1,544,638 Shares Warrants to Purchase 308,927 Shares EMISPHERE TECHNOLOGIES, INC. Common Stock PLACEMENT AGENCY AGREEMENT
Exhibit
1.1
Execution Copy
1,544,638 Shares
Warrants to Purchase 308,927 Shares
EMISPHERE TECHNOLOGIES, INC.
Common Stock
August 16, 2007
THINKEQUITY PARTNERS LLC
00 Xxxx 00xx Xxxxxx
Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
00 Xxxx 00xx Xxxxxx
Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Emisphere Technologies, Inc., a Delaware corporation (the “Company”), proposes to issue and
sell to certain investors (each an “Investor” and, collectively, the “Investors”), (i) up to an
aggregate of 1,544,638 shares (the “Shares”) of the Company’s common stock, $0.01 par value per
share (the “Common Stock”), and (ii) warrants to purchase up to 308,927 shares of Common Stock (the
"Warrants” and together with the Shares, the “Securities”). The shares of Common Stock issuable
upon exercise of the Warrants are herinafter referred to as the “Warrant Shares”. The Company
desires to engage ThinkEquity Partners LLC (the “Placement Agent”) as its exclusive placement agent
in connection with such issuance and sale of the Securities.
The Company has prepared and filed with the Securities and Exchange Commission (the
“Commission") a registration statement on Form S-3 (File No. 333-133087) under the Securities Act
of 1933, as amended, and the rules and regulations of the Commission thereunder (collectively, the
"Securities Act”), and such amendments to such registration statement as may have been required to
the date of this Agreement. Such registration statement has been declared effective by the
Commission. Each part of such registration statement, at any given time, including amendments
thereto at such time, the exhibits and any schedules thereto at such time, the documents
incorporated by reference therein pursuant to Item 12 of Form S-3 under the Securities Act at such
time and the documents and information otherwise deemed to be a part thereof or included therein by
Rule 430A, 430B or 430C under the Securities Act or otherwise pursuant to the Securities Act at
such time, is herein called the “Registration Statement.” Any registration statement filed by the
Company pursuant to Rule 462(b) under the Securities Act is called the “Rule 462(b) Registration
Statement” and, from and after the date and time of filing of the Rule 462(b) Registration
Statement, the term “Registration Statement” shall include the Rule 462(b) Registration Statement.
The Company proposes to file with the Commission pursuant to Rule 424 under the Securities Act
a final prospectus supplement relating to the Securities to a form of prospectus included in the
Registration Statement relating to the Securities in the form heretofore delivered to the Placement
Agent.
Such prospectus included in the Registration Statement at the time it was declared effective by the
Commission or in the form in which it has been most recently filed with the Commission on or prior
to the date of this Agreement is hereinafter called the “Base Prospectus.” Such supplemental form
of prospectus, in the form in which it shall be filed with the Commission pursuant to Rule
424(b)(including the Base Prospectus as so supplemented) is hereinafter called the “Prospectus.”
Any preliminary form of Prospectus which is filed or used prior to filing of the Prospectus is
hereinafter called a “Preliminary Prospectus.” Any reference herein to the Base Prospectus, any
Preliminary Prospectus or the Prospectus or to any amendment or supplement to any of the
foregoing shall be deemed to refer to include any documents incorporated by reference therein
pursuant to Item 12 of Form S-3 under the Securities Act as of the date of such prospectus, and, in
the case of any reference herein to the Prospectus, also shall be deemed to include any documents
incorporated by reference therein, and any supplements or amendments thereto, filed with the
Commission after the date of filing of the Prospectus under Rule 424(b) under the Securities Act,
and prior to the termination of the offering of the Securities by the Placement Agent.
For purposes of this Agreement, all references to the Registration Statement, the Base
Prospectus, any Preliminary Prospectus, the Prospectus or any amendment or supplement to any of the
foregoing shall be deemed to include the copy filed with the Commission pursuant to its Electronic
Data Gathering, Analysis and Retrieval System (“XXXXX”). All references in this Agreement to
amendments or supplements to the Registration Statement, the Base Prospectus, any Preliminary
Prospectus or the Prospectus shall be deemed to mean and include the subsequent filing of any
document under the Exchange Act (as defined herein) and which is deemed to be incorporated therein
by reference therein or otherwise deemed to be a part thereof.
1. Agreement to Act as Placement Agent; Delivery and Payment. On the basis of the
representations, warranties and agreements of the Company herein contained, and subject to the
terms and conditions set forth in this Agreement:
(a) The Company hereby engages the Placement Agent, on a best efforts basis, to act as its
exclusive placement agent in connection with the offer and sale, by the Company, of Securities to
the Investors. Prior to the earlier of (i) the date on which this Agreement is terminated and (ii)
the Closing Date (as defined below), the Company shall not, without the prior written consent of
the Placement Agent, solicit or accept offers to purchase Securities of the Company (other than
pursuant to the exercise of options or warrants to purchase shares of Common Stock that are
outstanding at the date hereof) otherwise than through the Placement Agent in accordance herewith.
(b) Upon the occurrence of the Closing (as defined below), the Company shall pay to the
Placement Agent an aggregate of seven percent (7.0%) of the gross proceeds received by the Company
from its sale of the Securities (the “Placement Fee”). The Company expressly acknowledges and
agrees that the Placement Agent’s obligations hereunder are on a best efforts basis and this
Agreement shall not give rise to a commitment by the Placement Agent or any of its affiliates to
underwrite or purchase any of the Securities or otherwise provide any financing, and the Placement
Agent shall have no authority to bind the Company in respect of the sale of any Securities. The
sale of the Securities shall be made pursuant to subscription agreements in the form included as
Exhibit A hereto (the “Subscription Agreements”). The Company shall have the sole right to
accept offers to purchase the Securities and may reject any such offer in whole or in part.
Notwithstanding the foregoing, it is understood and agreed that the Placement Agent or any of its
affiliates may, solely at its discretion and without any obligation to do so, purchase Securities
as principal; provided, however, that any such purchases by the Placement Agent (or its affiliates)
shall be fully disclosed to the Company and approved by the Company in accordance with the previous
sentence.
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(c) Concurrently with the execution and delivery of this Agreement, the Company, the Placement
Agent and JPMorgan Chase, as escrow agent (the “Escrow Agent”), shall enter into an escrow
agreement (the “Escrow Agreement”), pursuant to which an escrow account (the “Escrow Account”) will
be established for the benefit of the Company and the Investors. Prior to the Closing, each such
Investor shall deposit into the Escrow Account an amount equal to the product of (x) the number of
Securities such Investor has agreed to purchase and (y) the purchase price per unit as set forth on
the cover page of the Prospectus (the “Purchase Amount”). The aggregate of all such Purchase
Amounts is herein referred to as the “Escrow Funds.” On the Closing Date, the Escrow Agent will
disburse the Escrow Funds to the Company and the Placement Agent as provided in the Escrow
Agreement and the Company shall, or shall cause its transfer agent to, deliver the Securities
purchased by such Investors.
(d) Payment of the purchase price for, and delivery of, the Securities shall be made at a
closing (the “Closing”) at the offices of Xxxxx Xxxxxxx Xxxxxxx Israels LLP, counsel for the
Company, located at One Financial Center, Boston, Massachusetts, at 10:00 a.m., local time, on the
third or fourth business day (as permitted under Rule 15c6-1 under the Securities Exchange Act of
1934, as amended (collectively with the rules and regulations promulgated thereunder, the “Exchange
Act”)) after the determination of the public offering price of the Securities (such date of payment
and delivery being herein called the “Closing Date”). All such actions taken at the Closing shall
be deemed to have occurred simultaneously. No Securities 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 Securities shall have been delivered to the
Investor thereof against payment therefore by such Investor. If the Company shall default in its
obligations to deliver Securities to an Investor whose offer it has accepted, the Company shall
indemnify and hold the Placement Agent harmless against any loss, claim or damage arising from or
as a result of such default by the Company.
(e) The Securities shall be registered in such names and in such denominations as the
Placement Agent shall request by written notice to the Company.
2. Representations and Warranties of the Company. The Company represents and warrants to the
Placement Agent as follows:
(a) Registration Statement. The Company and the transactions contemplated by this Agreement
meet the requirements and comply with the conditions for the use of Form S-3 under the Securities
Act. The offering of the Securities by the Company complies with the applicable requirements of
Rule 415 under the Securities Act. The Company has complied to the Commission’s satisfaction
with all requests of the Commission for additional or supplemental information. The Registration
Statement has become effective under the Securities Act. No stop order preventing or suspending
use of the Registration Statement, any Preliminary Prospectus or the Prospectus or the
effectiveness of the Registration Statement, has been issued by the Commission, and no proceedings
for such purpose have been instituted or, to the Company’s knowledge, are contemplated or
threatened by the Commission.
(b) Compliance with Registration Requirements. As of the time any part of the Registration
Statement or any post-effective amendment thereto, at the time it became effective (including each
deemed effective date with respect to the Placement Agent pursuant to Rule 430B under the
Securities Act) and as of the Closing Date, the Registration Statement complied and will comply, in
all material respects, with the requirements of the Securities Act and did not and will not contain
any untrue statement of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading. Each Preliminary Prospectus and
the Prospectus, at the time of filing or the time of first use and as of the Closing Date, complied
and will comply, in all material respects, with the requirements of the Securities Act 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 the light of
the
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circumstances under which they were made, not misleading; provided, that the Company makes no
representations or warranty in this paragraph with respect to any Placement Agent Information (as
defined in Section 7).
(c) Disclosure Package. As of the Time of Sale (as defined below) and as of the Closing Date,
neither (A) the Issuer General Free Writing Prospectus(es)(as defined below) issued at or prior to
the Time of Sale, the Statutory Prospectus (as defined below) and the information included on
Exhibit E hereto, all considered together (collectively, the “Disclosure Package"), nor (B)
any individual Issuer Limited-Use Free Writing Prospectus (as defined below), when considered
together with the Disclosure Package, included or will include any untrue statement of a material
fact or omitted or will omit to state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not misleading; provided,
that the Company makes no representations or warranty in this paragraph with respect to any
Placement Agent Information. No statement of material fact included in the Prospectus has been
omitted from the Disclosure Package and no statement of material fact included in the Disclosure
Package that is required to be included in the Prospectus has been omitted therefrom. As used in
this paragraph and elsewhere in this Agreement:
(1) “Time of Sale” with respect to any Investor, means the time of receipt and
acceptance of an executed Subscription Agreement from such Investor.
(2) “Statutory Prospectus” as of any time means the prospectus that is included
in the Registration Statement immediately prior to the Time of Sale, including any
document incorporated by reference therein. For purposes of this definition,
information contained in a form of prospectus that is deemed retroactively to be a
part of the Registration Statement pursuant to Rule 430A shall be considered to be
included in the Statutory Prospectus as of the actual time that form of prospectus
is filed with the Commission pursuant to Rule 424(b).
(3) “Issuer Free Writing Prospectus” means any “issuer free writing
prospectus,” as defined in Rule 433 under the Securities Act (“Rule 433”), relating
to the Securities 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) under the Securities Act.
(4) “Issuer General Free Writing Prospectus” means any Issuer Free Writing
Prospectus that is intended for general distribution to prospective investors as
identified on Schedule I hereto, and does not include a “bona fide
electronic road show” as defined in Rule 433.
(5) “Issuer Limited-Use Free Writing Prospectus” means any Issuer Free Writing
Prospectus that is not an Issuer General Free Writing Prospectus, including any
“bona fide electronic road show” as defined in Rule 433, that is made available
without restriction pursuant to Rule 433(d)(8)(ii), even though not required to be
filed with the Commission.
(d) Conflict with Registration Statement. Each Issuer Free Writing Prospectus, as of its
issue date and at all subsequent times through the completion of the offering and sale of the
Securities or until any earlier date that the Company notified or notifies the Placement Agent, did
not, does not and will not include any information that conflicted, conflicts or will conflict with
the information contained in the Registration Statement, any Statutory Prospectus or the Prospectus
including any document incorporated by reference therein and any prospectus supplement deemed to be
a part
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thereof that has not been superseded or modified; provided, that the Company makes no
representations or warranty in this paragraph with respect to any Placement Agent Information.
(e) Distributed Materials. The Company has not, directly or indirectly, distributed and will
not distribute any prospectus or other offering material in connection with the offering and sale
of the Securities other than any Preliminary Prospectus, the Disclosure Package or the Prospectus,
and other materials, if any, permitted under the Securities Act to be distributed and consistent
with Section 4(d) below. The Company will file with the Commission all Issuer Free Writing
Prospectuses required to be filed in the time required under Rule 433(d) under the Securities Act.
The Company has satisfied or will satisfy the conditions in Rule 433 under the Securities Act to
avoid a requirement to file with the Commission any electronic road show. The parties hereto agree
and understand that the content of any and all “road shows” related to the offering of the
Securities contemplated hereby is solely the property of the Company.
