Exhibit 10.1

 

EXECUTION COPY

1,200,000 Shares

of IMMTECH PHARMACEUTICALS, INC.

Common Stock ($0.01 par value)

PLACEMENT AGENCY AGREEMENT

February 7, 2007

 

Ferris, Baker Watts, Incorporated

Attn: Scott T. Bass, Vice President, Corporate Finance

100 Light St., 9th Floor

Baltimore, MD 21202

 

Ladies and Gentlemen:

IMMTECH PHARMACEUTICALS, INC., a Delaware corporation (the “Company”) proposes,
subject to the terms and conditions contained herein and in the Purchase
Agreements in the form of Exhibit A attached hereto (the “Purchase Agreements”)
entered into with the Investors identified therein (each an “Investor” and,
collectively, the “Investors”), to issue and sell its common stock, $0.01 par
value per share, (the “Common Stock”) up to an aggregate of 1,200,000 shares of
Common Stock, (the “Shares”). The Company hereby sets forth its agreement (this
“Agreement”) with Ferris, Baker Watts, Incorporated (“FBW”) acting as the
placement agent (the “Placement Agent”) for this proposed registered direct
offering. The Shares 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 to solicit offers for the purchase of all or part of the Shares
from the Company in connection with the proposed issuance and sale, on a
commercially reasonable efforts basis, by the Company of the Shares to the
Investors (the “Offering”). Upon the occurrence of the Closing (as hereinafter
defined), the Company shall pay to the Placement Agent by wire transfer of
immediately available funds to an account or accounts designated by the
Placement Agent an amount equal to six percent (6.0%) of the gross proceeds
received by the Company from the sale of the Shares on such Closing Date (as
hereinafter defined). 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 Shares for its own account and, in soliciting purchases of Shares,
the Placement Agent shall act solely as the Company’s agent and not as
principal. Notwithstanding the foregoing, it is understood and agreed that the
Placement Agent (or its affiliates) may, solely at its discretion and without
any obligation to do so, purchase Shares as principal. The Placement Agent shall
have no authority to bind the Company.

 

 

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(b)          Payment of the purchase price for, and delivery of, the Shares
shall be made at a closing (the “Closing”) at, Paul, Hastings, Janofsky & Walker
LLP, the offices of counsel for the Company, located at Park Avenue Tower, 75 E.
55th Street, First Floor, New York, NY 10022 at 9:00 a.m., EST, 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 Shares (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)           On the Closing Date, the Placement Agent shall cause each Investor
to wire directly to the Company an amount equal to the aggregate purchase price
for the number of Shares such Investor has agreed to purchase. Once the Company
has received the aggregate purchase price for all of the Shares, it shall
deliver, or cause the transfer agent for the Shares to deliver, to each Investor
the number of Shares set forth on the signature page to such Investor’s Purchase
Agreement, which delivery shall be made, with respect to an Investor, in
accordance with the procedures set forth in such Investor’s executed Purchase
Agreement.

(d)           The purchases of the Shares by each of the Investors shall be
evidenced by the execution of a Purchase Agreement substantially in the form
attached hereto as Exhibit A.

(e)           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 the Placement Agent, solicit or accept offers to purchase
shares of its 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 the Common Stock that are outstanding at the date hereof) otherwise than
through the Placement Agent.

2.             Representations and Warranties of the Company. The Company
represents and warrants to the Placement Agent 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. 333-130970), which was declared by the Commission to be effective under
the Securities Act as of February 7, 2006 (the “Effective Date”) including a
Base Prospectus, dated as of the Effective Date, relating to previously sold
securities and the Shares (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 Shares 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 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

 

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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 into the Prospectus
Supplement (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 the filing of any Incorporated Document under the
Exchange Act after the Effective Date. If the Company has filed an abbreviated
registration statement to register additional Common Stock 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.

(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 the information
herein and the Placement Agent’s Information (as defined in Section 16). 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 Shares, any
offering material in connection with the offering and sale of the Shares, 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 Prospectus Supplement 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 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

 

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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. Deloitte & Touche 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 Purchase
Agreements.

 

(i)             Sufficiency of Disclosure. 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 Purchase Agreements and
to consummate the transactions

 

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contemplated hereby and thereby. This Agreement and each of the Purchase
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 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 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)             No Conflicts. The execution, delivery and performance by the
Company of this Agreement, the agreement to, among other things, issue the
Placement Agent warrants to purchase Common Stock (the “Placement Agent
Warants”) pursuant to that certain letter agreement dated December 14, 2006
between the Company and the Placement Agent, and each of the Purchase Agreements
and the consummation of the transactions herein and therein contemplated,
including the issuance and sale of the Shares, 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.

(m)          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 Placement Agent Warrants, and
each of the Purchase Agreements or for the consummation of the transactions
contemplated hereby and thereby, including the issuance or sale of the Shares by
the Company, except such as have been obtained or made, and such as may be
required under the securities, or blue sky, laws of any jurisdiction in
connection with the offer and sale of the Shares by the Company in the manner
contemplated herein and in the Registration Statement and the Prospectus.

(n)           Capitalization. All of the issued and outstanding shares of
capital stock of the Company 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 under the caption “Capitalization” in
the Prospectus Supplement (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

 

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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.

