EXHIBIT 10.1
EXECUTION COPY
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6,385,907 SHARES
WARRANTS TO PURCHASE 1,596,478 SHARES
ACACIA RESEARCH CORPORATION
ACACIA RESEARCH - COMBIMATRIX COMMON STOCK
PLACEMENT AGENCY AGREEMENT
September 15, 2005
XXXXX XXXXXXX & CO.
U.S. Bancorp Center
000 Xxxxxxxx Xxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Ladies and Gentlemen:
Acacia Research Corporation, a Delaware corporation (the "COMPANY"),
proposes, subject to the terms and conditions contained herein and in the
Subscription Agreements in the form of EXHIBIT A attached hereto (the
"SUBSCRIPTION AGREEMENTS") entered into with the Investors identified therein
(each an "INVESTOR" and, collectively, the "INVESTORS"), to issue and sell an
aggregate of (i) 6,385,907 shares (the "SHARES") of common stock, $0.001 par
value per share, designated as Acacia Research - CombiMatrix Common Stock (the
"AR-COMBIMATRIX COMMON STOCK"), of the Company and (ii) 1,596,478 warrants to
purchase AR-CombiMatrix Common Stock substantially in the form of EXHIBIT B
attached hereto (the "INVESTOR WARRANTS", such number of warrants being equal to
twenty-five percent (25%) of the number of Shares so proposed to be sold by the
Company to the Investors) directly to the Investors. The aggregate of 6,385,907
Shares and 1,596,478 Investor Warrants are hereinafter referred to as the
"SECURITIES." The shares of AR-CombiMatrix Common Stock issuable upon exercise
of the Investor Warrants are hereinafter referred to as the "INVESTOR WARRANT
SHARES." The Company desires to engage you as its placement agent (the
"PLACEMENT AGENT") in connection with such issuance and sale. The Securities are
more fully described in the Registration Statement (as hereinafter defined).
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 all the terms and conditions of this Agreement:
(a) The Placement Agent agrees to act as the Company's
exclusive placement agent in connection with the issuance and sale, on a
commercially reasonable efforts basis, by the Company of the Securities to the
Investors. Upon the occurrence of the Closing (as hereinafter defined), the
Company shall pay to the Placement Agent seven percent (7.0%) of the gross
proceeds received by the Company from the sale of the Securities. The Company
acknowledges and agrees that the Placement Agent's engagement hereunder is not
an agreement by the Placement Agent or any of its affiliates to underwrite or
purchase any securities or otherwise provide any financing. Under no
circumstances will the Placement Agent be obligated to purchase any Securities
for its own account and, in soliciting purchases of Securities, the Placement
Agent shall act solely as the Company's agent and not as principal.
Notwithstanding the foregoing, it is understood and agreed that the Placement
Agent (or its affiliates) may, solely at its discretion and without any
obligation to do so, purchase Securities as principal. The Placement Agent shall
have no authority to bind the Company.
(b) Payment of the purchase price for, and delivery of, the
Securities shall be made at a closing (the "CLOSING") at the offices of
Xxxxxxxxx Xxxxxxx, LLP, counsel for the Company, located at 000 Xxxx Xxxxxx
Xxxxx, Xxxxx 0000, Xxxxx Xxxx, Xxxxxxxxxx at 7:00 a.m., local time, on the third
or fourth business day (as permitted under Rule 15c6-1 under the Exchange Act)
after the determination of the public offering price of the Securities (such
time and 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.
(c) Prior to the Closing, the Placement Agent shall cause each
Investor to wire directly to an escrow account designated by the Placement Agent
an amount equal to the aggregate purchase price for the number of Securities
such Investor has agreed to purchase.
(d) On the Closing Date, the Placement Agent shall cause the
aggregate purchase price for the Securities to be wired from the Investors or
the escrow account referred to in Section 1(c) above to an account designated by
the Company and the Company shall deliver, or cause the transfer agent for the
Securities to deliver, to each Investor the number of Securities set forth on
the signature page to such Investor's Subscription Agreement, which delivery
shall be made, with respect to an Investor, in accordance with the procedures
set forth in such Investor's executed Subscription Agreement.
(e) The purchases of the Securities by each of the Investors
shall be evidenced by the execution of a Subscription Agreement substantially in
the form attached hereto as EXHIBIT A.
(f) Prior to the earlier of (i) the date on which this
Agreement is terminated and (ii) the Closing Date, the Company shall not,
without the prior written consent of Xxxxx Xxxxxxx & Co., solicit or accept
offers to purchase shares of its AR-CombiMatrix Common Stock or other equity or
equity-linked securities of the Company (other than pursuant to the exercise of
options or warrants to purchase shares of AR-CombiMatrix Common Stock that are
outstanding at the date hereof) otherwise than through the Placement Agent.
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2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to the Placement Agent and the Investors as of the date
hereof and as of the Closing Date, as follows:
(a) REGISTRATION STATEMENT. The Company has prepared and filed
in conformity with the requirements of the Securities Act of 1933, as amended
(the "SECURITIES ACT"), and published rules and regulations thereunder (the
"RULES AND REGULATIONS") adopted by the Securities and Exchange Commission (the
"COMMISSION") a "shelf" Registration Statement (as hereinafter defined) on Form
S-3 (No. 333-112885), which was declared by the Commission to be effective under
the Securities Act as of March 17, 2004 (the "EFFECTIVE DATE") including a Base
Prospectus, dated as of the Effective Date, relating to the Securities (the
"BASE PROSPECTUS"), and such amendments and supplements thereto as may have been
required to the date of this Agreement. The Company will next file with the
Commission pursuant to Rule 424(b) under the Securities Act a final prospectus
supplement to the Base Prospectus (a "PROSPECTUS SUPPLEMENT") describing the
Securities and the offering thereof, in such form as has been provided to or
discussed with, and approved, by the Placement Agent.
The term "REGISTRATION STATEMENT" as used in this
Agreement means the registration statement (including all exhibits, financial
schedules and all documents and information deemed to be a part of the
Registration Statement pursuant to Rule 430A or 434(d) under the Securities
Act), as of the Effective Date and as amended and/or supplemented to the date of
this Agreement. The Registration Statement has been declared effective under the
Securities Act and no stop order preventing or suspending the effectiveness of
the Registration Statement or suspending or preventing the use of the Prospectus
(as defined below) has been issued by the Commission and no proceedings for that
purpose have been instituted or, to the Company's knowledge, are contemplated by
the Commission.
The term "PROSPECTUS" as used in this Agreement means
the Base Prospectus together with the Prospectus Supplement, except that if such
Base Prospectus is amended or supplemented prior to the date on which the
Prospectus Supplement was first filed pursuant to Rule 424, the term
"PROSPECTUS" shall refer to the Base Prospectus as so amended or supplemented
and as supplemented by the Prospectus Supplement. Any reference herein to the
Registration Statement, the Base Prospectus, any Prospectus Supplement or the
Prospectus shall be deemed to refer to and include the documents incorporated by
reference therein pursuant to Item 12 of Form S-3 (the "INCORPORATED
DOCUMENTS"), which were filed under the Securities Exchange Act of 1934, as
amended (the "EXCHANGE ACT") and any reference herein to the terms "amend,"
"amendment," or "supplement" with respect to the Registration Statement, the
Prospectus Supplement or the Prospectus shall be deemed to refer to and include
(i) the filing of any document under the Exchange Act after the Effective Date,
or the date of the Prospectus, as the case may be, which is incorporated by
reference and (ii) any such document so filed. If the Company has filed an
abbreviated registration statement to register additional Securities pursuant to
Rule 462(b) under the Rules (the "462(B) REGISTRATION STATEMENT"), then any
reference herein to the Registration Statement shall also be deemed to include
such 462(b) Registration Statement.
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(b) REGISTRATION STATEMENT AND PROSPECTUS. On the Effective
Date, upon the filing or first delivery to the Investors of the Prospectus, as
of the date hereof, and at the Closing Date, the Registration Statement (and any
post-effective amendment thereto) and the Prospectus (as amended or as
supplemented if the Company shall have filed with the Commission any amendment
or supplement to the Registration Statement or the Prospectus) complied and will
comply, in all material respects, with the requirements of the Securities Act
and the Rules and Regulations and the Exchange Act and the rules and regulations
of the Commission thereunder and did not at the Effective Date, does not as of
the date hereof and will not as of the Closing Date, contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein (in light of
the circumstances under which they were made, in the case of the Prospectus) not
misleading. Notwithstanding the foregoing, none of the representations and
warranties in this paragraph 2(b) shall apply to statements in, or omissions
from, the Registration Statement or the Prospectus, or any amendment or
supplement thereto made in reliance upon, and in conformity with, information
herein or otherwise furnished in writing by or on behalf of the Placement Agent
to the Company expressly for use in the Registration Statement or the Prospectus
or any amendment or supplement thereto. The Incorporated Documents, at the time
they became effective or were filed with the Commission, complied in all
material respects with the requirements of the Exchange Act and did not contain
any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. The Company has not distributed and will not distribute, prior to
the completion of the distribution of the Securities, any offering material in
connection with the offering and sale of the Securities, other than the
Registration Statement and the Prospectus.