(f) Not an Ineligible Issuer. (1) At the time of filing the Registration Statement and (2) at
the date hereof, the Company was not and is not an “ineligible issuer,” as defined in Rule 405
under the Securities Act, without taking account of any determination by the Commission pursuant to
Rule 405 that it is not necessary that the Company be considered an ineligible issuer, including,
without limitation, for purposes of Rules 164 and 433 under the Securities Act with respect to the
offering of the Securities as contemplated by the Registration Statement.
(g) Incorporated Documents. The documents incorporated by reference in the Disclosure Package
and 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 were filed on a timely basis with the Commission and none of such
documents contained an untrue statement of a material fact or omitted to state a material fact
necessary to make the statements therein, in the light of the circumstances under which they were
made, not misleading.
(h) Due Incorporation. The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Delaware, with the corporate power and
authority to own its properties and to conduct its business as currently being carried on and as
described in the Registration Statement, the Disclosure Package and the Prospectus. The Company is
duly qualified to transact business as a foreign corporation and is in good standing under the laws
of each other jurisdiction in which its ownership or leasing of property or the conduct of its
business requires such qualification, except where the failure to be so qualified and in good
standing would not, individually or in the aggregate, result in any material adverse effect upon,
or change in, the general affairs, business, operations, properties, financial condition, or
results of operations of the Company taken as a whole (a “Material Adverse Effect”).
(i) Subsidiaries. The Company has no significant subsidiaries (as such term is defined in
Rule 1-02(w) of Regulation S-X promulgated by the Commission) and does not own any beneficial
interest, directly or indirectly, in any corporation, partnership, joint venture or other business
entity.
(j) Capitalization. All of the issued and outstanding shares of capital stock of the Company,
including the outstanding shares of Common Stock, have been duly authorized and validly issued and
are fully paid and nonassessable, have been issued in compliance with all federal and state
securities laws, were not issued in violation of any preemptive right or other rights to subscribe
for or to purchase or acquire any securities of the Company that have not been waived in writing.
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(k) The Securities. The Shares have been duly and validly authorized by the Company and, when
issued, delivered and paid for in accordance with the terms of this Agreement and the Subscription
Agreements, will have been duly and validly issued and will be fully paid and nonassessable and
will not be subject to any statutory or contractual preemptive rights or other rights to subscribe
for or to purchase or acquire any shares of Common Stock of the Company which have not been waived
or complied with. The Warrants conform, or when issued will conform, to the description thereof
contained in the Disclosure Package and the Prospectus and have been duly and validly authorized by
the Company and upon delivery to the Investors at the Closing Date will be valid and binding
obligations of the Company, enforceable in accordance with their terms, except as such
enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the rights and remedies of creditors generally or subject to general principles of
equity. The Warrant Shares initially issuable upon exercise of the Warrants have been duly and
validly authorized and reserved for issuance by the Company and when issued, delivered and paid for
in accordance with the terms thereof, will have been duly and validly issued and will be fully paid
and nonassessable and will not be subject to any statutory or contractual preemptive rights or
other rights to subscribe for or to purchase or acquire any shares of Common Stock of the Company
which have not been waived or complied with.
(l) No Registration Rights. Neither the filing of the Registration Statement nor the offering
or sale of the Securities as contemplated by this Agreement gives rise to any rights, other than
those which have been waived or satisfied, for or relating to the registration of any shares of
Common Stock or other securities of the Company which have not been waived or complied with.
(m) Description of Capital Stock. The capital stock of the Company, including the Securities,
conforms as to legal matters to the description thereof, if any, contained in the Registration
Statement, the Disclosure Package and the Prospectus, and as of the date thereof, the Company had
authorized and outstanding capital stock as set forth therein. The certificates for the Securities
are in due and proper form and the holders of the Securities will not be subject to personal
liability by reason of being such holders.
(n) Due Authorization and Enforceability. This Agreement and each Subscription Agreement
has been duly authorized, executed and delivered by the Company, and constitutes a valid, legal and
binding obligation of the Company, enforceable against the Company in accordance with its terms,
except as rights to indemnity hereunder may be limited by federal or state securities laws and
except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization
or similar laws affecting the rights of creditors generally and subject to general principles of
equity.
(o) No Violation. The Company is not in breach or violation of or in default (nor has any
event occurred which with notice, lapse of time or both would result in any breach or violation of,
or constitute a default) (i) under the provisions of its charter or bylaws or (ii) in the
performance or observance of any term, covenant, obligation, agreement or condition contained in
any indenture, mortgage, deed of trust, bank loan or credit agreement or other evidence of
indebtedness, or any license, lease, contract or other agreement or instrument to which the Company
is a party or by which any of its properties may be bound or affected, or (iii) in the performance
or observance of any statute, law, rule, regulation, ordinance, judgment, order or decree of any
court, regulatory body, administrative agency, governmental body, arbitrator or other authority
having jurisdiction over the Company or any of its properties, as applicable (including, without
limitation, those administered by the Food and Drug Administration of the U.S. Department of Health
and Human Services (the “FDA”) or by any foreign, federal, state or local governmental or
regulatory authority performing functions similar to those performed by the FDA), except, with
respect to clauses (ii) and (iii) above, to the extent any such contravention has been waived or
would not result in a Material Adverse Effect.
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(p) No Conflict. The execution, delivery and performance by the Company of this Agreement,
each Subscription Agreement and the Escrow Agreement and the consummation of the transactions
herein contemplated, including the issuance and sale by the Company of the Securities and the
issuance of the Warrant Shares upon due exercise of the Warrants in accordance with their terms,
will not conflict with or result in a breach or violation of, or constitute a default under (nor
constitute any event which with notice, lapse of time or both would result in any breach or
violation of or constitute a default under) (i) the provisions of the charter or by-laws of the
Company, (ii) any material indenture, mortgage, deed of trust, bank loan or credit agreement or
other evidence of indebtedness, or any license, lease, contract or other agreement or instrument to
which the Company is a party or by which it or any of its properties may be bound or affected, or
(iii) any federal, state, local or foreign law, regulation or rule or any decree, judgment or order
applicable to the Company.
(q) No Consents Required. No approval, authorization, consent or order of or filing with any
federal, state, local or foreign governmental or regulatory commission, board, body, authority or
agency, or of or with any self-regulatory organization or other non-governmental regulatory
authority (including, without limitation, the National Association of Securities Dealers Automated
Quotation (“Nasdaq”) Global Market, or approval of the stockholders of the Company (including such
as may be required pursuant to Rule 4350 of the Nasdaq Marketplace Rules), is required in
connection with the issuance and sale of the Securities and the issuance of the Warrant Shares upon
due exercise of the Warrants in accordance with their terms or the consummation by the Company of
the transactions contemplated hereby other than (i) as may be required under the Securities Act,
(ii) any necessary qualification of the Securities under the securities or blue sky laws of the
various jurisdictions in which the Securities are being offered by the Placement Agent and (iii)
under the rules and regulations of the Financial Industry Regulatory Authority (“FINRA”). The
Company has full power and authority to enter into this Agreement and each Subscription Agreement
and to authorize, issue and sell the Securities as contemplated by this Agreement and each
Subscription Agreement.
(r) Absence of Material Changes. Subsequent to the respective dates as of which information is
given in the Disclosure Package, (a) the Company has not incurred any material liability or
obligation, direct or contingent, or entered into any material transaction not in the ordinary
course of business; (b) the Company has not purchased any of the Company’s outstanding capital
stock, or declared, paid or otherwise made any dividend or distribution of any kind on the
Company’s capital stock; and (c) there has not been any change in the capital stock (other than a
change in the number of outstanding shares of Common Stock due to the issuance of shares upon the
exercise of outstanding options or warrants or the conversion of convertible indebtedness), or
material change in the short-term debt or long-term debt of the Company (other than upon conversion
of convertible indebtedness) or any issue of options, warrants, convertible securities or other
rights to purchase the capital stock (other than grants of stock options under the Company’s stock
option plans existing on the date hereof) of the Company, or any Material Adverse Effect.
(s) Permits. The Company possesses all necessary licenses, authorizations, consents and
approvals and has made all necessary filings required under any federal, state, local or foreign
law, regulation or rule (including, without limitation, those from the FDA, and any other foreign,
federal, state or local government or regulatory authorities performing functions similar to those
performed by the FDA), in order to conduct its business. The Company is not in violation of, or in
default under, or has received notice of any proceedings relating to revocation or modification of,
any such license, authorization, consent or approval except where such violation, default or
proceedings would not, individually or in the aggregate, have a Material Adverse Effect. The
Company is in compliance in all material respects with all applicable federal, state, local and
foreign laws, regulations, orders or decrees except where the failure to be in compliance would not
have a Material Adverse Effect.
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(t) Legal Proceedings. There are no legal or governmental proceedings pending or, to the
Company’s knowledge, threatened or contemplated to which the Company is or would be a party or of
which any of its properties is or would be subject at law or in equity, before or by any federal,
state, local or foreign governmental or regulatory commission, board, body, authority or agency, or
before or by any self-regulatory organization or other non-governmental regulatory authority
(including, without limitation, Nasdaq), except (i) as described in the Registration Statement, the
Prospectus, and the Disclosure Package, (ii) any such proceeding, which if resolved adversely to
the Company, would not result in a judgment, decree or order having, individually or in the
aggregate, a Material Adverse Effect or (iii) any such proceeding that would not prevent or
materially and adversely affect the ability of the Company to consummate the transactions
contemplated hereby. The Disclosure Package contains in all material respects the same description
of the foregoing matters contained in the Prospectus.
(u) Statutes; Contracts. There are no statutes or regulations applicable to the Company or
contracts or other documents of the Company which are required to be described in the Registration
Statement, the Disclosure Package or the Prospectus or filed as exhibits to the Registration
Statement by the Securities Act which have not been so described or filed.
(v) Independent Accountants. PricewaterhouseCoopers LLP, who have certified certain of the
financial statements of the Company, is (i) an independent public accounting firm within the
meaning of the Securities Act, (ii) a registered public accounting firm (as defined in Section
2(a)(12) of the Xxxxxxxx-Xxxxx Act of 2002 (the “Xxxxxxxx-Xxxxx Act”)), and (iii) not in violation
of the auditor independence requirements of the Xxxxxxxx-Xxxxx Act.
(w) Financial Statements. The financial statements of the Company, together with the related
schedules and notes thereto, set forth or incorporated by reference in the Registration Statement,
the Disclosure Package and the Prospectus comply in all material respects with the applicable
requirements of the Securities Act and the Exchange Act, as applicable, and present fairly in all
material respects (i) the financial condition of the Company, taken as a whole, as of the dates
indicated and (ii) the consolidated results of operations, stockholders’ equity and changes in cash
flows of the Company, taken as a whole, for the periods therein specified; and such financial
statements and related schedules and notes thereto have been prepared in conformity with United
States generally accepted accounting principles, consistently applied throughout the periods
involved (except as otherwise stated therein and subject, in the case of unaudited financial
statements, to the absence of footnotes and normal year-end adjustments). There are no other
financial statements (historical or pro forma) that are required to be included in the Registration
Statement, the Disclosure Package and the Prospectus; and the Company does not have any material
liabilities or obligations, direct or contingent (including any off-balance sheet obligations), not
disclosed in the Registration Statement, the Disclosure Package and the Prospectus; and all
disclosures contained in the Registration Statement, the Disclosure Package and the Prospectus
regarding “non-GAAP financial measures” (as such term is defined by the rules and regulations of
the Commission) comply with Regulation G of the Exchange Act and Item 10(e) of Regulation S-K under
the Securities Act, to the extent applicable, and present fairly the information shown therein and
the Company’s basis for using such measures.
(x) No Material Adverse Change. There has not been any material adverse change in the
business, properties, management, financial condition or results of operations of the Company taken
as a whole, from that set forth in the Disclosure Package (exclusive of any amendments or
supplements thereto subsequent to the date of this Agreement).
(y) Not an Investment Company. The Company is not, nor after giving effect to the offering
and sale of the Securities and the application of the proceeds thereof as described in the
Prospectus, will be required to register as an “investment company” as defined in the Investment
Company Act of 1940, as amended (the “Investment Company Act”).
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(z) Good Title to Property. The Company has good and valid title to all property (whether
real or personal) described in the Registration Statement, the Disclosure Package and the
Prospectus as being owned by it, in each case free and clear of all liens, claims, security
interests, other encumbrances or defects except such as are described in the Registration
Statement, the Disclosure Package and the Prospectus and those that would not, individually or in
the aggregate materially affect the value of such property and do not materially interfere with the
use made and proposed to be made of such property by the Company. All of the property described in
the Registration Statement, the Disclosure Package and the Prospectus as being held under lease by
the Company is held thereby under valid, subsisting and enforceable leases, without any liens,
restrictions, encumbrances or claims, except those that, individually or in the aggregate, are not
material and do not materially interfere with the use made and proposed to be made of such property
by the Company.