(o)           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 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 are held thereby under valid, subsisting and enforceable
leases.

(p)           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 mark
registrations, trade names, copyrights, licenses, inventions, trade secrets,
technology, Internet domain names, know-how and other intellectual property,
necessary for the conduct of the Company’s 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 infringes or otherwise violates 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. § 135) has been commenced against any patent or patent
application which constitutes the Intellectual Property described in the
Prospectus; and (g) the Company has 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.

(q)           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.

 

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(r)           Permits. Except as otherwise disclosed in the Registration
Statement and the Prospectus or except as would not result in a Material Adverse
Effect, the Company and each subsidiary possess such valid and current
certificates, licenses, authorizations or permits issued by the appropriate
state, federal or foreign regulatory agencies or bodies necessary to conduct
their respective businesses, and neither the Company nor any subsidiary has
received any notice of proceedings relating to the limitation, revocation or
modification of, or non-compliance with, any such certificate, authorization or
permit which, singly or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, would result in a Material Adverse Effect.

(s)            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.

(t)            Listing. The Common Stock (including the 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 American Stock Exchange, any stock exchange, market or trading facility
on which the 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 American Stock Exchange with
respect to the issuance of the Shares and shall use its best efforts to have the
Shares listed on the American Stock Exchange on or before the Closing Date.

(u)           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.

(v)           Disclosure Controls. The Company has established and maintains
disclosure controls and procedures (as such term is defined in Rule 13a-15(e)
and 15d-15(e) under the Exchange Act), which (i) are designed to ensure that
material information relating to the Company is made known to the Company’s
principal executive officer and its principal financial officer by others within
those entities, particularly during the periods in which the periodic reports
required under the Exchange Act are being prepared; (ii) 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
Supplement, 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 not 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.

 

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(w)         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.

(x)           No Registration Rights. Except as described in the Prospectus, no
person or entity has the right, contractual or otherwise, to require
registration of the 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.

(y)           Sarbanes-Oxley Act. The principal executive officer and principal
financial officer of the Company have made all certifications required by
Sections 302 and 906 of the Sarbanes-Oxley Act of 2002 and the rules and
regulations promulgated in connection therewith (the “Sarbanes-Oxley 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 Sarbanes-Oxley Act (and intends to comply
with all applicable provisions that are not yet effective upon effectiveness).

(z)            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 after
reasonable due inquiry, 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.

(aa)         Compliance with ERISA. Each of the Company and its Subsidiaries has
fulfilled its obligations, if any, under the minimum funding standards of
Section 302 of the United States 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

 

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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,

(bb)         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.

(cc)         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 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.

(dd)         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.

(ee)         Investment Company Act. Neither the Company nor any of its
Subsidiaries is or, after giving effect to the offering and sale of the Shares
and the application of the proceeds thereof as described in the Prospectus, will
be required to register as an “investment company” as defined in the Investment
Company Act of 1940, as amended.

(ff)          No Broker’s Fees. Aside from this Agreement, 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 Shares.

(gg)         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.

 

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(hh)        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.

(ii)            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.

(jj)            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.

(kk)         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.

(ll)            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; all such
filings, declarations, listings, registrations, reports or submissions were in
compliance with applicable laws when filed, except for any non-compliance that
individually or in the aggregate would not reasonably be expected to result in a
Material Adverse Effect, 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.

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.

Representations and Warranties of the Placement Agent.

(a)           The Placement Agent is a member in good standing of the NASD and
has, and at all times while taking any actions constituting an offer or sale of
the Shares had, all governmental licenses (including both federal and state
broker dealer licenses) required to act as placement agent for the Shares.

 

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(b)          The Placement Agent has complied, in all material respects, with
all applicable Federal and state laws and applicable rules of the NASD in
connection with its activities as placement agent for the Shares.

(c)           The Placement Agent has not delivered any materials to the
Investors relating to the Company other than those that are “communications not
deemed a prospectus,” pursuant to Rule 134 or a prospectus meeting the
requirements of Section 10 of the Securities Act.

4.     Delivery and Payment. On the Closing Date, in accordance with the terms
and conditions of each Investor’s respective Purchase Agreement, the Company
shall sell to, and the Investor(s) shall purchase, the number of Shares
reflected on such Investor’s Purchase Agreement against payment by such Investor
of such Investor’s aggregate purchase price therefor reflected in the Investor’s
Purchase Agreement.

 

5.

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; Free Writing Prospectuses. The Company
will not, during such period as the Prospectus would be required by law to be
delivered in connection with sales of the Shares 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. The Company represents and agrees that it has not made and will not, make
any offer relating to the Shares that would constitute a “free writing
prospectus” as defined in Rule 405 under the Securities Act (“Issuer Free
Writing Prospectus”).

(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 Shares, 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 Shares;
(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 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 Shares 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.