(c) SUBSIDIARIES. The Company has no significant subsidiaries
(as such term is defined in Rule 1-02 of Regulation S-X promulgated by the
Commission) other than as listed in SCHEDULE I attached hereto (collectively,
the "SUBSIDIARIES"). All of the issued and outstanding shares of capital stock
of each of the Subsidiaries have been duly and validly authorized and issued and
are fully paid, nonassessable and free of preemptive and similar rights to
subscribe for or purchase securities, and, except as listed on Schedule I
attached hereto or otherwise described in the Registration Statement and
Prospectus, the Company owns directly or indirectly, free and clear of any
security interests, claims, liens, proxies, equities or other encumbrances, all
of the issued and outstanding shares of such stock.
(d) FINANCIAL STATEMENTS. The consolidated financial
statements of the Company, together with the related schedules and notes
thereto, set forth or incorporated by reference in the Registration Statement
and the Prospectus comply in all material respects with the applicable
requirements of the Securities Act and the Exchange Act, as applicable, and
fairly present, in all material respects, (i) the consolidated financial
condition of the Company and its Subsidiaries as of the dates indicated and (ii)
the consolidated results of operations, stockholders' equity and changes in cash
flows of the Company and the Subsidiaries for the periods therein specified; and
such financial statements and related schedules and notes thereto, comply, in
all material respects, as to form with the applicable accounting requirements
under the Securities Act and have been prepared in conformity with United States
generally accepted accounting principles, consistently applied throughout the
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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). No other financial statements or schedules are required by the
Securities Act and the Rules and Regulations to be included in the Registration
Statement or Prospectus.
(e) INDEPENDENT ACCOUNTANTS. PricewaterhouseCoopers, LLP (the
"AUDITORS"), whose report with respect to the audited consolidated financial
statements and schedules of the Company and its Subsidiaries included in the
Prospectus, or the Registration Statement, or incorporated by reference therein
is, and during the periods covered by its reports, was an independent public
accounting firm within the meaning of the Securities Act and the Rules and
Regulations.
(f) ORGANIZATION. Each of the Company and its Subsidiaries has
been duly incorporated or otherwise organized and is validly existing as a
corporation in good standing under the laws of its jurisdiction of incorporation
or organization (as applicable). Each of the Company and its Subsidiaries has
full corporate power and authority to own, lease and operate its properties and
assets and to conduct its business as described in the Registration Statement
and Prospectus, and is duly qualified to do business as a foreign corporation
and is in good standing in each jurisdiction in which it owns or leases real
property or in which the conduct of its business makes such qualification
necessary, except where the failure to be so qualified or be in good standing,
as the case may be, would not, individually or in the aggregate, have or
reasonably be expected to result in, a material adverse effect upon the
business, prospects, properties, operations, condition (financial or otherwise)
or results of operations of the Company and its Subsidiaries, taken as a whole
(a "MATERIAL ADVERSE EFFECT").
(g) NO MATERIAL ADVERSE EFFECT. Except as set forth in the
Registration Statement or the Prospectus, subsequent to the respective dates as
of which information is given in the Registration Statement and the Prospectus,
there has not been (i) any material adverse change in the business, properties,
management, financial condition or results of operations of the Company and its
subsidiaries taken as a whole, including any material loss or interference with
its respective business from fire, explosion, flood or other calamity, whether
or not covered by insurance, or from any labor dispute or court or governmental
action, order or decree, (ii) any transaction that is material to the Company
and its Subsidiaries taken as a whole, (iii) any obligation, direct or
contingent (including any off-balance sheet obligations), incurred by the
Company or its Subsidiaries, which is material to the Company and its
Subsidiaries taken as a whole, (iv) any change in the capital stock or
outstanding indebtedness of the Company or its Subsidiaries (subject to the
issuance of shares of Common Stock upon exercise of stock options or warrants
disclosed as outstanding in the Registration Statement and Prospectus and the
grant of options under existing stock option plans described in the Registration
Statement and Prospectus) or (v) any dividend or distribution of any kind
declared, paid or made on the capital stock of the Company.
(h) LEGAL PROCEEDINGS. Except as set forth in the Registration
statement and the Prospectus, there is not pending or, to the knowledge of the
Company, threatened or contemplated, any action, suit or proceeding to which the
Company or any of its Subsidiaries is a party or of which any property or assets
of the Company or any of its Subsidiaries is the subject before or by any court
or governmental agency, authority or body, or any arbitrator, which,
individually or in the aggregate, would reasonably be expected to result in any
Material Adverse Effect or materially and adversely affect the ability of the
Company to perform its obligations under this Agreement and the Subscription
Agreements.
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(i) SUFFICIENCY OF DISCLOSURE. There are (i) no current or
pending legal, governmental or regulatory actions, suits or proceedings that are
required under the Securities Act to be described in the Registration Statement
and Prospectus that have not been so described and (ii) there are no affiliate
transactions, off-balance sheet transactions, contracts, licenses, agreements,
leases or other documents of a character required to be described in the
Registration Statement or the Prospectus or to be filed as exhibits to the
Registration Statement that are not so described or filed as required.
(j) DUE AUTHORIZATION AND ENFORCEABILITY. The Company has full
legal power and authority to enter into this Agreement and the Subscription
Agreements and to consummate the transactions contemplated hereby and thereby.
This Agreement and each of the Subscription Agreements have been duly
authorized, executed and delivered by the Company, and constitute valid, legal
and binding obligations of the Company, enforceable in accordance with their
terms, except as rights to indemnity hereunder may be limited by applicable laws
and 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.
(k) THE SHARES. 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, will have been duly and validly issued and
will be fully paid and nonassessable; and the capital stock of the Company,
including the AR-CombiMatrix Common Stock, conforms to the description thereof
in the Registration Statement and Prospectus. Except as otherwise stated in the
Registration Statement and Prospectus, there are no preemptive rights or other
rights to subscribe for or to purchase, or any restriction upon the voting or
transfer of, any shares of AR-CombiMatrix Common Stock pursuant to the Company's
charter, bylaws or any agreement or other instrument to which the Company is a
party or by which the Company is bound that have not been waived or complied
with.
(l) INVESTOR WARRANTS. The Company has the full right, power
and authority to enter into the Investor Warrants and to perform and discharge
its obligations thereunder. The Investor Warrants have been duly and validly
authorized by the Company and upon delivery to the Investors at the Closing Date
will be duly issued and will constitute legal, 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 Investor Warrant
Shares have been duly authorized and reserved for issuance upon the exercise of
the Investor Warrants and when issued upon payment of the exercise price
therefor will be validly issued, fully paid and nonassessable.
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(m) NO CONFLICTS. The execution, delivery and performance by
the Company of this Agreement, the Investor Warrants, and each of the
Subscription Agreements and the consummation of the transactions herein and
therein contemplated, including the issuance and sale of the Securities, will
not (i) conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default (or an event which with notice or lapse
of time or both would constitute a default) under, or require any consent or
waiver under, or result in the execution of any lien, charge or encumbrance upon
any properties or assets of the Company or its Subsidiaries pursuant to the
terms of, any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which the Company or any of its Subsidiaries is a
party or by which the Company or any of its Subsidiaries is bound or to which
any of the property or assets of the Company or any of its Subsidiaries is
subject, (ii) result in any violation of the provisions of the charter or
by-laws of the Company or any of its Subsidiaries or (iii) result in any
violation of any franchise, license, permit, statute, law, rule or regulation
applicable to the Company or any judgment, order or decree of any court or
governmental agency or body having jurisdiction over the Company or any of its
Subsidiaries or any of their properties or assets, except, in the case of each
of clauses (i) and (iii) above, for any such conflict, breach, violation,
default, lien, charge or encumbrance that would not, individually or in the
aggregate, reasonably be expected to result in a Material Adverse Effect.
(n) NO CONSENTS REQUIRED. No consent, approval, authorization,
filing with or order of or registration with, any court or governmental agency
or body, or approval of the shareholders of the Company, is required for the
execution, delivery and performance of this Agreement, the Investor Warrants,
and each of the Subscription Agreements or for the consummation of the
transactions contemplated hereby and thereby, including the issuance or sale of
the Securities by the Company, except such as have been obtained or made, or
contemplated by this paragraph 2(n) to be obtained or made.
(o) CAPITALIZATION. All of the issued and outstanding shares
of capital stock of the Company, including the outstanding shares of
AR-CombiMatrix Common Stock, are duly authorized and validly issued, fully paid
and nonassessable, have been issued in compliance with all federal and state
securities laws, were not issued in violation of or subject to any preemptive
rights or other rights to subscribe for or purchase securities that have not
been waived in writing. As of the date hereof and as of the Closing Date, the
Company has or will have, as the case may be, an authorized, issued and
outstanding capitalization as is set forth in the Registration Statement and the
Prospectus (subject, in each case, to the issuance of shares of Common Stock
upon exercise of stock options and warrants disclosed as outstanding in the
Registration Statement and the Prospectus and grant of options under existing
stock option plans described in the Registration Statement and the Prospectus,
and such authorized capital stock conforms to the description thereof set forth
in the Registration Statement and the Prospectus. Except as described in the
Registration Statement and the Prospectus, as of the date referred to therein,
the Company did not have outstanding any options, warrants, agreements,
contracts or other rights in existence to purchase or acquire from the Company
or any Subsidiary of the Company any shares of the capital stock of the Company
or any Subsidiary of the Company.