(aa) Intellectual Property Rights. The Company owns, or has obtained valid and enforceable
licenses for, or other rights to use, the inventions, patent applications, patents, trademarks
(both registered and unregistered), tradenames, copyrights, trade secrets and other proprietary
information described in the Registration Statement, the Disclosure Package and the Prospectus as
being owned or licensed by it or which are necessary for the conduct of its business, except where
the failure to own, license or have such rights would not, individually or in the aggregate, result
in a Material Adverse Effect (collectively, “Intellectual Property”); except as described in the
Registration Statement, the Disclosure Package and the Prospectus (i) there are no third parties
who have or, to the Company’s knowledge, will be able to establish rights to any Intellectual
Property, except for the ownership rights of the owners of the Intellectual Property which is
licensed to the Company; (ii) to the Company’s knowledge, there is no infringement by third parties
of any Intellectual Property; (iii) there is no pending or, to the Company’s knowledge, threatened
action, suit, proceeding or claim by others challenging the Company’s rights in or to, or the
validity, enforceability, or scope of, any Intellectual Property owned by or licensed to the
Company, and the Company is unaware of any facts which could form a reasonable basis for any such
claim; (iv) there is no pending or, to the Company’s knowledge, threatened action, suit, proceeding
or claim by others that the Company infringes or otherwise violates any patent, trademark,
copyright, trade secret or other proprietary rights of others, and the Company is unaware of any
facts which could form a reasonable basis for any such claim; (v) to the Company’s knowledge, there
is no patent or patent application that contains claims that interfere with the issued or pending
claims of any of the Intellectual Property; and (vi) to the Company’s knowledge, there is no prior
art that may render any patent owned by the Company invalid, nor is there any prior art known to
the Company that may render any patent application owned by the Company unpatentable.
(bb) Taxes. The Company has timely filed all material federal, state, local and foreign
income and franchise tax returns (or timely filed applicable extensions therefore) that have been
required to be filed and is not in default in the payment of any taxes which were payable pursuant
to said returns or any assessments with respect thereto, other than any which the Company is
contesting in good faith and for which adequate reserves have been provided and reflected in the
Company’s financial statements included in the Registration Statement, the Disclosure Package and
the Prospectus. The Company has no tax deficiency that has been or, to the knowledge of the
Company, might be asserted or threatened against it that would result in a Material Adverse Effect.
(cc) Insurance. The Company maintains insurance in such amounts and covering such risks as is
adequate for the conduct of its business and the value of its properties and as is customary for
companies engaged in similar businesses in similar industries. All such insurance is fully in
force on the date hereof and will be fully in force as of the Closing Date. The Company has no
reason to believe that it will not be able to renew its existing insurance coverage as and when
such coverage expires or to
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obtain similar coverage from similar insurers as may be necessary to continue its business at
a cost that would not have a Material Adverse Effect.
(dd) Accounting Controls. The Company maintains a system of internal accounting controls
sufficient to provide reasonable assurances that (i) transactions are executed in accordance with
management’s general or specific authorization; (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with generally accepted accounting
principles 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.
(ee) Disclosure Controls. The Company has established, maintains and evaluates “disclosure
controls and procedures” (as such term is defined in Rule 13a-15(e) and 15d-15(e) under the
Exchange Act), which (i) are designed to ensure that material information relating to the Company
is made known to the Company’s principal executive officer and its principal financial officer by
others within those entities, particularly during the periods in which the periodic reports
required under the Exchange Act are being prepared, (ii) have been evaluated for effectiveness as
of the end of the last fiscal period covered by the Registration Statement; and (iii) such
disclosure controls and procedures are effective to perform the functions for which they were
established. Except as described in the Registration Statement there are no significant
deficiencies and material weaknesses in the design or operation of internal controls which could
adversely affect the Company’s ability to record, process, summarize, and report financial data to
management and the Board of Directors. The Company is not aware of any fraud, whether or not
material, that involves management or other employees who have a role in the Company’s internal
controls; and since the date of the most recent evaluation of such disclosure controls and
procedures, there have been no significant changes in internal controls or in other factors that
could significantly affect internal controls, including any corrective actions with regard to
significant deficiencies and material weaknesses.
(ff) Corrupt Practices. Neither the Company nor, to the Company’s knowledge, any other person
associated with or acting on behalf of the Company, including without limitation any director,
officer, agent or employee of the Company has, directly or indirectly, while acting on behalf of
the Company (i) used any corporate funds for unlawful contributions, gifts, entertainment or other
unlawful expenses relating to political activity, (ii) made any unlawful payment to foreign or
domestic government officials or employees or to foreign or domestic political parties or campaigns
from corporate funds, (iii) violated any provision of the Foreign Corrupt Practices Act of 1977, as
amended or (iv) made any other unlawful payment that would result in a Material Adverse Effect.
(gg) No Price Stabilization. Neither the Company nor, to the Company’s knowledge, any of its
officers, directors, affiliates or controlling persons has taken or will take, directly or
indirectly, any action designed to cause or result in, or which has constituted or which might
reasonably be expected to constitute the stabilization or manipulation of the price of any security
of the Company to facilitate the sale or resale of the Securities.
(hh) No Undisclosed Relationships. No relationship, direct or indirect, exists between or
among the Company on the one hand and the directors, officers, stockholders, customers or suppliers
of the Company on the other hand which is required to be described in the Registration Statement,
the Disclosure Package and the Prospectus which has not been so described.
(ii) Xxxxxxxx-Xxxxx Act. The Company, and to its knowledge after due inquiry, all of the
Company’s directors or officers, in their capacities as such, are in compliance in all material
respects
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with all applicable effective provisions of the Xxxxxxxx-Xxxxx Act and any related rules and
regulations promulgated by the Commission.
(jj) Brokers Fees. Except as set forth in Schedule 2(jj), which fee shall be payable
out of the Placement Fee, the Company is not a party to any contract, agreement or understanding
with any person (other than this Agreement) that would give rise to a valid claim against the
Company or the Placement Agent for a brokerage commission, finder’s fee or other like payment in
connection with the offering and sale of the Securities.
(kk) Exchange Act Requirements. The Company has filed in a timely manner all reports required
to be filed pursuant to Sections 13(a), 13(e), 14 and 15(d) of the Exchange Act during the
preceding 12 months (except to the extent that Section 15(d) requires reports to be filed pursuant
to Sections 13(d) and 13(g) of the Exchange Act, which shall be governed by the next clause of this
sentence); and the Company has filed in a timely manner all reports required to be filed pursuant
to Sections 13(d) and 13(g) of the Exchange Act since January 1, 2004, except where the failure to
timely file could not reasonably be expected individually or in the aggregate to have a Material
Adverse Effect.
(ll) FINRA Affiliations. To the Company’s knowledge, there are no affiliations or
associations between (i) any member of FINRA and (ii) the Company or any of the Company’s officers,
directors or 5% or greater securityholders or any beneficial owner of the Company’s unregistered
equity securities that were acquired at any time on or after the one hundred eightieth
(180th) day immediately preceding the date the Registration Statement was initially
filed with the Commission, except as set forth in the Registration Statement, the Disclosure
Package and the Prospectus.
(mm) Compliance with Environmental Laws. The Company (i) is in compliance with any and all
applicable foreign, federal, state and local laws, orders, rules, regulations, directives, decrees
and judgments relating to the protection of human health and safety, the environment or hazardous
or toxic substances or wastes, pollutants or contaminants (“Environmental Laws”), (ii) has received
all permits, licenses or other approvals required of it under applicable Environmental Laws to
conduct its business and (iii) is in compliance with all terms and conditions of any such permit,
license or approval, except where such noncompliance with Environmental Laws, failure to receive
required permits, licenses or other approvals or failure to comply with the terms and conditions of
such permits, licenses or approvals would not, individually or in the aggregate, result in a
Material Adverse Effect. There are no costs or liabilities associated with Environmental Laws
(including, without limitation, any capital or operating expenditures required for clean-up,
closure of properties or compliance with Environmental Laws or any permit, license or approval, any
related constraints on operating activities and any potential liabilities to third parties) which
would, individually or in the aggregate, result in a Material Adverse Effect.
(nn) No Labor Disputes. Except for matters that would not, individually or in the aggregate,
result in a Material Adverse Effect (i) there is (A) no unfair labor practice complaint pending
or, to the Company’s knowledge after due inquiry, threatened against the Company before the
National Labor Relations Board, and no grievance or arbitration proceeding arising out of or under
collective bargaining agreements is pending or threatened, (B) no strike, labor dispute, slowdown
or stoppage pending or, to the Company’s knowledge after due inquiry, threatened against the
Company and (C) no union representation dispute currently existing concerning the employees of the
Company, and (ii) to the Company’s knowledge (A) no union organizing activities are currently
taking place concerning the employees of the Company and (B) there has been no violation of any
federal, state, local or foreign law relating to discrimination in the hiring, promotion or pay of
employees or any applicable wage or hour laws concerning the employees of the Company.
-11-
(oo) ERISA. The Company is in compliance in all material respects with all presently
applicable provisions of the Employee Retirement Income Security Act of 1974, as amended, including
the regulations and published interpretations thereunder (“ERISA”); no “reportable event” (as
defined in ERISA) has occurred with respect to any “pension plan” (as defined in ERISA) for which
the Company would have any liability; the Company has not incurred and does not expect to incur
liability under (i) Title IV of ERISA with respect to termination of, or withdrawal from, any
“pension plan” or (ii) Sections 412 or 4971 of the Internal Revenue Code of 1986, as amended,
including the regulations and published interpretations thereunder (the “Code”); and each “pension
plan” for which the Company would have any liability that is intended to be qualified under Section
401(a) of the Code is so qualified in all material respects and nothing has occurred, whether by
action or by failure to act, which would cause the loss of such qualification.
(pp) Nasdaq; Exchange Act Registration. The Common Stock is registered pursuant to Section
12(b) or 12(g) of the Exchange Act and is accepted for quotation on the Nasdaq Global Market, and
the Company has taken no action designed to, or likely to have the effect of, termination the
registration of the Common Stock under the Exchange Act or delisting the Common Stock from the
Nasdaq Global Market, nor has the Company received any notification that the Commission or FINRA is
contemplating terminating such registration or listing. The Company has complied in all material
respects with the applicable requirements of the Nasdaq Global Market for maintenance of inclusion
of the Common Stock thereon.
(qq) FINRA Review. To enable the Placement Agent to rely on Rule 2710(b)(7)(C)(i) of FINRA,
the registration of the Securities registered with the Commission could have been affected on Form
S-3 under the Securities Act pursuant to the standards for such Form S-3 in effect prior to October
21, 1992.
(rr) Statistical or Market-Related Data. Any statistical, industry-related and market-related
data included or incorporated by reference in the Registration Statement, the Disclosure Package
and the Prospectus, are based on or derived from sources that the Company reasonably and in good
faith believes to be reliable and accurate, and such data agree with the sources from which they
are derived.
(ss) Clinical Studies. The clinical, pre-clinical and other studies and tests conducted by or
on behalf of or sponsored by the Company or in which the Company or products or product candidates
have participated that are described in the Registration Statement, the Disclosure Package and the
Prospectus were and, if still pending, are being conducted in accordance in all material respects
with all statutes, laws, rules and regulations, as applicable (including, without limitation, those
administered by the FDA or by any foreign, federal, state or local governmental or regulatory
authority performing functions similar to those performed by the FDA) and with standard medical and
scientific research procedures. The descriptions in the Registration Statement, the Disclosure
Package and the Prospectus of the results of such studies and tests are accurate and complete in
all material respects and fairly present the published data derived from such studies and tests.
The Company has not received any notices or other correspondence from the FDA or any other foreign,
federal, state or local governmental or regulatory authority performing functions similar to those
performed by the FDA with respect to any ongoing clinical or pre-clinical studies or tests
requiring the termination, suspension or material modification of such studies or tests, which such
termination, suspension or material modification would reasonably be expected to result in a
Material Adverse Effect. The Company is in compliance with all applicable federal, state, local
and foreign laws, regulations, orders and decrees governing its business as prescribed by the FDA,
or any other federal, state or foreign agencies or bodies, including those bodies and agencies
engaged in the regulation of pharmaceuticals or biohazardous substances or materials, except where
noncompliance would not, singly or in the aggregate, result in a Material Adverse Effect.
-12-
Any certificate signed by any officer of the Company and delivered to the Placement Agent or
to counsel for the Placement Agent in connection with the offering of the Securities shall be
deemed a representation and warranty by the Company to the Placement Agent and the Investors as to
the matters covered thereby.
3. Covenants. The Company covenants and agrees with the Placement Agent as follows:
(a) Reporting Obligations; Exchange Act Compliance. The Company will (i) file the Preliminary
Prospectus and the Prospectus with the Commission within the time periods specified by Rule 424(b)
and Rules 430A, 430B and 430C, as applicable under the Securities Act, (ii) file any Issuer Free
Writing Prospectus to the extent required by Rule 433 under the Securities Act, if applicable,
(iii) 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 during such period as the Prospectus
would be required by law to be delivered (whether physically or through compliance with Rule 172
under the Securities Act or any similar rule) (the “Prospectus Delivery Period”), and (iv) furnish
copies of each Issuer Free Writing Prospectus, if any, (to the extent not previously delivered) to
the Placement Agent prior to 11:00 a.m. Eastern time, on the second business day next succeeding
the date of this Agreement in such quantities as the Placement Agent shall reasonably request.