 

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(d)          Ongoing Compliance of the Prospectus. If, at any time when a
Prospectus relating to the Shares 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 5(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 Shares is
required to be delivered under the Securities Act, the Prospectus or any
amendment or supplement thereto; (iii) any document incorporated by reference in
the Prospectus Supplement and (iv) all correspondence to and from, and all
documents issued to and by, the Commission in connection with the registration
of the Shares under the Securities Act. 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 Shares 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 (other than
reports, proxy statements and other information that is filed with the
Commission electronically via EDGAR 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
Shares 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
Shares and will pay the fee, if any, of any state, the NASD or the American
Stock Exchange 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 Agreements. The Company will cause each of its executive
officers and directors whose names are set forth on Exhibit C hereto to furnish
to the Placement Agent, prior to the Closing Date, a letter, substantially in
the form of Exhibit B hereto (the “Lock-Up Agreement”).

(j)             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

 

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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.

(k)           Reservation of Stock. The Company shall reserve and keep available
at all times a sufficient number of shares of Common Stock for the purpose of
enabling the Company to issue the Common Stock underlying the Placement Agent
Warrants.

(l)             Listing. The Company shall use its best efforts to cause the
qualification of the Shares for quotation on the American Stock Exchange.

(m)          Issuance of Securities. For purposes of this subsection (p), the
following definitions shall apply:

(i)             “Approved Stock Plan” means any employee benefit plan which has
been approved by the Board of Directors of the Company, pursuant to which the
Company’s securities may be issued to any employee, officer or director for
services provided to the Company.

(ii)            “Common Stock Equivalents” means, collectively, Options and
Convertible Securities.

(iii)           “Convertible Securities” means any stock or securities (other
than Options) convertible into or exercisable or exchangeable for Common Stock.

(iv)          “Excluded Securities” means Common Stock issued or issuable: (i)
in connection with any Approved Stock Plan; (ii) any securities issued to the
seller as consideration for the acquisition of another entity by the Company by
merger or share exchange (whereby the Company owns no less than 51% of the
voting power of the surviving entity) or purchase of substantially all of such
entity’s stock or assets; (iii) any securities issued in connection with a
license, strategic partnership, joint venture or other similar agreement,
provided that the purpose of such arrangement is not primarily the raising of
capital; (iv) upon exercise of warrants issued as a part of the issuance of
straight debt securities (with no equity or equity-linked feature) issued to a
financial institution or lender in connection with a bank loan, credit, lease,
or other debt transaction with such financial institution or lender (where
warrant coverage is not greater than 5%); or (vi) upon conversion of any Options
or Convertible Securities which are outstanding on the day immediately preceding
the Closing Date, provided that the terms of such Options or Convertible
Securities are not amended, modified, or changed on or after the Closing Date.

(v)           “Options” means any rights, warrants or options to subscribe for
or purchase Common Stock or Convertible Securities.

From the date hereof until the date that is 45 days after the Closing Date, the
Company will not, directly or indirectly, sell, grant any option to purchase, or
otherwise dispose of (or announce any offer, sale, grant or any option to
purchase or other disposition of) any of its or its subsidiaries’ equity or
equity equivalent securities, including without limitation any debt, preferred
stock or other instrument or security that is, at any time during its life and
under any circumstances, convertible into or exchangeable or exercisable for
shares of Common Stock or Common Stock Equivalents. The restrictions contained
in this section shall not apply in connection with the issuance of any Excluded
Securities.

 

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6.             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 Shares including any
stock or transfer taxes and stamp or similar duties payable upon the sale,
issuance or delivery of the Shares and the printing, delivery, and shipping of
the certificates representing the Shares, (iii) all filing fees, fees and
disbursements of the Company’s and the Placement Agent’s counsel incurred in
connection with the registration or qualification of the Shares for offering and
sale by the Company under the securities or blue sky laws of such jurisdictions
designated pursuant to Section 5(h), 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 Shares, (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
Offering and reasonable fees and disbursements of counsel for both the Company
and the Placement Agent in connection with such review (including all COBRADesk
fees), (vii) listing fees, if any, for the quotation of the Common Stock on the
American Stock Exchange, (viii) fees and disbursements of the Auditors, 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
Shares 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. Notwithstanding anything contained in the foregoing or
elsewhere in this Agreement, the Company’s obligations to reimburse the
Placement Agent for its reasonable costs and expenses pursuant to clauses (iii),
(vi) and (ix) of this Section 6, including reasonable legal fees and
disbursements, shall not in the aggregate exceed $80,000.

7.             Conditions of Placement Agent’s Obligations. The respective
obligations of the Placement Agent and the closing of the sale of the Shares are
subject to the following conditions:

(a)           No stop order suspending the effectiveness of the Registration
Statement or the qualification or registration of the Shares 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.

(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

 

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Agent, so material and adverse as to make it impracticable or inadvisable to
proceed with the sale or delivery of the Shares on the terms and in the manner
contemplated 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 counsel to the Placement Agent, is material, or
omits to state any fact which, in the opinion of the counsel to 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 counsel to the Placement Agent, is material, or omits to state
any fact which, in the opinion of the counsel to 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 (i) from Paul, Hastings,
Janofsky & Walker LLP, corporate counsel to the Company, such counsel’s written
opinion, addressed to the Placement Agent and dated the Closing Date, in form
and substance as is set forth on Exhibit D attached hereto.

(f)            The Placement Agent shall have received from Mintz, Levin, Cohn,
Ferris, Glovsky and Popeo, P.C., 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.