(p) TITLE TO REAL AND PERSONAL PROPERTY. The Company and each
of its Subsidiaries has good and valid title to all property (whether real or
personal) described in the Registration Statement and Prospectus as being owned
by each of them, 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 and the Prospectus and those that do not materially and
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adversely affect the value of such property and do not materially interfere with
the use made of such property by the Company. All of the property described in
the Registration Statement and the Prospectus as being held under lease by the
Company or a Subsidiary is held thereby under valid, subsisting and enforceable
leases.
(q) TITLE TO INTELLECTUAL PROPERTY. The Company and its
Subsidiaries own, possess, license or have other rights to use all foreign and
domestic patents, patent applications, trade and service marks, trade and
service xxxx registrations, trade names, copyrights, licenses, inventions, trade
secrets, technology, Internet domain names, know-how and other intellectual
property, necessary for the conduct of CombiMatrix Group's (as defined in the
Prospectus) businesses as now conducted or as proposed in the Prospectus to be
conducted (collectively, the "INTELLECTUAL PROPERTY"). Except as set forth in
the Prospectus, (a) the Company has not received written notice, and has no
knowledge of, any rights of third parties to any such Intellectual Property; (b)
to the Company's knowledge, there is no infringement by third parties of any
such Intellectual Property; (c) there is no pending or, to the Company's
knowledge, threatened action, suit, proceeding or claim by others challenging
the Company's and its Subsidiaries' rights in or to any such Intellectual
Property; (d) there is no pending or, to the Company's knowledge, threatened
action, suit, proceeding or claim by others challenging the validity or scope of
any such Intellectual Property; (e) there is no pending or, to the Company's
knowledge, threatened action, suit, proceeding or claim by others that the
Company and its Subsidiaries infringe or otherwise violate any patent,
trademark, copyright, trade secret or other proprietary rights of others; (f) to
the Company's knowledge, there is no third-party U.S. patent or published U.S.
patent application which contains claims for which an Interference Proceeding
(as defined in 35 U.S.C. ss. 135) has been commenced against any patent or
patent application which constitutes the Intellectual Property described in the
Prospectus; and (g) the Company and its Subsidiaries have taken all steps
necessary to perfect its ownership of the Intellectual Property, in each of
clauses (a)-(g) except for such infringement, conflict or action which would
not, singularly or in the aggregate, reasonably be expected to result in a
Material Adverse Effect.
(r) NO VIOLATION OR DEFAULT. Neither the Company nor any of
its Subsidiaries is (i) in violation of any provision of its charter or bylaws
or similar organizational documents, (ii) is in default in any respect, and no
event has occurred which, with notice or lapse of time or both, would constitute
such a default, in the due performance or observance of any term, covenant, or
condition of any indenture, contract, lease, mortgage, deed of trust, note
agreement, loan agreement or other agreement, obligation, condition, covenant or
instrument to which it is a party or by which it is bound or to which any of its
property or assets is subject, or (iii) is in violation in any respect of any
statute, law, rule, regulation, ordinance, judgment, order or decree of any
court, regulatory body, administrative agency, governmental body, arbitrator or
other authority having jurisdiction over the Company, its Subsidiaries or any of
its properties of which it has knowledge, as applicable, except, with respect to
clauses (ii) and (iii), any violations or defaults which, singularly or in the
aggregate, would not reasonably be expected to result in a Material Adverse
Effect.
(s) PERMITS. The Company and each of its Subsidiaries has made
all filings, applications and submissions required by, and possesses all
approvals, licenses, certificates, certifications, clearances, consents,
exemptions, marks, notifications, orders, permits and other authorizations
issued by, the appropriate federal, state or foreign regulatory authorities
necessary to conduct its businesses as described in the Registration Statement
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and the Prospectus (collectively, "PERMITS"), except for such Permits the
failure of which to obtain would not reasonably be expected to result in a
Material Adverse Effect, and is in compliance with the terms and conditions of
all such Permits; all of such Permits held by the Company and each of its
Subsidiaries are valid and in full force and effect; there is no pending or, to
its knowledge, threatened action, suit, claim or proceeding which may cause any
such Permit to be limited, revoked, cancelled, suspended, modified or not
renewed, except for such limitations, revocations, cancellations, suspensions,
modifications or non-renewals that would not reasonably be expected to result in
a Material Adverse Effect; and the Company and each of its Subsidiaries has not
received any notice of proceedings relating to the limitation, revocation,
cancellation, suspension, modification or non-renewal of any such Permit which,
singly or in the aggregate, if the subject of an unfavorable decision, ruling or
finding, would reasonably be expected to result in a Material Adverse Effect,
whether or not arising from transactions in the ordinary course of business and
has no reason to believe that any such license, certificate, permit or
authorization will not be renewed in the ordinary course.
(t) TAXES. The Company and its Subsidiaries have timely filed
all federal, state, local and foreign income and franchise tax returns (or
timely filed applicable extensions therefore) required to be filed and are 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 or any of its Subsidiaries is contesting in good faith and for which
adequate reserves have been provided.
(u) LISTING. The AR-CombiMatrix Common Stock (including the
Shares and Investor Warrant Shares) is registered pursuant to Section 12(g) of
the Exchange Act and the Company, in the two years preceding the date hereof,
has not received any notification (written or oral) from the Nasdaq National
Market, any stock exchange, market or trading facility on which the
AR-CombiMatrix Common Stock is or has been listed (or on which it has been
quoted) to the effect that the Company is not in compliance with the listing or
maintenance requirements of such exchange, market or trading facility. The
Company shall comply with all requirements of the Nasdaq National Market with
respect to the issuance of the Securities and shall use its best efforts to have
the Shares and the Investor Warrant Shares listed on the Nasdaq National Market
on or before the Closing Date.
(v) INTERNAL CONTROLS. The Company and each of its
Subsidiaries 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.
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(w) DISCLOSURE CONTROLS. The Company has established and
maintains disclosure controls and procedures (as such term is defined in Rule
13a-15e and 15d-15e 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) provide for the
periodic evaluation of the effectiveness of such disclosure controls and
procedures as of the end of each of the Company's quarterly and annual fiscal
periods; and (iii), as of the end of the periods covered by each periodic report
filed under the Exchange Act and incorporated by reference into the Prospectus,
were effective in all material respects to perform the functions for which they
were established. The Company's auditors and the Audit Committee of the Board of
Directors have been advised of (i) any significant deficiency in the design or
operation of internal controls which could adversely affect the Company's
ability to record, process, summarize and report financial data or any material
weaknesses in internal controls; or (ii) any fraud, whether or not material,
that involves management or other employees who have a significant role in the
Company's internal controls. Since the date of the most recent evaluation of
such disclosure controls and procedures, there have been no changes that have
materially affected, or are reasonably likely to materially affect, the
Company's internal control over financial reporting, including any corrective
actions with regard to significant deficiencies and material weaknesses.
(x) 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 Prospectus and which is not so
described.
(y) NO REGISTRATION RIGHTS. Except as described in the
Prospectus, no person or entity has the right, contractual or otherwise, to
require registration of shares of AR-CombiMatrix Common Stock or other
securities of the Company because of the filing or effectiveness of the
Registration Statement or otherwise, except for persons and entities who have
expressly waived such right or who have been given proper notice and have failed
to exercise such right within the time or times required under the terms and
conditions of such right, and the Company is not required to file any
registration statement for the registration of any securities of any person or
register any such securities pursuant to any other registration statement filed
by the Company under the Securities Act for a period of at least 180 days after
the Effective Date.
(z) XXXXXXXX-XXXXX ACT. The principal executive officer and
principal financial officer of the Company have made all certifications required
by Sections 302 and 906 of the Xxxxxxxx-Xxxxx Act of 2002 and the rules and
regulations promulgated in connection therewith (the "XXXXXXXX-XXXXX ACT") with
respect to all reports, schedules, forms, statements and other documents
required to be filed by it with the Commission, and the statements contained in
any such certification are complete and correct. The Company, and to its
knowledge after due inquiry, all of the Company's directors or officers, in
their capacities as such, is in compliance in all material respects with all
applicable effective provisions of the Xxxxxxxx-Xxxxx Act (and intends to comply
with all applicable provisions that are not yet effective upon effectiveness).
10
(aa) COMPLIANCE WITH ENVIRONMENTAL LAWS. (i) The Company and
each of its Subsidiaries is in compliance in all material respects with all
rules, laws and regulation relating to the use, treatment, storage and disposal
of toxic substances and protection of human health and safety or the environment
("ENVIRONMENTAL LAWS") which are applicable to its business, except where the
failure to comply would not reasonably be expected to result in a Material
Adverse Effect; (ii) neither the Company nor its Subsidiaries has received any
written notice from any governmental authority or third party of an asserted
claim under Environmental Laws; (iii) the Company and each of its Subsidiaries
has received all material permits, licenses or other approvals required of it
under applicable Environmental Laws to conduct its business and is in compliance
with all material terms and conditions of any such permit, license or approval,
except where the failure to receive or comply would not reasonably be expected
to result in a Material Adverse Effect; (iv) to the Company's knowledge, no
facts currently exist that will require the Company or any of its Subsidiaries
to make future material capital expenditures to comply with Environmental Laws;
and (v) no property which is or has been owned, leased or occupied by the
Company or its Subsidiaries has been designated as a Superfund site pursuant to
the Comprehensive Environmental Response, Compensation of Liability Act of 1980,
as amended (42 U.S.C. Section 9601, et. seq.) ("CERCLA") or otherwise designated
as a contaminated site under applicable state or local law. Neither the Company
nor any of its Subsidiaries has been named as a "potentially responsible party"
under CERCLA.