(b) Abbreviated Registration Statement. If the Company elects to rely upon Rule 462(b) under
the Securities Act, the Company shall file a registration statement under Rule 462(b) with the
Commission in compliance with Rule 462(b) by 8:00 a.m., Eastern time, on the business day next
succeeding the date of this Agreement, and the Company shall at the time of filing either pay to
the Commission the filing fee for such Rule 462(b) registration statement or give irrevocable
instructions for the payment of such fee pursuant to the Rules and Regulations.
(c) Amendments or Supplements. The Company will not, during the Prospectus Delivery Period in
connection with the offering contemplated by this Agreement, file any amendment or supplement to
the Registration Statement or the Prospectus unless a copy thereof shall first have been submitted
to the Placement Agent within a reasonable period of time prior to the filing thereof and the
Placement Agent shall not have reasonably objected thereto in good faith.
(d) Free Writing Prospectuses; Final Term Sheet. The Company will (i) not make any offer
relating to the Securities that would constitute an “issuer free writing prospectus” (as defined in
Rule 433) or that would otherwise constitute a “free writing prospectus” (as defined in Rule 405
under the Securities Act) required to be filed by the Company with the Commission under Rule 433
under the Securities Act unless the Placement Agent approves its use in writing prior to first use
(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 General Free
Writing Prospectus(es) included in Schedule I hereto, (ii) treat each Permitted Free
Writing Prospectus as an Issuer Free Writing Prospectus, (iii) comply with the requirements of
Rules 164 and 433 under the Securities Act applicable to any Issuer Free Writing Prospectus,
including the requirements relating to timely filing with the Commission, legending and record
keeping and (iv) 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) under the Securities Act a free
writing prospectus prepared by or on behalf of such Placement Agent that such Placement Agent
otherwise would not have been required to file thereunder. The Company will satisfy the conditions
in Rule 433 under the Securities Act to avoid a requirement to file with the Commission any
electronic road show.
-13-
The Company has prepared or will prepare a final term sheet (the “Final Term Sheet”)
reflecting the final terms of the Securities, in form and substance satisfactory to the Placement
Agent, and shall file such Final Term Sheet as an Issuer Free Writing Prospectus pursuant to Rule
433 under the Securities Act prior to the close of business two business days after the date
hereof; provided that the Company shall provide the Placement Agent with copies of any such Final
Term Sheet within a reasonable amount of time prior to such proposed filing and will not use or
file any such document to which the Placement Agent or counsel to the Placement Agent shall
reasonably object.
(e) Notice to Placement Agent. The Company will notify the Placement Agent promptly, and
will, if requested, confirm such notification in writing: (i) the receipt of any comments of, or
requests for additional information from, the Commission; (ii) the time and date of any filing of
any post-effective amendment to the Registration Statement or any amendment or supplement to the
Disclosure Package or the Prospectus, (iii) the time and date when any post-effective amendment to
the Registration Statement becomes effective, but only during the Prospectus Delivery Period; (iv)
of the issuance by the Commission of any stop order suspending the effectiveness of the
Registration Statement, or any post-effective amendment thereto or any order preventing or
suspending the use of any Preliminary Prospectus, the Disclosure Package, the Prospectus or any
Issuer Free Writing Prospectus, or the initiation of any proceedings for that purpose or the threat
thereof, but only during the Prospectus Delivery Period; (v) of receipt by the Company of any
notification with respect to any suspension or the approval of the Shares and Warrant Shares from
any securities exchange upon which it is listed for trading or included or designated for
quotation, or the initiation or threatening of any proceeding for such purpose. The Company will
use its reasonable best efforts to prevent the issuance or invocation of any such stop order or
suspension by the Commission and, if any such stop order or suspension is so issued or invoked, to
obtain as soon as possible the withdrawal or removal thereof.
(f) Filing of Amendments or Supplements. If, during the Prospectus Delivery Period, any event
shall occur or condition exist as a result of which it is necessary to amend or supplement the
Prospectus (or, if the Prospectus is not yet available to prospective purchasers, the Disclosure
Package) in order to make the statements therein, in the light of the circumstances when the
Prospectus (or, if the Prospectus is not yet available to prospective purchasers, the Disclosure
Package) is delivered to an Investor, not misleading, or if, in the opinion of counsel for the
Placement Agent, it is necessary to amend or supplement the Prospectus (or, if the Prospectus is
not yet available to prospective purchasers, the Disclosure Package) to comply with applicable law,
forthwith to prepare, file with the Commission and furnish, at its own expense, to the Placement
Agent, either amendments or supplements to the Prospectus (or, if the Prospectus is not yet
available to prospective purchasers, the Disclosure Package) so that the statements in the
Prospectus (or, if the Prospectus is not yet available to prospective purchasers, the Disclosure
Package) as so amended or supplemented will not, in the light of the circumstances when the
Prospectus (or, if the Prospectus is not yet available to prospective purchasers, the Disclosure
Package) is delivered to an Investor, be misleading or so that the Prospectus (or, if the
Prospectus is not yet available to prospective purchasers, the Disclosure Package), as amended or
supplemented, will comply with law. 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 would conflict with the information contained in the Registration
Statement relating to the Securities or included or would include an untrue statement of a material
fact or omitted or would omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances prevailing at that subsequent time, not misleading, the
Company promptly will notify the Placement Agent and will promptly amend or supplement, at its own
expense, such Issuer Free Writing Prospectus to eliminate or correct such conflict, untrue
statement or omission.
(g) Delivery of Copies. The Company will deliver promptly to the Placement Agent and its
counsel such number of the following documents as the Placement Agent shall reasonably request:
-14-
(i) conformed copies of the Registration Statement as originally filed with the Commission and
each amendment thereto (in each case excluding exhibits), (ii) copies of any Preliminary Prospectus
or Issuer Free Writing Prospectus, (iii) during the Prospectus Delivery Period, copies of the
Prospectus (or any amendments or supplements thereto); (iii) any document incorporated by reference
in the Prospectus (other than any such document that is filed with the Commission electronically
via XXXXX or any successor system) and (iv) all correspondence to and from, and all documents
issued to and by, the Commission in connection with the registration of the Securities under the
Securities Act.
(h) Blue Sky Laws. The Company will promptly take from time to time such actions as the
Placement Agent may reasonably request to qualify the Securities for offering and sale under the
state securities, or blue sky, laws of such states or other jurisdictions as the Placement Agent
may reasonably request and to maintain such qualifications in effect so long as the Placement Agent
may request for the distribution of the Securities, provided, that in no event shall the Company be
obligated to qualify as a foreign corporation in any jurisdiction in which it is not so qualified
or to file a general consent to service of process in any jurisdiction or subject itself to
taxation as doing business in any jurisdiction. The Company will advise the Placement Agent
promptly of the suspension of the qualification or registration of (or any exemption relating to)
the Securities for offering, sale or trading in any jurisdiction or any initiation or threat of any
proceeding for any such purpose, and in the event of the issuance of any order suspending such
qualification, registration or exemption, the Company shall use its best efforts to obtain the
withdrawal thereof at the earliest possible moment.
(i) Earnings Statement. As soon as practicable, but in any event not later than 15 months
after the end of the Company’s current fiscal quarter, the Company will make generally available to
holders of its securities and deliver to the Placement Agent, an earnings statement of the Company
(which need not be audited) that will satisfy the provisions of Section 11(a) and Rule 158 of the
Securities Act.
(j) Use of Proceeds. The Company will apply the net proceeds from the sale of the Securities
in the manner set forth in the Registration Statement, Disclosure Package and the Prospectus under
the heading “Use of Proceeds”.
(k) Lock-Up Agreements. The Company will cause each of its executive officers and directors
and certain of its stockholders whose names are set forth on Exhibit C hereto to furnish to
the Placement Agent, on the date hereof, a letter, substantially in the form of Exhibit B
hereto (the “Lock-Up Agreement”). The Company will enforce the terms of each Lock-Up Agreement and
issue stop transfer instructions to the transfer agent for the Common Stock with respect to any
transaction or contemplated transaction that would constitute a breach or default under the
applicable Lock-Up Agreement.
(l) Public Communications. Prior to the Closing Date, the Company will not issue any press
release or other communication directly or indirectly or hold any press conference with respect to
the Company, its condition, financial or otherwise, or the earnings, business, operations or
prospects of any of the Company, or the offering of the Securities, without the prior written
consent of the Placement Agent, unless in the reasonable judgment of the Company and its counsel,
and after notification to the Placement Agent, such press release or communication is required by
law, in which case the Company shall use its reasonable best efforts to allow the Placement Agent
reasonable time to comment on such release or other communication in advance of such issuance.
(m) Lock-Up Period. For a period of 90 days after the date hereof (the “Lock-Up Period”), the
Company will not directly or indirectly, (1) offer to sell, hypothecate, pledge, announce the
intention to sell, sell, contract to sell, sell any option or contract to purchase, purchase any
option or contract to sell, grant any option, right or warrant to purchase or otherwise transfer or
dispose of, directly
-15-
or indirectly, or establish or increase a put equivalent position or liquidate or decrease a
call equivalent position within the meaning of Section 16 of the Exchange Act, with respect to, any
shares of Common Stock, any securities convertible into or exercisable or exchangeable for Common
Stock; (2) file or cause to become effective a registration statement under the Securities Act
relating to the offer and sale of any shares of Common Stock or securities convertible into or
exercisable or exchangeable for Common Stock or (3) enter into any swap or other agreement that
transfers, in whole or in part, any of the economic consequences of ownership of the Common Stock,
whether any such transaction described in clause (1), (2) or (3) above is to be settled by delivery
of Common Stock or such other securities, in cash or otherwise, without the prior written consent
of the Placement Agent (which consent may be withheld in its sole discretion), other than (i) the
Securities to be sold hereunder, (ii) the issuance of employee stock options pursuant to stock
option plans described in the Registration Statement (excluding the exhibits thereto) and the
Disclosure Package and the Prospectus, (iii) issuances of Common Stock upon the exercise of options
or warrants disclosed as outstanding in the Registration Statement (excluding the exhibits thereto)
and the Disclosure Package and the Prospectus or upon the conversion or exchange of convertible or
exchangeable securities outstanding as of the date of this Agreement; (iv) the issuance by the
Company of any shares of Common Stock as consideration for mergers, acquisitions, other business
combinations, or strategic alliances, occurring after the date of this Agreement; provided that
each recipient of shares pursuant to this clause (iv) agrees that all such shares remain subject to
restrictions substantially similar to those contained in this subsection 3(m); or (v) the
purchase or sale of the Company’s securities pursuant to a plan, contract or instruction that
satisfies all of the requirements of Rule 10b5-1(c)(1)(i)(B) that was in effect prior to the date
hereof. Notwithstanding the foregoing, for the purpose of allowing the Placement Agent to comply
with FINRA Rule 2711(f)(4), if (1) during the last 17 days of the Lock-Up Period, the Company
releases earnings results or publicly announces other material news or a material event relating to
the Company occurs or (2) prior to the expiration of the Lock-Up Period, the Company announces that
it will release earnings results during the 16 day period beginning on the last day of the Lock-Up
Period, then in each case the Lock-Up Period will be extended until the expiration of the 18 day
period beginning on the date of release of the earnings results or the public announcement
regarding the material news or the occurrence of the material event, as applicable, unless the
Placement Agent waives, in writing, such extension. The Company agrees not to accelerate the
vesting of any option or warrant or the lapse of any repurchase right prior to the expiration of
the Lock-Up Period.
(n) Stabilization. The Company will not take directly or indirectly any action designed, or
that might reasonably be expected to cause or result in, or that will constitute, stabilization or
manipulation of the price of any security of the Company to facilitate the sale or resale of any of
the Securities.
(o) Transfer Agent. The Company shall engage and maintain, at its expense, a transfer agent
and, if necessary under the jurisdiction of incorporation of the Company, a registrar for the
Shares and Warrant Shares.
(p) Listing. The Company shall use its best efforts to cause the Shares and Warrant Shares to
be listed for quotation on the Nasdaq Global Market and to maintain such listing.
(q) Investment Company Act. The Company shall not invest, or otherwise use the proceeds
received by the Company from its sale of the Securities in such a manner as would require the
Company to register as an investment company under the Investment Company Act.
(r) Xxxxxxxx-Xxxxx Act. The Company will comply with all effective applicable provisions of
the Sarbanes Oxley Act.
-16-
(s) Periodic Reports. The Company will file with the Commission such periodic and special
reports as required by the Securities Act.
(t) Reservation of Warrant Shares. The Company shall reserve and keep available at all times
a sufficient number of shares of Common Stock for the purpose of enabling the Company to issue the
Warrant Shares.