(g)           The Placement Agent shall have received on the Closing Date a
certificate, addressed to the Placement Agent and dated the Closing Date, of the
chief executive or chief operating officer and the chief financial officer or
chief accounting officer of the Company to the effect that:

(i)             the representations, warranties and agreements of the Company in
this Agreement were true and correct when made and are time 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 Shares 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,

 

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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

(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.

(h)           The Shares shall be registered under the Exchange Act and shall
have been approved for quotation on the American Stock Exchange and the Shares
shall be listed and admitted and authorized for trading on the American Stock
Exchange, subject only to official notice of issuance. Satisfactory evidence of
such actions shall have been provided to the Placement Agent.

(i)             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
Shares; 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 Shares.

(j)             The Prospectus Supplement shall have been filed with the
Commission pursuant to Rule 424(b) under the Securities Act before 5:30 P.M. EST
on the second business day after the date of this Agreement.

(k)           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.

(l)             The Company shall have entered into Purchase Agreements with
each of the Investors.

(m)          Subsequent to the execution and delivery of this Agreement, there
shall not have occurred any of the following: (i) trading in securities
generally on the New York Stock Exchange, the Nasdaq Stock Market, LLC or the
American Stock Exchange or in the over-the-counter market, or trading in any
securities of the Company on any exchange or in the over-the-counter market,
shall have been suspended or minimum or maximum prices or maximum ranges for
prices shall have been established on any such exchange or such market by the
Commission, by such exchange or by any other regulatory body or governmental
authority having jurisdiction, (ii) a banking moratorium shall have been
declared by federal or state authorities or a material disruption has occurred
in commercial banking or securities settlement or clearance services in the
United States, (iii) the United States shall have become engaged in hostilities,
or the subject of an act of terrorism, there shall have been an escalation in
hostilities involving the United States or there shall have been a declaration
of a national emergency or war by the United States or (iv) there shall have
occurred any other calamity or crisis or any change in general economic,
political or financial conditions in the United States or elsewhere, if the
effect of any such event in clause (iii) or (iv) makes it, in the sole judgment
of the Placement Agent, impracticable or inadvisable to proceed with the sale or
delivery of the Shares on the terms and in the manner contemplated by the
Registration Statement and the Prospectus.

(n)           The NASD shall have raised no objection to the fairness and
reasonableness of the placement agency terms and arrangements.

 

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(o)          The Placement Agent shall have received copies of the executed
Lock-Up Agreements executed by each person listed on Exhibit C 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.

 

8.

Indemnification and Contribution.

(a)           Indemnification of the Placement Agent. The Company shall
indemnify and hold harmless the Placement Agent, its directors, officers,
managers, members, employees, and agents and each person, if any, who controls
the Placement Agent within the meaning of the Securities Act (collectively the
“Placement Agent Indemnified Parties” and each a “Placement Agent Indemnified
Party”) against any loss, claim, damage, expense or liability, joint or several,
or any action, investigation or proceeding in respect thereof, to which the
Placement Agent Indemnified Party may become subject, under the Securities Act
or otherwise, insofar as such loss, claim, damage, expense, liability, action,
investigation or proceeding arises out of or is based upon (i) any untrue
statement or alleged untrue statement of a material fact contained in the Base
Prospectus, the Registration Statement, any Preliminary Prospectus, any Issuer
Free Writing Prospectus, any “issuer information” filed or required to be filed
pursuant to Rule 433(d) of the Rules and Regulations or the Prospectus, or in
any amendment or supplement thereto or document incorporated by reference
therein, (ii) the omission or alleged omission to state in the Base Prospectus,
the Registration Statement, any Preliminary Prospectus, any Issuer Free Writing
Prospectus, any “issuer information” filed or required to be filed pursuant to
Rule 433(d) of the Rules and Regulations or the Prospectus, or in any amendment
or supplement thereto or document incorporated by reference therein, a material
fact required to be stated therein or necessary to make the statements therein
not misleading, (iii) any breach of the representations and warranties of the
Company contained herein, or (iv) any act or failure to act, or any alleged act
or failure to act, by the Placement Agent in connection with, or relating in any
manner to, the Shares or the Offering contemplated hereby, and which is included
as part of or referred to in any loss, claim, damage, expense, liability,
action, investigation or proceeding arising out of or based upon matters covered
by clause (i), (ii) or (iii) above; (provided that the Company shall not be
liable in the case of any matter covered by this clause (iv) to the extent that
it is determined in a final judgment by a court of competent jurisdiction that
such loss, claim, damage, expense, liability or action resulted directly from
any such act or failure to act undertaken or omitted to be taken by the
Placement Agent through its gross negligence or willful misconduct) and shall
reimburse each Placement Agent Indemnified Party promptly upon demand for any
legal or other expenses reasonably incurred by that Placement Agent Indemnified
Party in connection with investigating or preparing to defend or defending
against or appearing as a third party witness in respect of, or otherwise
incurred in connection with any such loss, claim, damage, expense, liability,
action, investigation or proceeding as such fees and expenses are incurred;
provided, however, that the Company shall not be liable in any such case to the
extent that any such loss, claim, damage, expense, liability, action,
investigation or proceeding arises out of or is based upon an untrue statement
or alleged untrue statement in or omission or alleged omission from the Base
Prospectus, the Registration Statement, any Preliminary Prospectus, any Issuer
Free Writing Prospectus, any “issuer information” filed or required to be filed
pursuant to Rule 433(d) of the Rules and Regulations or the Prospectus, or in
any amendment or supplement thereto made in reliance upon and in conformity with
written information furnished to the Company by or on behalf of the Placement
Agent through the Placement Agent specifically for use

 

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therein, which information the parties hereto agree is limited to the Placement
Agent’s Information (as defined in Section 16). This indemnity agreement is not
exclusive and will be in addition to any liability, which the Company might
otherwise have and shall not limit any rights or remedies which may otherwise be
available at law or in equity to each Placement Agent Indemnified Party.