(bb) COMPLIANCE WITH ERISA. Each of the Company and its
Subsidiaries has fulfilled its obligations, if any, under the minimum funding
standards of Xxxxxxx 000 xx xxx Xxxxxx Xxxxxx Employee Retirement Income
Security Act of 1974 ("ERISA") and the regulations and published interpretations
thereunder with respect to each "PLAN" (as defined in Section 3(3) of ERISA and
such regulations and published interpretations) in which employees of the
Company and its Subsidiaries are eligible to participate and each such plan is
in compliance in all material respects with the presently applicable provisions
of ERISA and such regulations and published interpretations. No "PROHIBITED
TRANSACTION" (as defined in Section 406 of ERISA, or Section 4975 of the
Internal Revenue Code of 1986, as amended from time to time (the "CODE")) has
occurred with respect to any employee benefit plan which could reasonably be
expected to result in a Material Adverse Effect. The Company and each of its
Subsidiaries has not incurred any unpaid liability to the Pension Benefit
Guaranty Corporation (other than for the payment of premiums in the ordinary
course) or to any such plan under Title IV of ERISA.
(cc) NO LABOR DISPUTES. No labor problem or dispute with the
employees of the Company or any of its Subsidiaries exists or, to the Company's
knowledge, is threatened or imminent, which would reasonably be expected to
result in a Material Adverse Effect. The Company is not aware that any key
employee or significant group of employees of the Company or any of its
Subsidiaries plans to terminate employment with the Company or any such
Subsidiary.
(dd) INSURANCE. The Company and each of its Subsidiaries is
insured by insurers of recognized financial responsibility against such losses
and risks and in such amounts as are prudent and customary in the businesses in
which they are engaged or propose to engage after giving effect to the
transactions described in the Prospectus; all policies of insurance and fidelity
or surety bonds insuring the Company and each of its Subsidiaries and their
11
businesses, assets, employees, officers and directors are in full force and
effect; the Company and each of its Subsidiaries is in compliance with the terms
of such policies and instruments in all material respects; and the Company and
each of its Subsidiaries 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
obtain similar coverage from similar insurers as may be necessary to continue
its business at a cost that is not materially greater than the current cost,
except where the failure to obtain would not reasonably be expected to result in
a Material Adverse Effect.
(ee) NO STABILIZATION. Neither the Company nor any of its
Subsidiaries nor, to its knowledge, any of their officers, directors, affiliates
or controlling persons has taken or will take, directly or indirectly, any
action designed or intended to stabilize or manipulate the price of any security
of the Company.
(ff) INVESTMENT COMPANY ACT. Neither the Company nor any of
its Subsidiaries is or, 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.
(gg) NO BROKER'S FEES. Neither the Company nor any of its
Subsidiaries is 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 its Subsidiaries or the Placement Agent for a brokerage
commission, finder's fee or like payment in connection with the offering and
sale of the Securities.
(hh) CONTRACTS. Each description of a contract, document or
other agreement in the Registration Statement and the Prospectus accurately
reflects in all material respects the terms of the underlying contract, document
or other agreement. Each contract, document or other agreement described in the
Registration Statement and Prospectus or listed in the exhibits to the
Registration Statement or incorporated therein by reference is in full force and
effect, unless validly terminated in accordance with the provisions thereof, and
is valid and enforceable by and against the Company or its Subsidiary, as the
case may be, in accordance with its terms, except as such enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the rights and remedies of creditors generally and subject to general
principles of equity. Neither the Company nor any of its Subsidiaries, if a
Subsidiary is a party, nor to the Company's knowledge, any other party, is in
default in the observance or performance of any term or obligation to be
performed by it under any such agreement, and no event has occurred which with
notice or lapse of time or both would constitute such a default, in any such
case which default or event, individually or in the aggregate, would reasonably
be expected to result in a Material Adverse Effect.
(ii) FORWARD-LOOKING STATEMENTS. No forward-looking statement
(within the meaning of Section 27A of the Securities Act and Section 21E of the
Exchange Act) contained in the Registration Statement and the Prospectus has
been made or reaffirmed without a reasonable basis or has been disclosed other
than in good faith.
12
(jj) CORPORATE RECORDS. All existing minute books of the
Company and each of its Subsidiaries, including all existing records of all
meetings and actions of the board of directors (including, Audit, Compensation
and Nomination/Corporate Governance Committees) and stockholders of the Company
through the date of the latest meeting and action (collectively, the "CORPORATE
RECORDS") have been made available to the Placement Agent and counsel for the
Placement Agent. All such Corporate Records are complete in all material
respects and accurately and fairly reflect, in reasonable detail, all
transactions referred to in such Corporate Records.
(kk) FOREIGN CORRUPT PRACTICES. Neither the Company nor any of
its Subsidiaries, nor, to the knowledge of the Company, any director, officer,
agent or employee of the Company or its Subsidiaries, has, directly or
indirectly, while acting on behalf of the Company or its Subsidiaries (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; (iv) made
any other unlawful bribe, rebate, payoff, influence, kickback or payment to any
foreign or domestic government official or employee.
(ll) OFF-BALANCE SHEET ARRANGEMENTS. There are no material
off-balance sheet arrangements (as defined in Item 303 of Regulation S-K) that
have or would reasonably be likely to have a material current or future effect
on the Company's financial condition, revenues or expenses, changes in financial
condition, results of operations, liquidity, capital expenditures or capital
resources, including those off-balance sheet transactions described in the
Commission's Statement about Management's Discussion and Analysis of Financial
Conditions and Results of Operations (Release Nos 33-8056; 34-45321; FR-61),
required to be described in the Prospectus which have not been so described.
(mm) REGULATORY FILINGS. Each of the Company and its
Subsidiaries has filed with the applicable regulatory authorities all filings,
declarations, listings, registrations, reports and submissions required to be
filed, except for Current Reports on Form 8-K where the failure to file would
not cause the Company to lose its eligibility for use of a registration
statement on Form S-3; all such filings, declarations, listings, registrations,
reports or submissions were in compliance with applicable laws when filed and no
deficiencies have been asserted by any applicable regulatory authority with
respect to any such filings, declarations, listings, registrations, reports or
submissions. To the Company's knowledge, there are no affiliations or
associations between any member of the National Association of Securities
Dealers, Inc. (the "NASD") and any of the Company's officers, directors or any
five percent (5%) or greater shareholders of the Company, except as set forth in
the Registration Statement and the Prospectus or otherwise disclosed in writing
to the Placement Agent.
(nn) NASD REVIEW. The Company satisfies the pre-1992
eligibility requirements for the use of a registration statement on Form S-3 in
connection with the Offering contemplated thereby (the pre-1992 eligibility
requirements for the use of the registration statement on Form S-3 include (i)
having a non-affiliate, public common equity float of at least $150 million or a
non-affiliate, public common equity float of at least $100 million and annual
trading volume of at least three million shares and (ii) having been subject to
the Exchange Act reporting requirements for a period of 36 months).
13
Any certificate signed by any officer of the Company and delivered to
the Placement Agent or to counsel for the Placement Agent shall be deemed a
representation and warranty by the Company to the Placement Agent as to the
matters covered thereby.
3. DELIVERY AND PAYMENT. On the Closing Date, in accordance with the
terms and conditions of each Investor's respective Subscription Agreement, the
Company shall sell to, and the Investor(s) shall purchase, the number of Shares
and Investor Warrants reflected on such Investor's Subscription Agreement
against payment by such Investor of such Investor's aggregate purchase price
therefor reflected in the Investor's Subscription Agreement.
4. COVENANTS. The Company covenants and agrees with the Placement Agent
as follows:
(a) EFFECTIVENESS. The Registration Statement has become
effective, and if Rule 430A is used or the filing of the Prospectus Supplement
is otherwise required pursuant to Rule 424(b), the Company shall prepare the
Prospectus Supplement in a form approved by the Placement Agent and file such
Prospectus pursuant to Rule 424(b) not later than the Commission's close of
business on the business day following the execution and delivery of this
Agreement, or, if applicable, such earlier time as may be required by the Rules
and Regulations.
(b) AMENDMENTS OR SUPPLEMENTS. The Company will not, during
such period as the Prospectus would be required by law to be delivered in
connection with sales of the Securities by the Placement Agent or a dealer in
connection with the offering contemplated by this Agreement, file any amendment
or supplement to the Registration Statement or the Prospectus, except as
required by law, 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.