4. Costs and Expenses. The Company, whether or not the transactions contemplated hereunder
are consummated or this Agreement is terminated, will pay or reimburse if paid by the Placement
Agent all costs and expenses incident to the performance of the obligations of the Company under
this Agreement and in connection with the transactions contemplated hereby, including but not
limited to costs and expenses of or relating to (i) the preparation, printing, filing, delivery and
shipping of the Registration Statement, any Issuer Free Writing Prospectus, each Preliminary
Prospectus, the Disclosure Package and the Prospectus, and any amendment or supplement to any of
the foregoing and the printing and furnishing of copies of each thereof to the Placement Agent and
dealers (including costs of mailing and shipment), (ii) the registration, issue, sale and delivery
of the Securities including any stock or transfer taxes and stamp or similar duties payable upon
the sale, issuance or delivery of the Securities and the printing, delivery, and shipping of the
certificates representing the Securities, (iii) the registration or qualification of the Securities
for offer and sale under the securities or Blue Sky laws of such jurisdictions designated pursuant
to Section 3(h), (including the reasonable legal fees and filing fees, and other
disbursements of counsel to the Placement Agent in connection therewith), and, if reasonably
requested by the Placement Agent, the preparation and printing and furnishing of copies of any blue
sky surveys to the Placement Agent and to dealers, (iv) the fees and expenses of any transfer agent
or registrar for the Shares and Warrant Shares, (v) any filings required to be made by the
Placement Agent or the Company with FINRA, and the reasonable fees, disbursements and other charges
of counsel for the Placement Agent in connection with FINRA’s review and approval of the Placement
Agent’s participation in the offering (including all COBRADesk fees), (vi) fees, disbursements and
other charges of counsel to the Company, (vii) listing fees, if any, for the listing or quotation
of the Shares and Warrant Shares on the Nasdaq Global Market, (viii) fees and disbursements of the
Company’s auditor incurred in delivering the letter(s) described in Section 5(j) of this
Agreement, (ix) the costs and expenses of the Company and the Placement Agent in connection with
the marketing of the offering and the sale of the Securities to prospective investors including,
but not limited to, those related to any presentations or meetings undertaken in connection
therewith including, without limitation, expenses associated with the production of road show
slides and graphics, fees and expenses of any consultants engaged with the written consent of the
Company in connection with the road show presentations, travel, lodging and other expenses incurred
by the officers of the Company and any such consultants, and the cost of any aircraft or other
transportation chartered in connection with the road show, (x) the fees, disbursements and other
charges of counsel to the Placement Agent (in addition to (iii) and (v) above) in an amount not to
exceed $50,000, and (xi) fees of the Escrow Agent. It is understood, however, that except as
provided in this Section 4, Section 6 and Section 8(b), the Placement Agent
shall pay all of its own expenses, including, without limitation, the fees and disbursements of its
counsel.
5. Conditions of Placement Agent’s Obligations. The obligations of the Placement Agent
hereunder are subject to the following conditions:
(a) Filings with the Commission. The Prospectus shall have been filed with the Commission
pursuant to Rule 424(b) under the Securities Act at or before 5:30 p.m., Eastern time, on the
second full business day after the date of this Agreement (or such earlier time as may be required
under the Securities Act).
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(b) Abbreviated Registration Statement. If the Company has elected to rely upon Rule 462(b),
the registration statement filed under Rule 462(b) shall have become effective under the Securities
Act by 8:00 a.m., Eastern time, on the business day next succeeding the date of this Agreement.
(c) No Stop Orders. Prior to the Closing: (i) no stop order suspending the effectiveness of
the Registration Statement shall have been issued under the Securities Act and no proceedings
initiated under Section 8(d) or 8(e) of the Securities Act for that purpose shall be pending or
threatened by the Commission, (ii) no order suspending the qualification or registration of the
Securities under the securities or blue sky laws of any jurisdiction shall be in effect, and (iii)
any request for additional information on the part of the Commission (to be included in the
Registration Statement, the Disclosure Package, the Prospectus or any Issuer Free Writing
Prospectus or otherwise) shall have been complied with to the satisfaction of the Placement Agent.
(d) Action Preventing Issuance. No action shall have been taken and no statute, rule,
regulation or order shall have been enacted, adopted or issued by any governmental agency or body
which would, as of the Closing Date, prevent the issuance or sale of the Securities; and no
injunction, restraining order or order of any other nature by any federal or state court of
competent jurisdiction shall have been issued as of the Closing Date which would prevent the
issuance or sale of the Securities.
(e) Objection of the Placement Agent. No Prospectus or amendment or supplement to the
Registration Statement shall have been filed to which the Placement Agent shall have objected in
writing, which objection shall not be unreasonable. The Placement Agent shall not have advised the
Company that the Registration Statement, the Disclosure Package or the Prospectus, or any amendment
thereof or supplement thereto, or any Issuer Free Writing Prospectus contains an untrue statement
of fact which, in its opinion, is material, or omits to state a fact which, in its opinion, is
material and is required to be stated therein or necessary to make the statements therein, in light
of the circumstances under which they were made, not misleading.
(f) No Material Adverse Change. Prior to the Closing, there shall not have occurred any
change, or any development involving a prospective change, in the condition, financial or
otherwise, or in the earnings, business, operations or prospects of the Company, taken as a whole,
from that set forth in the Disclosure Package and the Prospectus that, in the Placement Agent’s
judgment, is material and adverse and that makes it, in the Placement Agent’s judgment,
impracticable to market the Securities on the terms and in the manner contemplated in the
Disclosure Package.
(g) Representations and Warranties. Each of the representations and warranties of the Company
contained herein shall be true and correct when made and on and as of the Closing Date, as if made
on such date (except that those representations and warranties that address matters only as of a
particular date shall remain true and correct as of such date), and all covenants and agreements
herein contained to be performed on the part of the Company and all conditions herein contained to
be fulfilled or complied with by the Company at or prior to the Closing Date shall have been duly
performed, fulfilled or complied with.
(h) Opinion of Counsel to the Company. The Placement Agent shall have received from Xxxxx
Xxxxxxx Xxxxxxx Israels LLP, counsel to the Company, such counsel’s written opinion, addressed to
the Placement Agent and the Investors and dated the Closing Date, in form and substance reasonably
satisfactory to the Placement Agent as is set forth on Exhibit D attached hereto.
(i) Opinion of Counsel to the Placement Agent. The Placement Agent shall have received from
Xxxxxxxxxx Xxxxxxx PC, such opinion or opinions, dated the Closing Date and addressed to the
Placement Agent, covering such matters as are customarily covered in transactions of this type.
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(j) Accountant’s Comfort Letter. The Placement Agent shall have received on the date of the
Time of Sale, a letter dated the date hereof, (the “Original Letter”), addressed to the Placement
Agent and in form and substance reasonably satisfactory to the Placement Agent and its counsel,
from PricewaterhouseCoopers LLP, which letter shall cover, without limitation, the various
financial disclosures, if any, contained in the Disclosure Package and shall contain statements and
information of the type customarily included in accountants’ “comfort letters” to underwriters,
delivered according to Statement of Auditing Standards No. 72 and Statement of Auditing Standard
No. 100 (or successor bulletins), with respect to the audited and unaudited financial statements
and certain financial information contained in or incorporated by reference into the Registration
Statement, the Disclosure Package and the Prospectus. At the Closing Date, the Placement Agent
shall have received from PricewaterhouseCoopers LLP a letter, dated the Closing Date, which shall
confirm, on the basis of a review in accordance with the procedures set forth in the Original
Letter, that nothing has come to their attention during the period from the date of the Original
Letter referred to in the prior sentence to a date (specified in the letter) not more than three
days prior to the Closing Date which would require any change in the Original Letter if it were
required to be dated and delivered at the Closing Date.
(k) Officer’s Certificate. The Placement Agent shall have received on the Closing Date a
certificate, addressed to the Placement Agent and dated the Closing Date, of the chief executive or
chief operating officer and the chief financial officer or chief accounting officer of the Company
to the effect that:
(i) each of the representations, warranties and agreements of the Company in this Agreement
were true and correct when originally made and are true and correct as of the Time of Sale and the
Closing Date; and the Company has complied with all agreements and satisfied all the conditions on
its part required under this Agreement to be performed or satisfied at or prior to the Closing
Date;
(ii) subsequent to the respective dates as of which information is given in the Disclosure
Package, there has not been (A) a material adverse change or any development involving a
prospective material adverse change in the general affairs, business, prospects, properties,
management, financial condition or results of operations of the Company, taken as a whole, (B) any
transaction that is material to the Company taken as a whole, except transactions entered into in
the ordinary course of business, (C) any obligation, direct or contingent, that is material to the
Company taken as a whole, incurred by the Company, except obligations incurred in the ordinary
course of business, (D) except as disclosed in the Disclosure Package and in the Prospectus, any
change in the capital stock (other than a change in the number of outstanding shares of Common
Stock due to the issuance of shares upon the exercise of outstanding options or warrants or the
conversion of outstanding convertible securities) or any material change in the short term or long
term indebtedness of the Company taken as a whole (other than as a result of the conversion of
outstanding convertible indebtedness), (E) any dividend or distribution of any kind declared, paid
or made on the capital stock of the Company or (F) any loss or damage (whether or not insured) to
the property of the Company which has been sustained or will have been sustained which has had or
is reasonably likely to result in a Material Adverse Effect.
(iii) no stop order suspending the effectiveness of the Registration Statement or any part
thereof or any amendment thereof or the qualification of the Securities for offering or sale, nor
suspending or preventing the use of the Disclosure Package, the Prospectus or any Issuer Free
Writing Prospectus shall have been issued, and no proceedings for that purpose shall be pending or
to their knowledge, threatened by the Commission or any state or regulatory body; and
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(iv) the signers of said certificate have reviewed the Registration Statement, the Disclosure
Package and the Prospectus, and any amendments thereof or supplements thereto (and any documents
filed under the Exchange Act and deemed to be incorporated by reference into the Disclosure Package
and the Prospectus), and (A) (i) each part of the Registration Statement and any amendment thereof
do not and did not contain when the Registration Statement (or such amendment) became effective,
any untrue statement of a material fact or omit to state, and did not omit to state when the
Registration Statement (or such amendment) became effective, any material fact required to be
stated therein or necessary to make the statements therein not misleading and (ii) as of the Time
of Sale, neither the Disclosure Package nor any individual Issuer Limited Use Free Writing
Prospectus, when considered together with the Disclosure Package, contained any untrue statement of
material fact or omits to state any material fact necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading and (iii) the Prospectus, as
amended or supplemented, does not and did not contain, as of its issue date, any untrue statement
of material fact or omit to state and did not omit to state as of such date, a material fact
necessary to make the statements therein, in light of the circumstances under which they were made,
not misleading, and (B) since the Time of Sale, there has occurred no event required to be set
forth in an amendment or supplement to the Registration Statement, the Disclosure Package or the
Prospectus which has not been so set forth and there has been no document required to be filed
under the Exchange Act that upon such filing would be deemed to be incorporated by reference in to
the Disclosure Package and into the Prospectus that has not been so filed.
(l) Secretary’s Certificate. On the Closing Date, the Company shall have furnished to the
Placement Agent a Secretary’s Certificate of the Company.
(m) The Nasdaq Global Market. The Shares and Warrant Shares shall have been listed and
authorized for trading on the Nasdaq Global Market.
(n) Other Filings with the Commission. The Company shall have prepared and filed with the
Commission a Current Report on Form 8-K with respect to the transactions contemplated hereby,
including as an exhibit thereto this Agreement and any other documents relating thereto.
(o) No FINRA Objection. FINRA shall not have raised any objection with respect to the
fairness and reasonableness of the placement agency terms and arrangements relating to the issuance
and sale of the Securities.
(p) Lock-Up Agreements. The Placement Agent shall have received copies of the executed
Lock-Up Agreements executed by each person listed on Exhibit B hereto, and such Lock-Up
Agreements shall be in full force and effect on the Closing Date.
(q) Additional Documents. Prior to the Closing Date, the Company shall have furnished to the
Placement Agent such further information, certificates or documents as the Placement Agent shall
have reasonably requested for the purpose of enabling it to pass upon the issuance and sale of the
Securities as contemplated herein, or in order to evidence the accuracy of any of the
representations and warranties, or the satisfaction of any of the conditions or agreements, herein
contained.
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.
If any condition specified in this Section 5 is not satisfied when and as required to be
satisfied, this Agreement may be terminated by the Placement Agent by notice to the Company at any
time prior to the Closing Date, which termination shall be without liability on the part of any
party to any other party,
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except that Section 4, Section 6 and Section 8 shall at all times be
effective and shall survive such termination.