(b)           Indemnification of the Company. The Placement Agent shall
indemnify and hold harmless the Company its officers, employees, and agents,
each of its directors and each person, if any, who controls the Company within
the meaning of the Securities Act (collectively the “Company Indemnified
Parties” and each a “Company Indemnified Party”) against any loss, claim,
damage, expense or liability, joint or several, or any action, investigation or
proceeding in respect thereof, to which the Company Indemnified Parties may
become subject, under the Securities Act or otherwise, insofar as such loss,
claim, damage, liability or action arises out of or is based upon (i) any untrue
statement or alleged untrue statement of a material fact contained in the Base
Prospectus, the Registration Statement, any Preliminary Prospectus, any Issuer
Free Writing Prospectus, any “issuer information” filed or required to be filed
pursuant to Rule 433(d) of the Rules and Regulations or the Prospectus, or in
any amendment or supplement thereto, or (ii) the omission or alleged omission to
state in the Base Prospectus, the Registration Statement, any Preliminary
Prospectus, any Issuer Free Writing Prospectus, any “issuer information” filed
or required to be filed pursuant to Rule 433(d) of the Rules and Regulations or
the Prospectus, or in any amendment or supplement thereto, a material fact
required to be stated therein or necessary to make the statements therein not
misleading, but in each case only to the extent that the untrue statement or
alleged untrue statement or omission or alleged omission was made in reliance
upon and in conformity with written information furnished to the Company by or
on behalf of the Placement Agent through the Placement Agent specifically for
use therein, and shall reimburse the Company Indemnified Parties for any legal
or other expenses reasonably incurred by such parties in connection with
investigating or preparing to defend or defending against or appearing as third
party witness in connection with any such loss, claim, damage, expense,
liability or action, investigation or proceeding as such fees and expenses are
incurred; provided that the parties hereto hereby agree that such written
information provided by the Placement Agent consist solely of the Placement
Agent’s Information. This indemnity agreement is not exclusive and will be in
addition to any liability, which the Placement Agent might otherwise have and
shall not limit any rights or remedies which may otherwise be available at law
or in equity to the Company Indemnified Parties. Notwithstanding the provisions
of this Section 8(b) , in no event shall any indemnity by the Placement Agent
under this Section 8(b) exceed the total compensation received by the Placement
Agent in accordance with Section 1(a).

(c)           Notice and Procedures. Promptly after receipt by an indemnified
party under this Section 8 of notice of any claim or the commencement of any
action, the indemnified party shall, if a claim in respect thereof is to be made
against the indemnifying party under this Section 8, notify the indemnifying
party in writing of the claim or the commencement of that action; provided,
however, that the failure to notify the indemnifying party shall not relieve it
from any liability which it may have under this Section 8 except to the extent
it has been materially prejudiced by such failure; and, provided, further, that
the failure to notify the indemnifying party shall not relieve it from any
liability which it may have to an indemnified party otherwise than under this
Section 8. If any such claim or action shall be brought against an indemnified
party, and it shall notify the indemnifying party thereof, the indemnifying
party shall be entitled to participate therein and, to the extent that it
wishes, jointly with any other similarly notified indemnifying party, to assume
the defense thereof with counsel reasonably satisfactory to the indemnified
party. After notice from the indemnifying party to the indemnified party of its
election to assume the defense of such claim or action, the indemnifying party
shall not be liable to the indemnified party under this Section 8 for any legal
or other expenses subsequently incurred by the indemnified party in connection
with the defense thereof other than reasonable costs of investigation; provided,
however, that any indemnified party shall have the right to employ separate
counsel in any such action and to participate in the defense thereof but the
fees and expenses of such counsel shall be at the expense of such indemnified
party unless (i) the employment thereof has been specifically authorized by the
indemnifying party in writing, (ii) such indemnified party shall have been
advised by such counsel that there may be

 