(c) NOTICE TO PLACEMENT AGENT. The Company agrees (i) for so
long as the delivery of a prospectus is required in connection with the offering
or sale of the Securities, to advise the Placement Agent promptly after it
receives notice thereof, of the time when any post-effective amendment to the
Registration Statement has been filed or becomes effective or any supplement to
the Prospectus or any amended Prospectus has been filed and to furnish the
Placement Agent with copies thereof; (ii) to file promptly all reports and any
definitive proxy or information statements required to be filed by the Company
with the Commission pursuant to Section 13(a), 15 or 15(d) of the Exchange Act
subsequent to the date of the Prospectus Supplement and for so long as the
delivery of a prospectus is required in connection with the offering or sale of
the Securities; (iii) to advise the Placement Agent, promptly after it receives
notices thereof, (x) of any request by the Commission to amend the Registration
Statement or to amend or supplement the Prospectus or for additional information
with respect thereto, (y) 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 directed at any document incorporated by
14
reference therein or any amendment or supplement thereto or any order preventing
or suspending the use of the Prospectus or any amendment or supplement thereto,
or (z) of the suspension of the qualification of the Securities for offering or
sale in any jurisdiction, or of the institution or threatening of any proceeding
for any such purpose, or of any request by the Commission for the amending or
supplementing of the Registration Statement or the Prospectus or for additional
information; and, (iv) in the event of the issuance of any stop order or of any
order preventing or suspending the use of the Prospectus or suspending any such
qualification, promptly to use its reasonable best efforts to obtain the
withdrawal of such order.
(d) ONGOING COMPLIANCE OF THE PROSPECTUS. If, at any time when
a Prospectus relating to the Securities is required to be delivered under the
Act, the Company becomes aware of the occurrence of any event as a result of
which the Prospectus, as then amended or supplemented, would, in the reasonable
judgment of counsel to the Company or counsel to the Placement Agent, include
any 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
circumstances under which they were made, not misleading, or the Registration
Statement, as then amended or supplemented, would, in the reasonable judgment of
counsel to the Company or counsel to the Placement Agent, include any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements therein not misleading, or if for any other reason it is
necessary, in the reasonable judgment of counsel to the Company or counsel to
the Placement Agent, at any time to amend or supplement the Prospectus or the
Registration Statement to comply with the Act or the Rules and Regulations, the
Company will promptly notify the Placement Agent and, subject to Section 4(b)
hereof, will promptly prepare and file with the Commission, at the Company's
expense, an amendment to the Registration Statement or an amendment or
supplement to the Prospectus that corrects such statement or omission or effects
such compliance and will deliver to the Placement Agent, without charge, such
number of copies thereof as the Placement Agent may reasonably request. The
Company consents to the use of the Prospectus or any amendment or supplement
thereto by the Placement Agent, and the Placement Agent agrees to provide to
each Investor, prior to the Closing, a copy of the Prospectus and any amendments
or supplements thereto.
(e) DELIVERY OF COPIES. To deliver promptly to the Placement
Agent and its counsel such number of the following documents as the Placement
Agent shall reasonably request: (i) conformed copies of the Registration
Statement as originally filed with the Commission and each amendment thereto (in
each case excluding exhibits), (ii) so long as a prospectus relating to the
Securities is required to be delivered under the Securities Act, as many copies
of the Prospectus or any amendment or supplement thereto; (iii) any document
incorporated by reference in the Prospectus 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. The Company will pay
the expenses of printing or other production of all documents relating to the
Offering.
(f) USE OF PROCEEDS. The Company will apply the net proceeds
from the sale of the Securities in the manner set forth in the Prospectus
[Supplement] under the heading "Use of Proceeds".
(g) REPORTS. During a period of three years commencing with
the date hereof, the Company will furnish to the Placement Agent, copies of all
periodic and special reports furnished to the stockholders of the Company and
15
all information, documents and reports filed with the Commission, the NASD,
Nasdaq or any securities exchange (other than any such information, documents
and reports that are filed with the Commission electronically via XXXXX or any
successor system).
(h) BLUE SKY COMPLIANCE. 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 securities, or blue sky,
laws of such jurisdictions as the Placement Agent may designate and to continue
such qualifications in effect for so long as required for the distribution of
the Securities and will pay the fee, if any, of the NASD in connection with its
review of the Offering. The Company shall not 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.
(i) 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, 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, any shares of AR-CombiMatrix Common Stock, any
securities convertible into or exercisable or exchangeable for AR-CombiMatrix
Common Stock; or (2) enter into any swap or other agreement that transfers, in
whole or in part, any of the economic consequences of ownership of the
AR-CombiMatrix Common Stock, whether any such transaction described in clause
(1) or (2) above is to be settled by delivery of AR-CombiMatrix Common Stock or
such other securities, in cash or otherwise, without the prior written consent
of Xxxxx Xxxxxxx & Co. (which consent may be withheld in its sole discretion),
other than (i) the Securities to be sold, (ii) securities issued pursuant to
stock option plans, deferred compensation plans, restricted stock plans and
employee stock purchase plans existing on, or upon the conversion or exchange of
convertible or exchangeable securities outstanding as of, the date of this
Agreement; (iii) the issuance by the Company of any shares of AR-CombiMatrix
Common Stock pursuant to the exercise of the Investor Warrants or 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 (iii) agrees that all such
shares remain subject to restrictions substantially similar to those contained
in this subsection; (iv) the offer, issuance or sale of any securities of the
Company in exchange for any "underwater" options of the Company; 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 NASD 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 Xxxxx Xxxxxxx & Co. 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.
16
(j) LOCK-UP AGREEMENTS. The Company will cause each of its
executive officers and directors whose names are set forth on EXHIBIT D hereto
to furnish to the Placement Agent, prior to the Closing Date, a letter,
substantially in the form of EXHIBIT C 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 AR-CombiMatrix Common Stock with
respect to any transaction or contemplated transaction that would constitute a
breach or default under the applicable Lock-Up Agreement.
(k) PRESS RELEASES. 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 Subsidiaries, its
condition, financial or otherwise, or earnings, business affairs or business
prospects (except for routine oral marketing communications in the ordinary
course of business and consistent with the past practices of the Company and of
which the Placement Agent is notified), without the prior written consent of the
Placement Agent, unless in the reasonable judgment of the Company and its
counsel, and after notification to the Placement Agent, such press release or
communication is required by law.
(l) COMPLIANCE WITH LAWS. The Company will comply in all
material respects with all applicable securities and other applicable laws,
rules and regulations, including, without limitation, the Xxxxxxxx-Xxxxx Act,
and use its best efforts to cause the Company's directors and officers, in their
capacities as such, to comply with such laws, rules and regulations, including,
without limitation, the provisions of the Xxxxxxxx-Xxxxx Act.
(m) MAINTENANCE OF INTERNAL PROCEDURES. The Company and its
Subsidiaries will maintain such controls and other procedures, including without
limitation those required by Sections 302 and 906 of the Xxxxxxxx-Xxxxx Act and
the applicable regulations thereunder, that are designed to ensure that
information required to be disclosed by the Company in the reports that it files
or submits under the Exchange Act is recorded, processed, summarized and
reported within the time periods specified in the Commission's rules and forms,
including without limitation, controls and procedures designed to ensure that
information required to be disclosed by the Company in the reports that it files
or submits under the Exchange Act is accumulated and communicated to the
Company's management, including its principal executive officer and its
principal financial officer, or persons performing similar functions, as
appropriate to allow timely decisions regarding required disclosure, to ensure
that material information relating to Company, including its Subsidiaries, is
made known to them by others within those entities.
(n) TRANSFER AGENT. The Company shall engage and maintain, at
its expense, a registrar and transfer agent for the Securities.
(o) RESERVATION OF STOCK. The Company shall reserve and keep
available at all times a sufficient number of shares of AR-CombiMatrix Common
Stock for the purpose of enabling the Company to issue the Investor Warrant
Shares.
17
(p) LISTING. The Company shall use its best efforts to cause
the qualification of the Shares for quotation on the Nasdaq National Market.
5. PAYMENT OF EXPENSES. The Company, whether or not the transactions
contemplated hereunder are consummated or this Agreement is terminated, will pay
or cause to be paid all costs and expenses incident to the performance of the
obligations of the Company under this Agreement, including but not limited to
costs and expenses of or relating to (i) the preparation, printing, filing,
delivery, and shipping (including costs of mailing) of the Registration
Statement (including the financial statements therein and all amendments,
schedules, and exhibits thereto), the Base Prospectus, each Prospectus
Supplement, the Prospectus, and any amendment thereof or supplement thereto,
(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) all filing fees and fees
and disbursements of the Placement Agent's counsel incurred in connection with
the registration or qualification of the Securities for offering and sale by the
Company under the securities or blue sky laws of such jurisdictions designated
pursuant to Section 4(i), including the preparation and printing of preliminary,
supplemental and final Blue Sky Memoranda, (iv) the fees and expenses of any
transfer agent or registrar for the Securities, (v) fees, disbursements and
other charges of counsel to the Company, (vi) if applicable, the filing fees of
the NASD in connection with its review of the terms of the public offering and
reasonable fees and disbursements of counsel for the Placement Agent in
connection with such review (including all COBRADesk fees), (vii) listing fees,
if any, for the quotation of the AR-CombiMatrix Common Stock on the Nasdaq
National Market, (viii) fees and disbursements of the Auditors incurred in
delivering the letter(s) described in Section 6(g) of this Agreement, and (ix)
the reasonable costs and expenses of the Company and the Placement Agent
incurred 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, (A) expenses associated with the production of road show
slides and graphics, (B) fees and expenses of any consultants engaged with the
consent of the Company in connection with the road show presentations, and (C)
travel, lodging and other expenses incurred by the officers of the Company and
any such consultants.