6. Indemnification and Contribution.
(a) Indemnification of the Placement Agent. The Company agrees to indemnify, defend and hold
harmless the Placement Agent, its directors and officers, and each person, if any, who controls
such Placement Agent within the meaning of either Section 15 of the Securities Act or Section 20 of
the Exchange Act, and the successors and assigns of all of the foregoing persons, from and against
any loss, damage, claim or liability, which, jointly or severally, the Placement Agent or any such
person may become subject under the Securities Act, the Exchange Act, or other federal or state
statutory law or regulation, the common law or otherwise, (including in settlement of any
litigation, if such settlement is effected with the written consent of the Company), insofar as
such loss, damage, claim or liability (or actions in respect thereof as contemplated below) arises
out of or is based upon: (i) any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement, or any amendment thereto or the omission or alleged
omission to state a material fact required to be stated therein or necessary to make the statements
therein not misleading; (ii) any untrue statement or alleged untrue statement of a material fact
contained in any Preliminary Prospectus, any Issuer Free Writing Prospectus or the Prospectus (or
any amendment or supplement thereto), or the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements made therein, in
light of the circumstances under which they were made, not misleading; and, in the case of (i) and
(ii) above, to reimburse the Placement Agent and each such controlling person for any and all
reasonable expenses (including reasonable fees and disbursements of counsel) as such expenses are
incurred by such Placement Agent or such controlling person in connection with investigating,
defending, settling, compromising or paying any such loss, claim, damage, liability, expense or
action; provided, however, that the foregoing indemnity shall not apply to any loss, claim, damage,
liability or expense to the extent, but only to the extent, it arises out of or is based upon any
untrue statement or alleged untrue statement of a material fact contained in or omitted from, and
in conformity with information concerning the Placement Agent furnished in writing by or on behalf
of the Placement Agent to the Company expressly for use therein, which information the parties
hereto agree is limited to the Placement Agent Information, (iii) any untrue statement or alleged
untrue statement made by the Company in Section 3 hereof or the failure by the Company to
perform when and as required any agreement or covenant contained herein or (iv) any untrue
statement or alleged untrue statement of any material fact contained in any audio or visual
materials provided to Investors by or with the approval of the Company or based upon written
information furnished by or on behalf of the Company including, without limitation, slides, videos,
films or tape recordings used in any road show or investor presentations made to investors by the
Company (whether in person or electronically) or in connection with the marketing of the
Securities.
(b) Indemnification of the Company. The Placement Agent will indemnify, defend and hold
harmless the Company, its directors and officers, and any person, if any, who controls the Company
within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act,
and the successors and assigns of all of the foregoing persons, from and against any loss, claim,
damage, liability or expense, as incurred to which, jointly or severally, the Company or any such
person may become subject under the Securities Act, the Exchange Act, or other federal or state
statutory law or regulation, the common law or otherwise (including in settlement of any
litigation, if such settlement is effected with the written consent of the Placement Agent),
insofar as such loss, claim, damage, liability or expense (or actions in respect thereof as
contemplated below) arises out of or is based upon (i) any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement, or any amendment thereto, or
the omission or alleged omission therefrom to state a material fact required to be stated therein
or necessary to make the statements therein not misleading; (ii) any untrue statement or alleged
untrue statement of a material fact contained in any Preliminary Prospectus, any Issuer Free
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Writing Prospectus or the Prospectus (or any amendment or supplement thereto), or the omission
or alleged omission to state therein a material fact required to be stated therein or necessary to
make the statements made therein, in light of the circumstances under which they were made, not
misleading, in the case of each of (i) and (ii) above, to the extent but only to the extent, that
such untrue statement or alleged untrue statement or omission or alleged omission was made in the
Registration Statement, any Preliminary Prospectus, Issuer Free Writing Prospectus or the
Prospectus (or any amendment or supplement thereto) in reliance upon and in conformity with
information concerning the Placement Agent furnished in writing by or on behalf of the Placement
Agent to the Company expressly for use therein and to reimburse the Company, or any such director,
officer or controlling person for any legal and other expense reasonably incurred by the Company,
or any such director, officer or controlling person in connection with investigating, defending,
settling, compromising or paying any such loss, claim, damage, liability, expense or action;
provided, that the parties hereto hereby agree that such written information provided by the
Placement Agent consists solely of the Placement Agent Information. Notwithstanding the provisions
of this Section 6(b), in no event shall any indemnity by the Placement Agent under this
Section 6(b) exceed the total compensation received by such Placement Agent in accordance
with Section 1(b).
(c) Notice and Procedures. If any action, suit or proceeding (each, a “Proceeding”) is
brought against a person (an “indemnified party”) in respect of which indemnity may be sought
against the Company or the Placement Agent (as applicable, the “indemnifying party”) pursuant to
subsection (a) or (b), respectively, of this Section 6, such indemnified
party shall promptly notify such indemnifying party in writing of the institution of such
Proceeding and such indemnifying party shall assume the defense of such Proceeding, including the
employment of counsel reasonably satisfactory to such indemnified party and payment of all fees and
expenses; provided, however, that the omission to so notify such indemnifying party shall not
relieve such indemnifying party from any liability which such indemnifying party may have to any
indemnified party or otherwise, except to the extent the indemnifying party does not otherwise
learn of the Proceeding and such failure results in the forfeiture by the indemnifying party of
substantial rights or defenses. The indemnified party or parties shall have the right to employ its
or their own counsel in any such case, but the fees and expenses of such counsel shall be at the
expense of such indemnified party or parties unless (i) the employment of such counsel shall have
been authorized in writing by the indemnifying party in connection with the defense of such
Proceeding, (ii) the indemnifying party shall not have, within a reasonable period of time in light
of the circumstances, employed counsel to defend such Proceeding or (iii) such indemnified party or
parties shall have reasonably concluded that there may be defenses available to it or them which
are different from, additional to or in conflict with those available to such indemnifying party
(in which case such indemnifying party shall not have the right to direct the defense of such
Proceeding on behalf of the indemnified party or parties ), in any of which events such reasonable
fees and expenses shall be borne by such indemnifying party and paid as incurred (it being
understood, however, that such indemnifying party shall not be liable for the expenses of more than
one separate counsel (in addition to any local counsel) in any one Proceeding or series of related
Proceedings in the same jurisdiction representing the indemnified parties who are parties to such
Proceeding). An indemnifying party shall not be liable for any settlement of any Proceeding
effected without its written consent but, if settled with its written consent or if there be a
final judgment for the plaintiff, such indemnifying party agrees to indemnify and hold harmless the
indemnified party or parties from and against any loss or liability by reason of such settlement or
judgment. Notwithstanding the foregoing sentence, if at any time an indemnified party shall have
requested an indemnifying party to reimburse the indemnified party for fees and expenses of counsel
as contemplated by the second sentence of this Section 6(c), then the indemnifying party
agrees that it shall be liable for any settlement of any Proceeding effected without its written
consent if (i) such settlement is entered into more than 60 days after receipt by such indemnifying
party of the aforesaid request, (ii) such indemnifying party shall not have fully reimbursed the
indemnified party in accordance with such request prior to the date of such settlement and (iii)
such indemnified party shall have given the indemnifying
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party at least 30 days’ prior notice of its intention to settle. No indemnifying party shall,
without the prior written consent of the indemnified party, effect any settlement, compromise or
consent to the entry of judgment in any pending or threatened Proceeding in respect of which any
indemnified party is or could have been a party and indemnity could have been sought hereunder by
such indemnified party, unless such settlement includes an unconditional release of such
indemnified party from all liability on claims that are the subject matter of such Proceeding and
does not include an admission of fault or culpability or a failure to act by or on behalf of such
indemnified party.
(d) Contribution. If the indemnification provided for in this Section 6 is
unavailable to an indemnified party under subsections (a) or (b) of this
Section 6 or insufficient to hold an indemnified party harmless in respect of any losses,
claims, damages, liabilities or expenses referred to therein, then each applicable indemnifying
party shall, in lieu of indemnifying such indemnified party, shall contribute to the amount paid or
payable by such indemnified party as a result of the losses, claims, damages, liabilities or
expenses referred to in subsection (a) or (b) above, (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company on the one hand and the
Placement Agent on the other from the offering of the Securities or (ii) if the allocation provided
by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause (i) above but also the relative fault
of the indemnifying party or parties on the one hand and the indemnified party or parties on the
other hand in connection with the statements or omissions that resulted in such losses, claims,
damages, liabilities or expenses, 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 hand
shall be deemed to be in the same respective proportions as the total net proceeds from the
offering of the Securities (before deducting expenses) received by the Company and the total
placement agent commissions received by the Placement Agent, in each case as set forth on the cover
of the Prospectus, bear to the aggregate public offering price of the Securities. The relative
fault of the Company on the one hand and the Placement Agent on the other hand 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 by the Placement Agent, on the other hand, and the parties’
relevant intent, knowledge, access to information and opportunity to correct or prevent such untrue
statement or omission. The Company and the Placement Agent agree that it would not be just and
equitable if contribution pursuant to this subsection (d) were to be determined by pro rata
allocation or by any other method of allocation which does not take account of the equitable
considerations referred to in the first sentence of this Section 6(d). The amount paid or
payable by an indemnified party as a result of the losses, claims, damages or liabilities referred
to in the first sentence of this Section 6(d) shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in connection with investigating or
defending against any action or claim which is the subject of this Section 6(d).
Notwithstanding the provisions of this Section 6(d), the Placement Agent shall not be
required to contribute any amount in excess of the total commissions received by such Placement
Agent in accordance with Section 1(b). 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.
(e) Representations and Agreements to Survive Delivery. The obligations of the Company under
this Section 6 shall be in addition to any liability which the Company may otherwise have.
The indemnity and contribution agreements contained in this Section 6 and the covenants,
warranties and representations of the Company contained in this Agreement shall remain operative
and in full force and effect regardless of (i) any termination of this Agreement, (ii) any
investigation made by or on behalf of the Placement Agent, any person who controls the Placement
Agent within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange
Act or any affiliate of the Placement Agent, or by or on behalf of the Company, its directors or
officers or any person who controls the Company within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange
-23-
Act, and (iii) the issuance and delivery of the Securities. The Company and the Placement
Agent agree promptly to notify each other of the commencement of any Proceeding against it and, in
the case of the Company, against any of the Company’s officers or directors in connection with the
issuance and sale of the Securities, or in connection with the Registration Statement, the
Disclosure Package or the Prospectus.
7. Information Furnished by Placement Agent. The Company acknowledges that the statements set
forth in the sixth paragraph under the heading “Plan of Distribution” in the Prospectus (the
"Placement Agent Information”) constitute the only information relating to the Placement Agent
furnished in writing to the Company by the Placement Agent as such information is referred to in
Sections 2 and 6 hereof.
8. Termination. (a) The Placement Agent shall have the right to terminate this Agreement by
giving notice as hereinafter specified at any time at or prior to the Closing Date, without
liability on the part of the Placement Agent to the Company, if (i) prior to delivery and payment
for the Securities (A) trading in securities generally shall have been suspended or materially
limited on or by the New York Stock Exchange, the American Stock Exchange or Nasdaq, (each, a
"Trading Market”), (B) trading in the Common Stock of the Company shall have been suspended or
materially limited on any exchange or in the over-the-counter market, (C) a general moratorium on
commercial banking activities shall have been declared by federal or New York state authorities,
(D) there shall have occurred any outbreak or material escalation of hostilities or acts of
terrorism involving the United States or there shall have been a declaration by the United States
of a national emergency or war, (E) there shall have occurred any other calamity or crisis or any
material change in general economic, political or financial conditions in the United States or
elsewhere, if the effect of any such event specified in clause (D) or (E), in the judgment of the
Placement Agent, makes it impractical or inadvisable to proceed with the completion of the sale of
and payment for the Securities on the Closing Date on the terms and in the manner contemplated by
this Agreement, the Disclosure Package and the Prospectus, or (ii) since the time of execution of
this Agreement or the earlier respective dates as of which information is given in the Disclosure
Package, there has been any Material Adverse Effect or the Company shall have sustained a loss by
strike, fire, flood, earthquake, accident or other calamity of such character that in the judgment
of the Placement Agent would, individually or in the aggregate, result in a Material Adverse Effect
and which would, in the judgment of the Placement Agent, make it impracticable or inadvisable to
proceed with the offering or the delivery of the Securities on the terms and in the manner
contemplated in the Disclosure Package. Any such termination shall be without liability of any
party to any other party except that the provisions of Section 4, Section 6,
Section 8(b) and Section 11 hereof shall at all times be effective notwithstanding
such termination.
(b) If (1) this Agreement shall be terminated by the Placement Agent pursuant to Section
5 or 8(a) or (2) the sale of the Securities to Investors is not consummated because of
any failure, refusal or inability on the part of the Company to comply with the terms or perform
any agreement or obligation of this Agreement or any Subscription Agreement, other than by reason
of a default by the Placement Agent, the Company will, in addition to paying the amounts described
in Section 4 hereof, reimburse the Placement Agent for all of its reasonable out-of-pocket
disbursements (including, but not limited to, the fees and disbursements of its counsel).
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9. Notices. All statements, requests, notices and agreements hereunder shall be in writing or
by facsimile, and:
(a) if to the Placement Agent, shall be delivered or sent by mail, telex or facsimile
transmission to:
ThinkEquity Partners LLC
00 Xxxx 00xx Xxxxxx
Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxxxx
Facsimile No.: 000-000-0000
00 Xxxx 00xx Xxxxxx
Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxxxx
Facsimile No.: 000-000-0000
with a copy (which shall not constitute notice) to:
Xxxxxxxxxx Xxxxxxx PC
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxxx, Esq.
Facsimile No.: 000-000-0000
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxxx, Esq.
Facsimile No.: 000-000-0000
(b) if to the Company shall be delivered or sent by mail, telex or facsimile transmission
to:
Emisphere Technologies, Inc.
000 Xxx Xxx Xxxx Xxxxx Xxxx
Xxxxxxxxx, Xxx Xxxx 00000
Attention: Chief Executive Officer
Facsimile No.: (000) 000-0000
000 Xxx Xxx Xxxx Xxxxx Xxxx
Xxxxxxxxx, Xxx Xxxx 00000
Attention: Chief Executive Officer
Facsimile No.: (000) 000-0000
with a copy (which shall not constitute notice) to:
Xxxxx Xxxxxxx Berlack Israels LLP
Xxx Xxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxx, Esq.