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one or more legal defenses available to it which are different from or
additional to those available to the indemnifying party and in the reasonable
judgment of such counsel it is advisable for such indemnified party to employ
separate counsel or (iii) the indemnifying party has failed to assume the
defense of such action in accordance with the terms hereof and employ counsel
reasonably satisfactory to the indemnified party, in which case, if such
indemnified party notifies the indemnifying party in writing that it elects to
employ separate counsel at the expense of the indemnifying party, the
indemnifying party shall not have the right to assume the defense of such action
on behalf of such indemnified party, it being understood, however, that the
indemnifying party shall not, in connection with any one such action or separate
but substantially similar or related actions in the same jurisdiction arising
out of the same general allegations or circumstances, be liable for the
reasonable fees and expenses of more than one separate firm of attorneys at any
time for all such indemnified parties, which firm shall be designated in writing
by the Placement Agent, if the indemnified parties under this Section 8 consist
of any Placement Agent Indemnified Party, or by the Company if the indemnified
parties under this Section 8 consist of any Company Indemnified Parties. Each
indemnified party, as a condition of the indemnity agreements contained in
Sections 7(a) and 7(b) shall use all reasonable efforts to cooperate with the
indemnifying party in the defense of any such action or claim. Subject to the
provisions of Section 8(d) below, no indemnifying party shall be liable for any
settlement, compromise or consent to the entry of judgment in connection with
any such action effected without its written consent (which consent shall not be
unreasonably withheld), but if settled with its written consent or if there be a
final judgment for the plaintiff in any such action (other than a judgment
entered with the consent of such indemnified party), the indemnifying party
agrees to indemnify and hold harmless any indemnified party from and against any
loss or liability by reason of such settlement or judgment.

(d)           Reimbursement for Fees and Expenses of Counsel. If at any time an
indemnified party shall have requested that an indemnifying party reimburse the
indemnified party for fees and expenses of counsel, such indemnifying party
agrees that it shall be liable for any settlement of the nature contemplated by
this Section 8 effected without its written consent if (i) such settlement is
entered into more than 45 days after receipt by such indemnifying party of the
request for reimbursement, (ii) such indemnifying party shall have received
notice of the terms of such settlement at least 30 days prior to such settlement
being entered into and (iii) such indemnifying party shall not have reimbursed
such indemnified party in accordance with such request prior to the date of such
settlement.

(e)           Contribution; Limitation on Liability. If the indemnification
provided for in this Section 8 is unavailable or insufficient to hold harmless
an indemnified party under Section 8(a) or 8(b), then each indemnifying party
shall, in lieu of indemnifying such indemnified party, contribute to the amount
paid or payable by such indemnified party as a result of such loss, claim,
damage or liability, or action in respect thereof, (i) in such proportion as
shall be appropriate to reflect the relative benefits received by the Company on
the one hand and the Placement Agent on the other from the offering of the
Shares 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 with respect to
the statements or omissions which resulted in such loss, claim, damage or
liability, or action in respect thereof, as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one hand
and the Placement Agent on the other with respect to such offering shall be
deemed to be in the same proportion as the total net proceeds from the offering
of the Shares purchased under this Agreement (before deducting expenses)
received by the Company bears to the total compensation received by the
Placement Agent with respect to the Shares purchased under this Agreement. 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 on the one hand or the Placement Agent on the other, the intent of the
parties and their relative knowledge, access to information and opportunity to
correct or prevent such untrue statement or omission; provided that the parties
hereto agree that the written information furnished to the Company by the
Placement Agent for use in the Prospectus, or in any

 

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amendment or supplement thereto, consists solely of the Placement Agent’s
Information. The Company and the Placement Agent agree that it would not be just
and equitable if contributions pursuant to this Section 8(e) were to be
determined by pro rata allocation or by any other method of allocation which
does not take into account the equitable considerations referred to herein. The
amount paid or payable by an indemnified party as a result of the loss, claim,
damage or liability, or action in respect thereof, referred to above in this
Section 8(e) shall be deemed to include, for purposes of this Section 8(e), any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 8(e), the Placement Agent shall
not be required to contribute any amount in excess of the total compensation
received by the Placement Agent in accordance with Section 1(e) less the amount
of any damages which the Placement Agent has otherwise paid or become liable to
pay by reason of any untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation.

9.             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 8 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 Shares.

10.             Termination.

(a)           The obligations of the Placement Agent hereunder and of the
Investors under the Purchase Agreements may be terminated by the Placement
Agent, in its absolute discretion by notice given to the Company prior to
delivery (including electronic delivery) of and payment for the Shares if, prior
to that time, any of the events described in Sections 7(b) and 7(n) have
occurred.

(b)           If the sale of the Shares provided for herein is not consummated
because any condition to the obligations of the Placement Agent set forth in
Section 7 hereof is not satisfied, because of any termination pursuant to
Section 10(a) hereof or because of any refusal, inability or failure on the part
of the Company to perform any agreement herein or comply with any provision
hereof other than by reason of a default by the Placement Agent, the Company
shall not be under any obligation or liability under this Agreement (except to
the extent provided in Section 6 and 8 hereof) and the Placement Agent shall be
under no obligation or liability to the Company (except to the extent provided
in Section 8 hereof).

11.          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 Ferris, Baker Watts, Incorporated, Attn:
Scott T. Bass, Vice President, Corporate Finance, 100 Light St., 9th Floor,
Baltimore, MD 21202 (facsimile number: 410-659-4632), with a copy to Mintz,
Levin, Cohn, Ferris, Glovsky and Popeo, P.C., 666 Third Avenue, New York, New
York, 10017, Attention: Todd Mason (facsimile number: 212-983-3115);

(b)           if to the Company shall be delivered or sent by mail, telex or
facsimile transmission to IMMTECH PHARMACEUTICALS, INC., One North End Avenue,
New York, New York 10282 (facsimile number: 212-791-2917), with a copy to:
Elizabeth Brower, Paul, Hastings, Janofsky & Walker LLP, 1055 Washington
Boulevard Stamford, CT 06901 (facsimile number: 203-359-3031).

