section 5-1401 of the New York General Obligations
Law. No legal proceeding may be commenced, prosecuted or continued in
any court other than the courts of the State of New York located in the City and
County of New York or in the United States District Court for the Southern
District of New York, which courts shall have jurisdiction over the adjudication
of such matters, and the Company and the Placement 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 and the Placement Agent each hereby waive all right to trial by jury in
any legal proceeding (whether based upon contract, tort or otherwise) in any way
arising out of or relating to this Agreement. The Company agrees that
a final judgment in any such legal proceeding brought in any such court shall be
conclusive and binding upon the Company and the Placement 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.
17.
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: (i) the paragraph on the
front cover page concerning the terms of the offering by the Placement
Agent.
18. 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.
19.
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.
27
20.
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.
[signature
page follows]
28
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.
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Very
truly yours,
|
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PROCERA
NETWORKS, INC.
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By:
|
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
|
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|
Name:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
|
|||||
|
Title:
Chief Financial Officer
|
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Accepted
as of the date
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first
above written:
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▇▇▇▇▇▇▇▇
CURHAN FORD & CO.
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By:
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/s/ ▇▇▇▇ ▇▇▇▇▇
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Name:
▇▇▇▇ ▇▇▇▇▇
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Title:
Managing Director
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29
SCHEDULE
A
General
Use Free Writing Prospectuses
None.
SCHEDULE
B
List of
officers, directors and shareholders subject to lock-up
All
officers and directors of the Company
EXHIBIT
A
Form of
Subscription Agreement
EXHIBIT
B
Form of
Lock-Up Agreement
March 1,
2010
▇▇▇▇▇▇▇▇
CURHAN FORD & CO.
▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇▇
▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Re: Procera
Networks, Inc. offering of 18,000,000 Shares
Dear
Sirs:
In order
to induce ▇▇▇▇▇▇▇▇ Curhan Ford & Co. (the “Placement Agent”), to
enter in to a certain placement agent agreement with Procera Networks, Inc., a
Nevada corporation (the “Company”), with
respect to the public offering of shares (the “Shares”) of the
Company’s Common Stock, par value $0.001 per share (“Common Stock”), the
undersigned hereby agrees that for a period (the “lock-up period”) of
ninety (90) days following the date of the final prospectus filed by the Company
with the Securities and Exchange Commission in connection with such public
offering, the undersigned will not, without the prior written consent of the
Placement Agent, 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, or (iii) engage in any short
selling of any Beneficially Owned Shares, Common Stock or securities convertible
into or exercisable or exchangeable for Common Stock.
If (i)
the Company issues an earnings release or material news or a material event
relating to the Company occurs during the last seventeen (17) days of the
lock-up period, or (ii) prior to the expiration of the lock-up period, the
Company announces that it will release earnings results during the sixteen
(16)-day period beginning on the last day of the lock-up period, the
restrictions imposed by this Agreement shall continue to apply until the
expiration of the eighteen (18)-day period beginning on the issuance of the
earnings release or the occurrence of the material news or material
event.
In
addition, the undersigned hereby waives, from the date hereof until the
expiration of the lock-up period, any and all 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. 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 any shares of Common Stock, securities convertible
into or exercisable or exchangeable for Common Stock or Beneficially Owned
Shares.
Notwithstanding
the foregoing, the undersigned may transfer Beneficially Owned Shares (i) as a
bona fide gift, (ii) to any trust for the direct or indirect benefit of the
undersigned or the immediate family of the undersigned, or (iii) by will or
intestate succession; provided, that (A) each donee, transferee or distribute
shall execute and deliver a letter substantially in the form hereof and (B)
neither the undersigned nor any other party to the applicable transaction shall
be required to file, or voluntarily file, a report under Section 16(a) of the
Securities Exchange Act of 1934, as amended (the “Exchange Act”), other
than a filing on Form 5 made after expiration of the lock-up
period. For purposes of this agreement, the term “immediate family”
shall mean any relationship by blood marriage or adoption, not more remote than
first cousin.
Anything
contained herein to the contrary notwithstanding, any person or entity to whom
shares of Common Stock, securities convertible into or exercisable or
exchangeable for Common Stock or Beneficially Owned Shares are transferred from
the undersigned shall be bound by the terms of this Agreement.
If the
Offering is not consummated by March 15, 2010, this Agreement shall terminate
and the undersigned will be released from its obligations
hereunder.
|
[Signatory]
|
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|
By:
|
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|
Name:
|
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|
Title:
|
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