Facsimile No.: 000-000-0000
Xxx Xxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxx, Esq.
Facsimile No.: 000-000-0000
Any such notice shall be effective only upon receipt. Any party to this Agreement may change such
address for notices by sending to the parties to this Agreement written notice of a new address for
such purpose.
10. Persons Entitled to Benefit of Agreement. This Agreement shall inure to the benefit of
and shall be binding upon the Placement Agent, the Company and their respective successors and
assigns and the controlling persons, officers and directors referred to in Section 6.
Nothing in this Agreement is intended or shall be construed to give to any other person, firm or
corporation, other than the persons, firms or corporations mentioned in the preceding sentence, any
legal or equitable remedy or
claim under or in respect of this Agreement, or any provision herein contained. The term
“successors and assigns” as herein used shall not include any purchaser of the Securities by reason
merely of such purchase.
11. Governing Law. This Agreement shall be governed by and construed in accordance with the
laws of the State of New York, without giving effect to the conflicts of laws provisions thereof.
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12. No Fiduciary Relationship. The Company hereby acknowledges that the Placement Agent is
acting solely as placement agent in connection with the offering of the Company’s securities. The
Company further acknowledges that the Placement Agent is acting pursuant to a contractual
relationship created solely by this Agreement entered into on an arm’s length basis and in no event
do the parties intend that the Placement Agent act or be responsible as fiduciaries to the Company,
its management, stockholders, creditors or any other person in connection with any activity that
the Placement Agent may undertake or have undertaken in furtherance of the offering of the
Company’s securities, either before or after the date hereof. The Placement Agent hereby expressly
disclaims any fiduciary or similar obligations to the Company, either in connection with the
transactions contemplated by this Agreement or any matters leading up to such transactions, and the
Company hereby confirms its understanding and agreement to that effect. The Company and the
Placement Agent agree that they are each responsible for making their own independent judgments
with respect to any such transactions, and that any opinions or views expressed by the Placement
Agent to the Company regarding such transactions, including but not limited to any opinions or
views with respect to the price or market for the Company’s securities, do not constitute advice or
recommendations to the Company. The Company hereby waives and releases, to the fullest extent
permitted by law, any claims that the Company may have against the Placement Agent with respect to
any breach or alleged breach of any fiduciary or similar duty to the Company in connection with the
transactions contemplated by this Agreement or any matters leading up to such transactions.
13. Headings. The Section headings in this Agreement have been inserted as a matter of
convenience of reference and are not a part of this Agreement.
14. Amendments and Waivers. No supplement, modification or waiver of this Agreement shall be
binding unless executed in writing by the party to be bound thereby. The failure of a party to
exercise any right or remedy shall not be deemed or constitute a waiver of such right or remedy in
the future. No waiver of any of the provisions of this Agreement shall be deemed or shall
constitute a waiver of any other provision hereof (regardless of whether similar), nor shall any
such waiver constitute a continuing waiver unless otherwise expressly provided.
15. Submission to Jurisdiction. Except as set forth below, no 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
hereby consents to the jurisdiction of such courts and personal service with respect thereto. The
Company hereby consents to personal jurisdiction, service and venue in any court in which any
Proceeding arising out of or in any way relating to this Agreement is brought by any third party
against the Placement Agent. The Company hereby waives all right to trial by jury in any 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 Proceeding brought in any such
court shall be conclusive and binding upon the Company 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.
16. Counterparts. This Agreement may be executed in one or more counterparts and, if executed
in more than one counterpart, the executed counterparts shall each be deemed to be an original and
all such counterparts shall together constitute one and the same instrument. Delivery of an
executed counterpart by facsimile shall be effective as delivery of a manually executed counterpart
thereof.
-26-
If the foregoing is in accordance with your understanding of the agreement between the Company
and the Placement Agent, kindly indicate your acceptance in the space provided for that purpose
below.
| Very truly yours, EMISPHERE TECHNOLOGIES, INC. |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
Accepted as of
the date first above written:
the date first above written:
| THINKEQUITY PARTNERS LLC | ||||
By: |
||||
| Title: | ||||
Schedules and Exhibits
Schedule 2(jj):
|
Broker Fees | |
Schedule I:
|
Issuer General Free Writing Prospectuses | |
Exhibit A:
|
Form of Subscription Agreement | |
Exhibit B:
|
Form of Lock-Up Agreement | |
Exhibit C:
|
List of Directors, Executive Officers and Stockholders Executing Lock-Up Agreements | |
Exhibit D:
|
Matters to be Covered in the Opinion of Corporate Counsel to the Company | |
Exhibit E:
|
Pricing Information |
Schedule 2(jj)
Broker Fees
The Company has agreed to pay a financial advisory fee to WBB Securities LLC of $30,000, which
shall be payable out of the Placement Fee to be paid to the Placement Agent.
Schedule I
Issuer General Free Writing Prospectuses
Final Term Sheet dated August 16, 2007.
Exhibit A
Form of Subscription Agreement
This subscription (this “Subscription Agreement”) is dated August 16, 2007, by and
between the investor identified on the signature page hereto (the “Investor”) and Emisphere
Technologies, Inc., a Delaware corporation (the “Company”), whereby the parties agree as
follows:
1. Subscription.
(a) Investor agrees to buy and the Company agrees to sell and issue to Investor (i) such
number of shares of common stock, par value $0.01 per share (the “Common Stock”), of the
Company, set forth on the signature page hereto (the “Shares”), and (ii) warrants to
purchase such number of shares of Common Stock set forth on the signature page hereto (the
“Warrants” and together with the Shares, the “Securities”) for an aggregate
purchase price set forth on the signature page hereto (the “Purchase Price”).
(b) The Securities have been registered on a Registration Statement on Form S-3, Registration
No. 333-133087, which registration statement (together with any registration statement filed by the
Company pursuant to Rule 462(b) under the Securities Act, the “Registration Statement”) has
been declared effective by the Securities and Exchange Commission, has remained effective since
such date and is effective on the date hereof.
(c) NO LATER THAN ONE (1) BUSINESS DAY AFTER THE EXECUTION OF THIS SUBSCRIPTION AGREEMENT BY
THE INVESTOR AND THE COMPANY, THE INVESTOR SHALL REMIT BY WIRE TRANSFER THE AMOUNT OF FUNDS EQUAL
TO THE AGGREGATE PURCHASE PRICE FOR THE SECURITIES BEING PURCHASED BY THE INVESTOR TO THE FOLLOWING
ACCOUNT DESIGNATED BY THE COMPANY AND THE PLACEMENT AGENT ENGAGED BY THE COMPANY IN CONNECTION WITH
THE SALE AND ISSUANCE OF THE SECURITIES (THE “PLACEMENT AGENT”) PURSUANT TO THE TERMS OF
THAT CERTAIN ESCROW AGREEMENT (THE “ESCROW AGREEMENT”) DATED AS OF THE DATE HEREOF, BY AND
AMONG THE COMPANY, THE PLACEMENT AGENT AND JPMORGAN CHASE (THE “ESCROW AGENT”):
JPMorgan Chase Bank
ABA # 000000000
Account No.: 304954950
Account Name: Emisphere / ThinkEquity
ABA # 000000000
Account No.: 304954950
Account Name: Emisphere / ThinkEquity
Such funds shall be held in escrow until the Closing Date and delivered by the Escrow Agent on
behalf of the Investor to the Company unless (i) the agreement between the Company and the
Placement Agent (the “Placement Agreement”) is terminated pursuant to the terms thereof or
(ii) determined that the conditions to closing in the Placement Agreement have not been satisfied.
The Investor’s obligations are expressly not conditioned on the purchase by any or all other
investors of the Securities that they have agreed to purchase from the Company. The Placement
Agent shall have no rights in or to any of the escrowed funds, unless the Placement Agent and the
Escrow Agent are notified in writing by the Company in connection with the closing that a portion
of the escrowed funds shall be applied to the Placement Agent’s fees.
(d) NO LATER THAN ONE (1) BUSINESS DAY AFTER THE EXECUTION OF THIS SUBSCRIPTION AGREEMENT BY
THE INVESTOR AND THE COMPANY, THE INVESTOR
SHALL DIRECT THE BROKER-DEALER AT WHICH THE ACCOUNT OR ACCOUNTS TO BE
CREDITED WITH THE SHARES
ARE MAINTAINED TO SET UP A DEPOSIT/WITHDRAWAL AT CUSTODIAN (“DWAC”) INSTRUCTING THE TRANSFER AGENT
TO CREDIT SUCH ACCOUNT OR ACCOUNTS WITH THE SHARES ON THE CLOSING DATE.
(e) On the third or fourth business day after the date of this Subscription Agreement (the
“Closing Date”), the Company (i) shall cause its transfer agent to deliver to Investor the
Shares via the Depository Trust Company’s (“DTC”) Deposit or Withdrawal at Custodian system
and (ii) shall deliver to Investor the Warrants via the instructions set forth on the signature
page hereto, such Shares and Warrants to be registered in such name or names as designated by the
Investor on the signature page hereto. The Shares and Warrants shall be unlegended and free of any
resale restrictions.
2. Company Representations and Warranties. The Company represents and warrants that:
(a) it has full right, power and authority to enter into this Subscription Agreement and to perform
all of its obligations hereunder; (b) this Subscription Agreement has been duly authorized and
executed by and constitutes a valid and binding agreement of the Company enforceable in accordance
with its terms; (c) the execution and delivery of this Subscription Agreement and the consummation
of the transactions contemplated hereby do not conflict with or result in a breach of (i) the
Company’s Certificate of Incorporation or Bylaws, or (ii) any material agreement to which the
Company is a party or by which any of its property or assets is bound; (d) the Shares have been
duly authorized for sale and issuance, and when issued and delivered by the Company against payment
therefor pursuant to this Subscription Agreement, will be validly issued, fully paid and
nonassessable, the Warrants have been duly and validly authorized by the Company and upon delivery
to the Investor at the Closing Date will be valid and binding obligations of the Company,
enforceable in accordance with their terms, except as such enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the rights and
remedies of creditors generally or subject to general principles of equity, the shares of Common
Stock initially issuable upon exercise of the Warrants have been duly authorized and reserved for
sale and issuance, and when issued and delivered by the Company against payment therefor in
accordance with the terms thereof, will be validly issued, fully paid and nonassessable; (e) the
Registration Statement and any post-effective amendment thereto, at the time it became effective,
did not contain any untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not misleading; (f) the prospectus
contained in the Registration Statement, as amended or supplemented, did not contain as of the
effective date thereof, and as of the date hereof does not contain, 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; and (g) all preemptive
rights or rights of first refusal held by stockholders of the Company and applicable to the
transactions contemplated hereby have been duly satisfied or waived in accordance with the terms of
the agreements between the Company and such stockholders conferring such rights.
3. Investor Representations, Warranties and Acknowledgments. The Investor represents
and warrants to, and covenants with, the Company that (a) the Investor is knowledgeable,
sophisticated and experienced in making, and is qualified to make decisions with respect to,
investments in securities presenting an investment decision like that involved in the purchase of
the Securities, including investments in securities issued by the Company and investments in
comparable companies, and has requested, received, reviewed and considered all information it
deemed relevant in making an informed decision to purchase the Securities, and (b) the Investor, in
connection with its decision to purchase the number of Securities set forth on the Signature Page,
relied only upon any or all of the following: the Registration Statement, the Base Prospectus, the
Prospectus Supplement, the Company’s regular reports on Forms 10-K, 10-Q and 8-K as filed by the
Company with the Commission, the Disclosure Package (as
defined in the Placement Agreement) and the Final Term Sheet (as defined in the Placement
Agreement) provided to the Investor and the representations and warranties of the Company contained
herein.
The Investor acknowledges, represents and agrees that no action has been or will be taken in
any jurisdiction outside the United States by the Company or the Placement Agent that would permit
an offering of the Securities, or possession or distribution of offering materials in connection
with the issue of the Securities in any jurisdiction outside the United States where action for
that purpose is required. Each Investor outside the United States will comply with all applicable
laws and regulations in each foreign jurisdiction in which it purchases, offers, sells or delivers
Securities or has in its possession or distributes any offering material, in all cases at its own
expense. The Placement Agent is not authorized to make and has not made any representation or use
of any information in connection with the issue, placement, purchase and sale of the Securities,
except as set forth or incorporated by reference in the Registration Statement, the Base
Prospectus, the Prospectus Supplement or the Disclosure Package (as defined in the Placement
Agreement).
The Investor understands that nothing in this Agreement or any other materials presented to
the Investor in connection with the purchase and sale of the Securities constitutes legal, tax or
investment advice. The Investor has consulted such legal, tax and investment advisors as it, in its
sole discretion, has deemed necessary or appropriate in connection with its purchase of Securities.
The Investor represents, warrants and agrees that, since the earlier to occur of (i) the date
on which the Placement Agent first contacted the Investor about the Offering and (ii) the date that
is the tenth (10th) trading day prior to the date of this Agreement, it has not engaged in any
short selling of the Company’s securities, or established or increased any “put equivalent
position” as defined in Rule 16(a)-1(h) under the Securities Exchange Act of 1934 with respect to
the Company’s securities.