6. CONDITIONS OF PLACEMENT AGENT'S OBLIGATIONS. The obligations of the
Placement Agent hereunder are subject to the following conditions:
(a) No stop order suspending the effectiveness of the
Registration Statement or the qualification or registration of the Securities
under the securities or Blue Sky laws of any jurisdiction shall be in effect and
no proceedings for that purpose shall have been initiated or threatened by any
securities or other governmental authority (including, without limitation, the
Commission), and any request for additional information on the part of the staff
of any securities or other governmental authority (including, without
limitation, the Commission) shall have been complied with to the satisfaction of
the staff of the Commission or such other authorities and after the date hereof
no amendment or supplement to the Registration Statement or the Prospectus shall
have been filed unless a copy thereof was first submitted to the Placement Agent
and the Placement Agent did not reasonably object thereto in good faith.
18
(b) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, there shall not have
been (i) any change in the capital stock or long-term debt of the Company or any
of its Subsidiaries or any change, or any development involving a prospective
change, whether or not arising from transactions in the ordinary course of
business, in or affecting the business, general affairs, management, financial
position, stockholders' equity, results of operations or prospects of the
Company and its Subsidiaries, taken as a whole, or (ii) any loss or interference
with its business from fire, explosion, storm, flood, act of war, terrorist act
or other calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree, otherwise than as set
forth in or contemplated by the Registration Statement or the Prospectus, the
effect of which, in any such case described in clauses (i) and (ii) above, is,
in the judgment of the Placement Agent, so material and adverse as to make it
impracticable or inadvisable to proceed with the sale or delivery of the
Securities on the terms and in the manner contemplated by the Prospectus.
(c) The Placement Agent shall not have discovered and
disclosed to the Company on or prior to the Closing Date that (i) the
Registration Statement, or any amendment or supplement thereto contains an
untrue statement of a fact which, in the opinion of the Placement Agent, is
material, or omits to state any fact which, in the opinion of the Placement
Agent, is material and is required to be stated therein or is necessary to make
the statements therein not misleading, or (ii) the Prospectus, or any amendment
or supplement thereto contains an untrue statement of a fact which, in the
opinion of the Placement Agent, is material, or omits to state any fact which,
in the opinion of the Placement Agent, is material and is required to be stated
therein or is necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
(d) Each of the representations and warranties of the Company
contained herein shall be true and correct at the Closing Date, as if made on
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.
(e) The Placement Agent shall have received from Xxxxxxxxx
Xxxxxxx, LLP, corporate 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 as is set forth on EXHIBIT E attached hereto. Such counsel
shall also have furnished to the Placement Agent and the Investors a written
statement, addressed to the Placement Agent and the Investors and dated the
Closing Date, in form and substance reasonably satisfactory to the Placement
Agent as set forth in EXHIBIT F attached hereto.
(f) 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, and the Company shall have furnished to such counsel
such documents as it requests for the purpose of enabling it to pass upon such
matters.
19
(g) Concurrently with the execution and delivery of this
Agreement, or, if the Company elects to rely on Rule 430A, on the date of the
Prospectus Supplement, the Auditors shall have furnished to the Placement Agent
a letter, dated the date of its delivery (the "ORIGINAL LETTER"), addressed to
the Placement Agent and in form and substance reasonably satisfactory to the
Placement Agent, containing statements and information of the type customarily
included in accountants' "comfort letters" to underwriters. At the Closing Date,
the Auditors shall have furnished to the Placement Agent a letter, dated the
date of its delivery, 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 .
(h) The Placement Agent shall have received on the Closing
Date a certificate, addressed to the Placement Agent and the Investors 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) the representations, warranties and agreements of
the Company in this Agreement were true and correct when made and are true and
correct as of 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) the Registration Statement is effective and, to
their knowledge, as of the Closing Date, no stop order or other order suspending
the effectiveness of the Registration Statement or any amendment thereof or the
qualification of the Securities for offering or sale has been issued, and no
proceeding for that purpose has been instituted or are pending before or are
contemplated by the Commission or any state or regulatory body;
(iii) the signers of said certificate have carefully
examined the Registration Statement 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 Prospectus), and (A) the
Registration Statement, or any amendment thereof, does not contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not misleading, and
the Prospectus, as amended or supplemented, does not include any untrue
statement of material fact or omit to state a material fact necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading, and (B) no event has occurred as a result of which it is
necessary to amend or supplement the Prospectus in order to make the statements
therein not untrue or misleading in any material respect; and
20
(iv) subsequent to the date of the most recent
financial statements included or incorporated by reference in the Prospectus,
there has been no change in the financial position or results of operation of
the Company and its Subsidiaries that would reasonably be expected to result in
a Material Adverse Effect, or any change, or any development including a
prospective change, in or affecting the condition (financial or otherwise),
results of operations, business or prospects of the Company and its Subsidiaries
taken as a whole, except as set forth in the Prospectus.
(i) The Shares and the Investor Warrant Shares shall have been
approved for quotation on the Nasdaq National Market and listed and admitted and
authorized for trading on the Nasdaq National Market, subject only to official
notice of issuance. Satisfactory evidence of such actions shall have been
provided to the Placement Agent.
(j) 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.
(k) The Prospectus Supplement shall have been filed with the
Commission pursuant to Rule 424(b) under the Securities Act before 5:30 P.M. New
York City time on the business day after the date of this Agreement.
(l) 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.
(m) The Company shall have entered into Subscription
Agreements with each of the Investors.
(n) The NASD shall have raised no objection to the fairness
and reasonableness of the placement agency terms and arrangements.
(o) The Placement Agent shall have received copies of the
executed Lock-Up Agreements executed by each person listed on EXHIBIT D hereto,
and such Lock-Up Agreements shall be in full force and effect on the Closing
Date.
(p) 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.
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. The Company will furnish you with such
conformed copies of such opinions, certificates, letters and other documents as
you shall reasonably request.
21
7. INDEMNIFICATION AND CONTRIBUTION.
(a) INDEMNIFICATION OF THE PLACEMENT AGENT. The Company agrees
to indemnify and hold harmless the Placement Agent against any losses, claims,
damages or liabilities, joint or several, to which such Placement Agent may
become subject, under the Act or otherwise (including in settlement of any
litigation if such settlement is effected with the written consent of the
Company), insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon (i) an untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement, the Prospectus, or any amendment or supplement thereto, or in any
materials or information provided to investors by, or with the approval of, the
Company in connection with the marketing of the offering of the AR-CombiMatrix
Common Stock ("MARKETING MATERIALS"), including any roadshow or investor
presentations made to investors by the Company (whether in person or
electronically), (ii) the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, (iii) any breach of the representations and warranties
of the Company contained herein, (iv) any failure of the Company to perform its
obligations hereunder or under law, or (v) any act or failure to act or alleged
act or failure to act by such Placement Agent in reliance upon (i), (ii), (iii)
or (iv), and in connection with, or relating in any manner to the Securities or
the offering contemplated hereby, and which is included as part of or referred
to in any loss, claim, damage or liability arising out of or based upon any
matter covered by clause (i), (ii), (iii) or (iv) above; PROVIDED, HOWEVER, that
the Company shall not be liable under this clause (v) to the extent that a court
of competent jurisdiction shall have determined by a final judgment that such
loss, claim, damage or liability resulted directly and solely from any such acts
or failures to act undertaken or omitted to be taken by such Placement Agent
through its gross negligence, bad faith or willful misconduct, and will
reimburse each Placement Agent for any legal or other expenses reasonably
incurred by it in connection with investigating or defending against such loss,
claim, damage, liability or action; and PROVIDED, FURTHER, that the Company
shall not be liable under clause (ii) or (iii) to the extent that any such loss,
claim, damage, liability or action arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission made in
the Registration Statement, the Prospectus, or any such amendment or supplement,
or in any Marketing Materials, in reliance upon and in conformity with written
information furnished to the Company by the Placement Agent specifically for use
in the preparation thereof; and PROVIDED, FURTHER, that the Company will not be
liable to the Placement Agent under this Section 7(a) with respect to any loss,
claim, damage or liability arising out of or based upon any untrue statement of
a material fact or alleged untrue statement of a material fact or omission or
alleged omission to state a material fact in the Prospectus which is corrected
in an amended Prospectus if the person asserting such loss, claim, damage or
liability purchased any of the Securities but was not sent or given a copy of
such amended Prospectus at or prior to the written confirmation of the sale of
such Securities to such person.
In addition to its other obligations under this Section 7(a),
the Company agrees that it will reimburse the Placement Agent for all reasonable
legal fees or other expenses incurred in connection with investigating or
defending any such claim, action, investigation, inquiry or other proceeding,
described in this Section 7(a), as such fees and expenses are incurred. To the
extent that any portion, or all, of any such reimbursement payments or advances
are held to have been improper by a court of competent jurisdiction, the
Placement Agent shall be required to return such amounts to the Company within
ten (10) days after receipt of written notice from such court of competent
22
jurisdiction that such reimbursement payments were improper. Any such
reimbursement payments not returned to the Company within such 10 day period
shall accrue interest, compounded daily from such tenth day until such time of
payment, determined on the basis of the prime rate (or other commercial lending
rate for borrowers of the highest credit standing) announced from time to time
by U.S. Bank (the "PRIME RATE").