 

24

 

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12.          Persons Entitled to Benefit of Agreement. This Agreement shall
inure to the benefit of and shall be binding upon the Placement Agent, the
Company, and their respective successors and assigns and the controlling
persons, officers and directors referred to in Section 8. 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 Investor merely because such
Investor purchases Shares.

13.          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

14.          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.

15.          General Provisions. This Agreement constitutes the entire agreement
of the parties to this Agreement with respect to the Offering and supersedes all
prior written or oral and all contemporaneous oral agreements, understandings
and negotiations with respect to the Offering, but does not supersede or modify
any previous arrangements unrelated to the Offering. Specifically, the agreement
between the Company and FBW regarding an ongoing engagement dated December 14,
2006, continues to remain in full force and effect. In this Agreement, the
masculine, feminine and neuter genders and the singular and the plural include
one another. The section headings in this Agreement are for the convenience of
the parties only and will not affect the construction or interpretation of this
Agreement. This Agreement may be amended or modified, and the observance of any
term of this Agreement may be waived, only by a writing signed by the Company
and the Placement Agent.

16.          Placement Agent’s Information. The parties hereto acknowledge and
agree that, for all purposes of this Agreement, the Placement Agent’s
Information consists solely of the statements concerning the Placement Agent
contained in the section under the heading “Plan of Distribution” in the
Prospectus Supplement.

17.          Absence of Fiduciary Relationship. The Company acknowledges and
agrees that in connection with the Offering:

 

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(a)         The Placement Agent’s responsibility to the Company is solely
contractual in nature, the Placement Agent has been retained solely to act as
placement agent in connection with the sale of the Shares and no fiduciary,
advisory or agency relationship between the Company and the Placement Agent has
been created in respect of any of the transactions contemplated by this
Agreement, irrespective of whether the Placements Agent has advised or is
advising the Company on other matters;

(b)          The price of the Shares was established by the Company following
discussions and arms-length negotiations with the Investors and the Placement
Agent, and the Company is capable of evaluating and understanding, and
understands and accepts, the terms, risks and conditions of the transactions
contemplated by this Agreement;

(c)          The Company has been advised that the Placement Agent and its
affiliates are engaged in a broad range of transactions which may involve
interests that differ from those of the Company; and

(d)          The Company waives, to the fullest extent permitted by law, any
claims that the Company may have against the Placement Agent with respect to any
breach of fiduciary duty in connection with the sale of the Shares.

 

18.  Partial Unenforceability. The invalidity or unenforceability of any
Section, paragraph or provision of this Agreement shall not affect the validity
or enforceability of any other Section, paragraph or provision hereof. If any
Section, paragraph or provision of this Agreement is for any reason determined
to be invalid or unenforceable, there shall be deemed to be made such minor
changes (and only such minor changes) as are necessary to make it valid and
enforceable.

[Signature Page Follows]

 

26

 

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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,

Immtech Pharmaceuticals, Inc.

 

By:

/s/ Eric L. Sorkin

 

Name:

Eric L. Sorkin

 

Title:

Chairman, President and Chief Executive
Officer

Accepted as of

the date first above written:

Ferris, Baker Watts, Incorporated

By:

/s/ Scott T. Bass

Name: Scott T. Bass

Title: Vice President

 

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Schedules and Exhibits

Schedule I:

Subsidiaries of the Company

Exhibit A:

Form of Purchase Agreement

Exhibit B:

Form of Lock-Up Agreement

Exhibit C:

List of Directors and Executive Officers Executing Lock-Up Agreements

Exhibit D:

Matters to be Covered in the Opinion of Counsel to the Company

 

 

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Schedule I

Subsidiaries of the Company

 

Name of Subsidiary

 

Jurisdiction of Incorporation

Percentage Owned by Immtech

Super Insight Limited

British Virgin Islands

100%

Immtech Therapeutics Limited

Hong Kong

51%

Immtech Life Science Limited

Hong Kong

100%

 

 

 

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Exhibit A

Form of Purchase Agreement

Immtech Pharmaceuticals, Inc.

150 Fairway Drive, Suite 150

Vernon Hills, Illinois 60061

 

Ladies and Gentlemen:

The undersigned entities set forth on Schedule I hereto (each, an “Investor”),
hereby confirm and agree with you as follows:

1.             This Purchase Agreement (the “Agreement”) is made as of February
7, 2007 between Immtech Pharmaceuticals, Inc. a Delaware corporation (the
“Company”), and each Investor.

2.             The Company has authorized the sale and issuance of 1,200,000
shares of common stock, $0.01 par value per share, at a price of $6.75 per share
(the “Shares”), to certain investors (the “Offering”). The Offering has been
registered under the Securities Act of 1933, as amended, pursuant to the
Company’s Registration Statement on Form S-3, Commission File No. 333-130970
(the “Registration Statement”).