The Investor represents and warrants that: (a) it has full right, power and authority to enter
into this Subscription Agreement and to perform all of its obligations hereunder; (b) this
Subscription Agreement has been duly authorized and executed by the Investor and constitutes a
valid and binding agreement of the Investor enforceable against the Investor in accordance with its
terms; (c) the execution and delivery of this Subscription Agreement and the consummation of the
transactions contemplated hereby do not conflict with or result in a breach of (i) the Investor’s
certificate of incorporation or by-laws (or other governing documents), or (ii) any material
agreement or any law or regulation to which the Investor is a party or by which any of its property
or assets is bound; and (d) prior to the execution hereof, Investor has received in portable
document format, or has otherwise had access to, the Company’s base prospectus dated April 7, 2006.
4. Miscellaneous.
(a) This Subscription Agreement constitutes the entire understanding and agreement between the
parties with respect to its subject matter, and there are no agreements or understandings with
respect to the subject matter hereof which are not contained in this Subscription Agreement. This
Subscription Agreement may be modified only in writing signed by the parties hereto.
(b) This Subscription Agreement may be executed in any number of counterparts, all of which
taken together shall constitute one and the same instrument and shall become effective when
counterparts have been signed by each party and delivered to the other parties hereto, it being
understood that all parties need not sign the same counterpart. Execution may be made by delivery
by facsimile.
(c) The provisions of this Subscription Agreement are severable and, in the event that any
court or officials of any regulatory agency of competent jurisdiction shall determine that any one
or more of the provisions or part of the provisions contained in this Subscription Agreement
shall, for any reason, be held to be invalid, illegal or unenforceable in any respect, such
invalidity, illegality or
unenforceability shall not affect any other provision or part of a
provision of this Subscription Agreement and this Subscription Agreement shall be reformed and
construed as if such invalid or illegal or unenforceable provision, or part of such provision, had
never been contained herein, so that such provisions would be valid, legal and enforceable to the
maximum extent possible, so long as such construction does not materially adversely effect the
economic rights of either party hereto.
(d) All communications hereunder, except as may be otherwise specifically provided herein,
shall be in writing and shall be mailed, hand delivered, sent by a recognized overnight courier
service such as Federal Express, or sent via facsimile and confirmed by letter, to the party to
whom it is addressed at the following addresses or such other address as such party may advise the
other in writing:
To the Company: as set forth on the signature page hereto.
To the Investor: as set forth on the signature page hereto.
All notices hereunder shall be effective upon receipt by the party to which it is addressed.
(e) This Subscription Agreement shall be governed by and interpreted in accordance with the
laws of the State of New York for contracts to be wholly performed in such state and without giving
effect to the principles thereof regarding the conflict of laws. To the extent determined by such
court, the prevailing party shall reimburse the other party for any reasonable legal fees and
disbursements incurred in enforcement of, or protection of any of its rights under this
Subscription Agreement.
If the foregoing correctly sets forth our agreement, please confirm this by signing and
returning to us the duplicate copy of this Subscription Agreement.
| EMISPHERE TECHNOLOGIES, INC. | ||||||
| By: | ||||||
| Name: | ||||||
Number of Shares:
|
Title: | |||||
Number of Warrants:
|
||||||
| (such number to be equal to 20% of the number of Shares being purchased by the Investor) | ||||||
Purchase Price Per Unit:
|
$3.785 | |||||||
| Aggregate Purchase Price: | Address for Notice: | |||||||
| INVESTOR: | 000 Xxx Xxx Xxxx Xxxxx Xxxx | |||||
| Xxxxxxxxx, Xxx Xxxx 00000 | ||||||
| Facsimile: (000) 000-0000 | ||||||
| By: | Attention: Chief Executive Officer | |||||
Name: |
||||||
Title: |
||||||
| Address for Notice and Delivery of the Warrants: | ||||||
Facsimile: |
||||||
Attention: |
||||||
| DWAC Instructions for Delivery of the Shares: | ||||||
Name of DTC Participant: |
||||
DTC Participant Number: |
||||
Account Number: |
||||
NO LATER THAN ONE (1) BUSINESS DAY AFTER THE EXECUTION OF THIS SUBSCRIPTION AGREEMENT BY THE INVESTOR AND THE COMPANY, THE
INVESTOR SHALL DIRECT THE BROKER-DEALER AT WHICH THE ACCOUNT OR ACCOUNTS TO BE CREDITED WITH THE SHARES ARE MAINTAINED TO SET UP
A DEPOSIT/WITHDRAWAL AT CUSTODIAN (“DWAC”) INSTRUCTING THE TRANSFER AGENT TO CREDIT SUCH ACCOUNT OR ACCOUNTS WITH THE SHARES ON
THE CLOSING DATE.
NO LATER THAN ONE (1) BUSINESS DAY AFTER THE EXECUTION OF THIS SUBSCRIPTION AGREEMENT BY THE INVESTOR AND THE COMPANY, THE
INVESTOR SHALL REMIT BY WIRE TRANSFER THE AMOUNT OF FUNDS EQUAL TO THE AGGREGATE PURCHASE PRICE FOR THE SECURITIES BEING
PURCHASED BY THE INVESTOR TO THE FOLLOWING ACCOUNT:
JPMorgan Chase Bank
ABA # 000000000
Account No.: 304954950
Account Name: Emisphere / ThinkEquity
ABA # 000000000
Account No.: 304954950
Account Name: Emisphere / ThinkEquity
Exhibit B
Form of Lock-Up Agreement
August ___, 2007
THINKEQUITY PARTNERS LLC
00 Xxxx 00xx Xxxxxx
Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
00 Xxxx 00xx Xxxxxx
Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
The undersigned understands that you, as Placement Agent, propose to enter into the Placement
Agency Agreement (the “Placement Agency Agreement”) with Emisphere Technologies, Inc., a
Delaware corporation (the “Company”), providing for the offering (the “Offering”)
of shares (the “Shares”) of common stock, par value $0.01 per share (the “Common
Stock”), of the Company. Capitalized terms used herein and not otherwise defined shall have
the meanings set forth in the Placement Agency Agreement.
In consideration of the foregoing, and in order to induce you to participate the Offering, and
for other good and valuable consideration receipt of which is hereby acknowledged, the undersigned
hereby agrees that, without your prior written consent (which consent may be withheld in your sole
discretion), the undersigned will not, during the period (the “Lock-Up Period”) beginning
on the date hereof and ending on the date 90 days after the date of the final prospectus (including
the final prospectus supplement) to be used in confirming the sale of the Shares (the “Final
Prospectus”), (1) offer, pledge, announce the intention to sell, sell, contract to sell, sell
any option or contract to purchase, purchase any option or contract to sell, grant any option,
right or warrant to purchase, or otherwise transfer or dispose of, directly or indirectly, or file
(or participate in the filing of) a registration statement with the Securities and Exchange
Commission in respect of, any shares of Common Stock or any securities convertible into or
exercisable or exchangeable for shares of Common Stock (including without limitation, shares of
Common Stock which may be deemed to be beneficially owned by the undersigned in accordance with the
rules and regulations of the Securities and Exchange Commission and securities which may be issued
upon exercise of a stock option or warrant), (2) enter into any swap or other agreement that
transfers, in whole or in part, any of the economic consequences of ownership of the shares of
Common Stock, whether any such transaction described in clause (1) or (2) above is to be settled by
delivery of shares of Common Stock or such other securities, in cash or otherwise, (3) make any
demand for or exercise any right with respect to, the registration of any shares of Common Stock or
any security convertible into or exercisable or exchangeable for shares of Common Stock, or (4)
publicly announce an intention to effect any transaction specific in clause (1), (2) or (3) above.
Notwithstanding the foregoing, the restrictions set forth in clause (1) and (2) above shall
not apply to (a) transfers (i) as a bona fide gift or gifts, provided that the donee or donees
thereof agree to be bound in writing by the restrictions set forth herein, (ii) to any trust for
the direct or indirect benefit of the undersigned or the immediate family of the undersigned,
provided that the trustee of the trust agrees to be bound in writing by the restrictions set forth
herein, and provided further that any such transfer shall not involve a disposition for value,
(iii) with your prior written consent or (iv) effected pursuant to any exchange of “underwater”
options with the Company, (b) the acquisition or exercise of any stock option issued pursuant to
the Company’s existing stock option plan, including any exercise effected by the
delivery of shares of Common Stock of the Company held by the undersigned, or (c) the purchase
or sale of the Company’s securities pursuant to a plan, contract or instruction that satisfies all
of the requirements of Rule 10b5-1(c)(1)(i)(B) that was in effect prior to the date hereof. For
purposes of this Lock-Up Agreement, “immediate family” shall mean any relationship by blood,
marriage or adoption, not more remote than first cousin. None of the restrictions set forth in
this Lock-Up Agreement shall apply to shares of Common Stock acquired in open market transactions.
For the purpose of allowing you to comply with FINRA Rule 2711(f)(4), if (1) during the last
17 days of the Lock-Up Period, the Company releases earnings results or publicly announces other
material news or a material event relating to the Company occurs or (2) prior to the expiration of
the Lock-Up Period, the Company announces that it will release earnings results during the 16 day
period beginning on the last day of the Lock-Up Period, then in each case the Lock-Up Period will
be extended until the expiration of the 18 day period beginning on the date of release of the
earnings results or the public announcement regarding the material news or the occurrence of the
material event, as applicable, unless you waive, in writing, such extension. The Company agrees
not to accelerate the vesting of any option or warrant or the lapse of any repurchase right prior
to the expiration of the Lock-Up Period. In furtherance of the foregoing, the Company, and any
duly appointed transfer agent or depositary for the registration or transfer of the securities
described herein, are hereby authorized to decline to make any transfer of securities if such
transfer would constitute a violation or breach of this Lock-Up Agreement.
The foregoing restrictions are expressly agreed to preclude the undersigned from engaging in
any hedging or other transaction which is designed to or reasonably expected to lead to or result
in a sale or disposition of the shares of Common Stock even if such securities would be disposed of
by someone other than the undersigned. Such prohibited hedging or other transactions would include
without limitation any short sale or any purchase, sale or grant of any right (including without
limitation any put option or put equivalent position or call option or call equivalent position)
with respect to any of the shares of Common Stock or with respect to any security that includes,
relates to, or derives any significant part of its value from such shares of Common Stock.
The undersigned hereby represents and warrants that the undersigned has full power and
authority to enter into this Lock-Up Agreement. All authority herein conferred or agreed to be
conferred and any obligations of the undersigned shall be binding upon the successors, assigns,
heirs or personal representatives of the undersigned.
The undersigned also agrees and consents to the entry of stop transfer instructions with the
Company’s transfer agent and registrar or depositary against the transfer of the undersigned’s
shares of Common Stock except in compliance with the foregoing restrictions.
The undersigned understands that, if the Placement Agency Agreement does not become effective,
or if the Placement Agency Agreement (other than the provisions thereof which survive termination)
shall terminate or be terminated prior to payment for and delivery of the Shares to be sold
thereunder, the undersigned shall be released from all obligations under this Lock-Up Agreement.
This Lock-Up Agreement shall be governed by and construed in accordance with the laws of the
State of New York, without regard to the conflict of laws principles thereof.
| Very truly yours, | ||
| Name: |
Exhibit C
List of Directors, Executive Officers and Stockholders
Executing Lock-Up Agreements
Executing Lock-Up Agreements
Xxxxx X. Xxxxxx
Xxxxxx X. Pack
Xxxxxxx X. Xxxxxx, M.D.
Xxxxx Xxxxxx
Xxxxxx X. Xxxx
Xxxx X. Xxxxxx, Xx.
Xxxxxxx Xxxxxx, M.D., Ph.D.
Xxxx X. Xxxxxxxx, M.D.
Xxxxxxx X. Xxxxxxxx
Xxxxxxx X. Xxxxxx
Xxxxxxx Xxxxxxx
MHR Capital Partners Master Account LP
MHR Capital Partners (100) LP
MHR Institutional Partners II
MHR Institutional Partners IIA
Xxxxxx X. Pack
Xxxxxxx X. Xxxxxx, M.D.
Xxxxx Xxxxxx
Xxxxxx X. Xxxx
Xxxx X. Xxxxxx, Xx.
Xxxxxxx Xxxxxx, M.D., Ph.D.
Xxxx X. Xxxxxxxx, M.D.
Xxxxxxx X. Xxxxxxxx
Xxxxxxx X. Xxxxxx
Xxxxxxx Xxxxxxx
MHR Capital Partners Master Account LP
MHR Capital Partners (100) LP
MHR Institutional Partners II
MHR Institutional Partners IIA
Exhibit D
Matters to be Covered in the Opinion of Corporate Counsel to the Company
Exhibit E
Pricing Information
Number of Shares to be Sold: 1,544,638
Number of Warrants to be Sold: 308,927
Offering Price: $3.785 per unit
Aggregate Placement Agency Fees: $409,252
Estimated Net Proceeds to the Company: $5.4 million