(b) INDEMNIFICATION OF THE COMPANY. The Placement Agent will
indemnify and hold harmless the Company against any losses, claims, damages or
liabilities to which the Company may become subject, under the Act or otherwise
(including in settlement of any litigation, if such settlement is effected with
the written consent of such Placement Agent), insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon an untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement, the Prospectus, or any amendment or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, in each case 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, the Prospectus, or any such amendment or supplement, in reliance upon
and in conformity with written information furnished to the Company by such
Placement Agent, specifically for use in the preparation thereof, and will
reimburse the Company for any legal or other expenses reasonably incurred by the
Company in connection with investigating or defending against any such loss,
claim, damage, liability or action. To the extent that any portion, or all, of
any such reimbursement payments or advances are held to have been improper by a
court of competent jurisdiction, the Company must return such amounts to the
Placement Agent within ten (10) days after receipt of written notice from such
court of competent jurisdiction that such reimbursement payments were improper.
Any such reimbursement payments not returned to the Placement Agent within such
10 day period shall accrue interest, compounded daily from such tenth day until
such time of payment, determined on the basis of the Prime Rate.
(c) NOTICE AND PROCEDURES. Promptly after receipt by an
indemnified party under subsection (a) or (b) above of notice of the
commencement of any action, such indemnified party shall, if a claim in respect
thereof is to be made against the indemnifying party under such subsection,
notify the indemnifying party in writing of the commencement thereof; but the
omission so to notify the indemnifying party shall not relieve the indemnifying
party from any liability that it may have to any indemnified party except to the
extent such indemnifying party has been materially prejudiced by such failure.
In case any such action shall be brought against any indemnified party, and it
shall notify the indemnifying party of the commencement thereof, the
indemnifying party shall be entitled to participate in, and, to the extent that
it shall wish, jointly with any other indemnifying party similarly notified, to
assume the defense thereof, with counsel reasonably satisfactory to such
indemnified party, and after notice from the indemnifying party to such
indemnified party of the indemnifying party's election so to assume the defense
thereof, the indemnifying party shall not be liable to such indemnified party
under such subsection for any legal or other expenses subsequently incurred by
such indemnified party in connection with the defense thereof other than
reasonable costs of investigation; PROVIDED, HOWEVER, that if, in the sole
judgment of the indemnified party, it is advisable for the indemnified party to
be represented by separate counsel, the indemnified party shall have the right
to employ a separate counsel to represent it, in which event the reasonable fees
23
and expenses of such separate counsel shall be borne by the indemnified party or
parties except to the extent that (i) the employment thereof has been
specifically authorized by the indemnifying party in writing, (ii) the
indemnifying party has failed after a reasonable period of time to assume such
defense and to employ counsel or (iii) in such action there is, in the
reasonable opinion of such separate counsel, a material conflict on any material
issue between the position of the indemnifying party and the position of the
indemnified party, it being understood, however, that the indemnifying party
shall not, in connection with any such action, be liable for the reasonable fees
and expenses of more than one separate firm of attorneys at any time for all
such indemnified parties. An indemnifying party shall not be obligated under any
settlement agreement relating to any action under this Section 7 to which it has
not agreed in writing. In addition, no indemnifying party shall, without the
prior written consent of the indemnified party, effect any settlement of any
pending or threatened proceeding unless such settlement includes an
unconditional release of such indemnified party for all liability on claims that
are the subject matter of the proceeding.
(d) CONTRIBUTION; LIMITATION ON LIABILITY. If the
indemnification provided for in this Section 7 is unavailable or insufficient to
hold harmless an indemnified party under subsection (a) or (b) above, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of the losses, claims, damages or liabilities
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 Company on the one hand and the Placement Agent on the other in connection
with the statements or omissions that resulted in such losses, claims, damages
or liabilities, 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 shall be deemed to be in the same proportion as the total net
proceeds from the offering (before deducting expenses) received by the Company
bear to the total placement agent commissions received by the Placement Agent,
in each case as set forth in the table on the cover page of the Prospectus. The
relative fault 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 or the Placement Agent 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 contributions pursuant to this subsection (d) were
to be determined by pro rata allocation (even if the Placement Agents were
treated as one entity for such purpose) or by any other method of allocation
which does not take account of the equitable considerations referred to in the
first sentence of this subsection (d). The amount paid by an indemnified party
as a result of the losses, claims, damages or liabilities referred to in the
first sentence of this subsection (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 subsection (d). Notwithstanding the provisions of this subsection (d), the
Placement Agent shall not be required to contribute any amount in excess of the
amount by which (x) the total price at which the Securities placed by it and
distributed to the public were offered to the public exceeds (y) the amount of
any damages that the Placement Agent has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
24
(e) NON-EXCLUSIVE REMEDIES. The obligations of the Company
under this Section 7 shall be in addition to any liability which the Company may
otherwise have and shall extend, upon the same terms and conditions, to each
person, if any, who controls the Placement Agent within the meaning of the Act;
and the obligations of the Placement Agent under this Section 7 shall be in
addition to any liability that the Placement Agent may otherwise have and shall
extend, upon the same terms and conditions, to each director of the Company
(including any person who, with his consent, is named in the Registration
Statement as about to become a director of the Company), to each officer of the
Company who has signed the Registration Statement and to each person, if any,
who controls the Company within the meaning of the Act.
8. REPRESENTATIONS AND AGREEMENTS TO SURVIVE DELIVERY. All
representations, warranties, and agreements of the Company herein or in
certificates delivered pursuant hereto, and the agreements of the Placement
Agent and the Company contained in Section 7 hereof, shall remain operative and
in full force and effect regardless of any investigation made by or on behalf of
the Placement Agent or any controlling person thereof, or the Company or any of
its officers, directors, or controlling persons and shall survive delivery of,
and payment for, the Securities.
9. 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, prior to delivery and payment for the Securities (i) trading on or
by any of the New York Stock Exchange, the American Stock Exchange or the Nasdaq
National Market in the Company's Securities shall have been suspended or
materially limited by the SEC or by NASD, (ii) trading of any securities issued
or guaranteed by the Company shall have been suspended on any exchange or in any
over-the-counter market, (iii) minimum or maximum prices for trading shall have
been generally fixed, or maximum ranges for prices for securities shall have
been required, on the New York Stock Exchange, the American Stock Exchange or
the Nasdaq National Market, by such exchange or by order of the Commission or
any other governmental authority having jurisdiction, (iv) a general banking
moratorium shall have been declared by federal or New York state authorities or
a material disruption in commercial banking or securities settlement or
clearance services in the United States, (v) there shall have occurred any
outbreak or escalation of hostilities or acts of terrorism within or outside the
United States or there shall have been a declaration of a national emergency or
war by the United States, (vi) any change in general economic, political or
financial conditions in the United States or elsewhere or any other calamity or
crisis, or (vii) there has been any Material Adverse Effect, if the effect of
any such event specified in clause (v), (vi) or (vii), 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 and the Prospectus.
Any such termination shall be without liability of any party to any other party
except that the provisions of Section 5, Section 7 and Section 12 hereof shall
at all times be effective notwithstanding such termination.
25
(b) If this Agreement shall be terminated pursuant to any of
the provisions hereof (other than a termination of the Placement Agent's
engagement pursuant to Section 9(a)), or if the sale of the Securities provided
for herein is not consummated by reason of any failure, refusal or inability on
the part of the Company to perform any agreement on its part to be performed, or
because any other condition of the Placement Agent's obligations hereunder
required to be fulfilled by the Company is not fulfilled, the Company will,
subject to demand by the Placement Agent, reimburse the Placement Agent for all
reasonable out-of-pocket disbursements (including reasonable fees and
disbursements of counsel) incurred by the Placement Agent in connection with
this Agreement and the proposed offering of the Securities.
10. NOTICES. All statements, requests, notices and agreements hereunder
shall be in writing, and:
(a) if to the Placement Agent, shall be delivered or sent by mail,
telex or facsimile transmission to Xxxxx Xxxxxxx & Co., U.S. Bancorp
Center, 000 Xxxxxxxx Xxxx, Xxxxxxxxxxx, Xxxxxxxxx 00000, Attention:
Xxxxx Xxxxxx, Esq. (Fax: 000-000-0000), with a copy to: Xxxxxxxxxx
Xxxxxxx PC, 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Xxxxxxx X. Xxxxxx, Esq. (Fax: 000-000-0000);
(b) if to the Company shall be delivered or sent by mail, telex or
facsimile transmission to Acacia Research Corporation, 000 Xxxxxxx
Xxxxxx Xxxxx, 0xx Xxxxx, Xxxxxxx Xxxxx, Xxxxxxxxxx 00000, Attention:
Chief Financial Officer (Fax: 000-000-0000), with a copy to: Xxxxxxxxx
Traurig, LLP, 000 Xxxx Xxxxxx Xxxxx, Xxxxx 0000, Xxxxx Xxxx, Xxxxxxxxxx
00000, Attention: Xxxxxxx X. Xxx, Esq. (Fax: 000-000-0000) and Xxxxxx
Xxxxxxxx, Esq. (Fax: 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
11. PERSONS ENTITLED TO BENEFIT OF AGREEMENT. This Agreement shall
inure to the benefit of and shall be binding upon the Placement Agent, the
Investors, the Company, and their respective successors and assigns and the
controlling persons, officers and directors referred to in Section 7. 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 by
reason merely of such purchase.
12. 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.
13. 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.
26
14. . GENERAL PROVISIONS. Except for the Engagement Letter entered into
between the Company and the Placement Agent in connection with the transactions
contemplated herein, this Agreement, together with all exhibits and schedules
hereto and thereto constitutes the entire agreement and understanding of the
parties with respect to the subject matter hereof and supersedes any and all
prior negotiations, correspondence, agreements, understandings, duties or
obligations between the parties with respect to the subject matter hereof. This
Agreement may not be amended or modified unless in writing by all of the parties
hereto, and no condition herein (express or implied) may be waived unless waived
in writing by each party whom the condition is meant to benefit. Section
headings herein are for the convenience of the parties only and shall not affect
the construction or interpretation of this Agreement.
[Signature Page Follows]
27
EXHIBIT __
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,
ACACIA RESEARCH CORPORATION
By: /S/ XXXX X. XXXX
-------------------------------------------
Name: Xxxx X. Xxxx
Title: Chairman and Chief Executive Officer
Accepted as of the date first above written:
XXXXX XXXXXXX & CO.
By: /S/ XXXXX X. XXXXXXXXX
------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: Principal
SCHEDULES AND EXHIBITS
----------------------
Schedule I: Subsidiaries of the Company
Exhibit A: Form of Subscription Agreement
Exhibit B: Form of Investor Warrant
Exhibit C: Form of Lock-Up Agreement
Exhibit D: List of Directors and Executive Officers Executing Lock-Up
Agreements
Exhibit E: Matters to be Covered in the Opinion of Corporate Counsel to the
Company
Exhibit F: Form of Written Statement of Corporate Counsel to the Company
SCHEDULE I
SUBSIDIARIES OF THE COMPANY
NAME PERCENT OWNED JURISDICTION OF INCORPORATION
---- ------------- -----------------------------
CombiMatrix Corporation 100% Delaware
Soundview Technologies Incorporated 100% Delaware
Acacia Media Technologies Corporation 100% Delaware
Advanced Material Sciences Inc. 99% Delaware
CombiMatrix Molecular Diagnostics, Inc. 100% Delaware
CombiMatrix K.K. 100% Japan
(held by CombiMatrix Corporation)
EXHIBIT A
FORM OF SUBSCRIPTION AGREEMENT
EXHIBIT B
FORM OF INVESTOR WARRANT
EXHIBIT C
FORM OF LOCK-UP AGREEMENT
EXHIBIT D
LIST OF DIRECTORS AND EXECUTIVE OFFICERS
EXECUTING LOCK-UP AGREEMENTS
Xxxx X. Xxxx
Xxxxxx X. Xxxx
Xxxxxx Xxxxxx
Xxxx X. de Boom
Xxxxxx X. Xxxxxxx
Xxxxxx X. Xxxxxx
G. Xxxxx Xxxxxxxxx
Xxxx Xxxxx
Xxxxxxx X. Xxxxxx
Xxxxxx X. Xxxxxx
EXHIBIT E
MATTERS TO BE COVERED IN THE
OPINION OF COUNSEL TO THE COMPANY
1. The Company and each of its Subsidiaries is a corporation, validly
existing and in good standing under the laws of the state of its respective
incorporation. The Company has the corporate power and authority necessary to
own or hold its properties, to conduct its business as described in the
Registration Statement and the Prospectus and to enter into and perform its
obligations under the Placement Agency Agreement, the Investor Warrants, and the
Subscription Agreements
2. The Company has an authorized capitalization as set forth in the
Registration Statement and the Prospectus and all of the outstanding shares of
AR-CombiMatrix Common Stock of the Company as of immediately prior to the
Closing are duly authorized, validly issued and fully paid and nonassessable;
and to our knowledge, none of the outstanding shares of capital stock of the
Company was issued in violation of any statutory, contractual preemptive or
other similar rights of any securityholder of the Company.
3. The Shares have been duly and validly authorized and, when issued
and delivered to the Investors and paid for in accordance with the terms of the
Placement Agency Agreement and the Subscription Agreements, will be validly
issued, fully paid and nonassessable. The Investor Warrant Shares to be issued
from time to time upon the exercise of the Investor Warrants have been duly and
validly authorized and, upon payment of the exercise price in accordance with
the terms of the Investor Warrants will be validly issued, fully paid and
nonassessable. The Securities and the AR-CombiMatrix Common Stock conform as to
legal matters to the description thereof contained in the Registration Statement
and the Prospectus.
4. The issuance of the Shares, the Investor Warrant Shares and the
Placement Agent Warrant Shares is not subject to any statutory preemptive right
or, to our knowledge, other similar rights of any securityholder of the Company.
5. Each of the Placement Agency Agreement, the Investor Warrants, and
the Subscription Agreements has been duly and validly authorized, executed and
delivered by the Company and constitutes the legal, valid and binding obligation
of the Company, enforceable against the Company in accordance with its terms.
6. The execution of the Placement Agency Agreement, the Investor
Warrants and the Subscription Agreements by the Company, and the consummation by
the Company of the transactions contemplated thereunder to be consummated on the
Closing Date, will not (a) result in any violation of or conflict with any
provision of the Company's Certificate of Incorporation or Bylaws, (b) violate
or conflict with the General Corporations Law of the State of Delaware or any
statute of the United States or the State of California or any order, rule or
regulation of any governmental agency or body of the United States or the State
of California that in our experience is normally applicable to the transactions
of the type contemplated by the Placement Agency Agreement or the Subscription
Agreements.
7. The Company is not in violation of any provision of its Certificate
of Incorporation or its Bylaws and, to our knowledge, the Company is not in
material default in the performance of any obligation, agreement, covenant or
condition contained in any document filed as exhibit to the Registration
Statement or incorporated by reference therein.
8. No consent, approval, authorization or order of, or qualification
with, any governmental body or agency is required for the performance by the
Company of its obligations under the Placement Agency Agreement, the Investor
Warrants or the Subscription Agreements, except: (i) such as have been obtained
under the Act and (ii) such as may be required by the securities or Blue Sky
laws of the various states in connection with the offer and sale of the Shares
by the Company, as to which we express no opinion:
9. To our knowledge, there is not pending or threatened any action,
suit, proceeding, inquiry or investigation, to which the Company or any of its
subsidiaries are parties, or to which the property of the Company or its
subsidiaries are subject, before or brought by any court or governmental
authority, arbitration board or tribunal, domestic or foreign, that is required
to be described in the Prospectus and is not so described therein.
10. Each of the Registration Statement and the Prospectus (other than
the financial statements, schedules and other financial data included or
incorporated by reference therein, as to which no opinion is expressed), on the
date it was filed with the Commission, complied as to form in all material
respects with the requirements of the Securities Act; and the documents
incorporated by reference in the Registration Statement and the Prospectus
(other than the financial statements, schedules and other financial data
included or incorporated by reference therein, as to which no opinion is
expressed), at the time they became effective or were filed with the Commission,
complied in all material respects with the requirements of the Exchange Act and
the rules and the rules and regulations of the Commission promulgate thereunder.
11. The Company is not, and will not be after the giving effect to the
offering and sale of the Securities and the application of the proceeds thereof
as described in the Prospectus, an "investment company" as defined in the
Investment Company Act of 1940, as amended.
12. The Registration Statement is effective under the Securities Act,
and, to our knowledge, no stop order suspending the effectiveness of the
Registration Statement or any post-effective amendment thereof has been issued
and no proceedings therefore have been initiated or threatened by the Commission
and all filings required by Rule 424(b) and Rule 430(A) promulgated under the
Securities Act have been made,
13. To our knowledge, no person or entity has the right to require the
registration of shares of AR-CombiMatrix Common Stock or other equity securities
of the Company (including securities that are convertible into or exchangeable
for the Company's equity securities) because of the filing or effectiveness of
the Registration Statement or the completion of the Offering.
EXHIBIT F
FORM OF WRITTEN STATEMENT OF
CORPORATE COUNSEL TO THE COMPANY
In addition, such counsel shall state that, during the course of the
preparation of the Prospectus Supplement, such counsel has participated in
discussions and conferences with officers and other representatives of the
Company, representatives of the independent public accountants, representatives
of the Placement Agent and representatives of counsel for the Placement Agent,
at which conferences the contents of the Registration Statement, Base Prospectus
and Prospectus Supplement and related matters were discussed, and that, although
such counsel has not independently verified and is not passing upon the
accuracy, completeness or fairness of the statements contained in the
Registration Statement, the Base Prospectus and the Prospectus Supplement, on
the basis of the foregoing, no information has come to such counsel's attention
that has caused such counsel to believe that (except for financial statements
and schedules and other financial data derived therefrom as to which such
counsel need not express any view) (x) the Registration Statement, as of its
effective date, contains any untrue statement of a material fact or omits to
state a material fact necessary in order to make the statements therein not
misleading or (y) the Base Prospectus or the Prospectus Supplement, as of their
respective dates or the Closing Date, contains any untrue statement of a
material fact or omits 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.