3.             The Company and each Investor agree that such Investor will
purchase from the Company and the Company will issue and sell to such Investor
the aggregate number of Shares set forth opposite such Investor’s name on
Schedule I hereto pursuant to the Terms and Conditions for Purchase of Shares
attached hereto as Annex I and incorporated herein by reference as if fully set
forth herein. Each Investor acknowledges that the Offering is not being
underwritten by the sole placement agent, Ferris, Baker Watts, Incorporated,
(the “Placement Agent”) and that there is no minimum offering amount.
Certificates representing the Shares purchased by each Investor will not be
issued to such Investor; instead, such Shares will be credited to such Investor
using customary book-entry procedures.

4.             Each Investor represents that, except as set forth below, (a) it
has had no employment position, office or other material relationship within the
past three years with the Company or persons known to it to be affiliates of the
Company and (b) it is not a, and it has no direct or indirect affiliation or
association with, any NASD member as of the date hereof.

5.             Each Investor hereby confirms receipt of the Prospectus
Supplement, dated February 7, 2007, and the Base Prospectus, dated February 7,
2006 (together, the “Prospectus”), of the Company distributed by email to such
Investor with this Agreement. Each Investor confirms that it had full access to
the Prospectus and was fully able to read, review download and print it. Each
Investor acknowledges that such Investor will be required to bear the cost, if
any, of printing the Prospectus.

Please confirm that the foregoing correctly sets forth the agreement between us
by signing in the space provided below for that purpose.

 

 

--------------------------------------------------------------------------------

 

 

AGREED AND ACCEPTED:

Name of Investor: _____________________________

 

 

 

 

 

Signature:       _______________________________

 

Name:

 

Title:

 

 

 

Name of Investor:_____________________________

 

 

 

 

 

Signature:       _______________________________

 

Name:

 

Title:

 

 

 

Name of Investor:__________________________

 

 

 

 

 

Signature:       _______________________________

 

Name:

 

Title:

 

 

 

Name of Investor:______________________________

 

 

 

 

 

Signature:       _______________________________

 

Name:

 

Title:

 

 

 

Name of Investor:___________________________

 

 

 

Signature:       _____________________________

 

Name:

 

Title:

IMMTECH
PHARMACEUTICALS, INC.

 

a Delaware corporation

 

 

 

By:

 

Name:

 

Title:

 

 

 

 

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SCHEDULE I

SCHEDULE OF INVESTORS

 

Investor

Name in which book-entry should be made

(if different):

Investor Address, Telephone and Contact Person

Aggregate Number of Shares

Aggregate Purchase Price

Tax ID number

Name of Broker

Broker
DTC no.

1.

 

 

 

 

 

 

 

2.

 

 

 

 

 

 

 

3.

 

 

 

 

 

 

 

4.

 

 

 

 

 

 

 

5.

 

 

 

 

 

 

 

 

 

 

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ANNEX I

 

TERMS AND CONDITIONS FOR PURCHASE OF SHARES

1.             Authorization and Sale of Shares. The Company has authorized the
sale of up to 1,200,000 Shares.

 

2.

Agreement to Sell and Purchase the Shares; Subscription Date.

2.1          Upon the terms and subject to the conditions hereinafter set forth,
at the Closing (as defined in Section 3 below), the Company will sell to each
Investor, and each Investor will purchase from the Company, the number of Shares
as is set forth opposite each such Investor’s name on Schedule I hereto at the
aggregate purchase price set forth on Schedule I hereto.

2.2          The Company may enter into agreements similar to this Agreement
with certain other investors (the “Other Investors”) and expects to complete
sales of Shares to them. (The Investor and the Other Investors are hereinafter
sometimes collectively referred to as the “Investors”, and this Agreement and
the purchase agreements executed by the Other Investors are hereinafter
sometimes collectively referred to as the “Agreements”). The Company may accept
or reject any one or more Agreements in its sole discretion.

3.             Delivery of the Shares at Closing. The completion of the purchase
and sale of the Shares (the “Closing”) shall occur on February 13, 2007 (the
“Closing Date”), at the offices of the Company’s counsel. At the Closing, the
Company shall deliver to each Investor using customary book-entry procedures,
the number of Shares set forth opposite such Investor’s name on Schedule I
hereto and each Investor shall deliver a wire transfer of funds in the full
amount of the aggregate purchase price for the Shares being purchased hereunder,
as set forth opposite such Investor’s name on Schedule I hereto, to the Company.

The Company’s obligation to issue and sell the Shares to each Investor shall be
subject to the following conditions, any one or more of which may be waived by
the Company: (a) receipt by the Company of a wire transfer of funds in the full
amount of the purchase price for the Shares being purchased; (b) completion of
the purchases and sales of Shares under the Agreements that may be executed with
the Other Investors; and (c) the accuracy of the representations and warranties
made by the Investors and the fulfillment of those undertakings of the Investors
to be fulfilled prior to the Closing.

The Investor’s obligation to purchase the Shares shall be subject to the
condition that the Placement Agent shall not have (a) terminated the Placement
Agency Agreement dated February 7, 2007, between the Company and the Placement
Agent (the “Placement Agency Agreement”) pursuant to the terms thereof or (b)
determined that the conditions to Closing in the Placement Agency Agreement have
not been satisfied.

4.             Representations, Warranties and Covenants of the Company. The
Company hereby represents and warrants to, and covenants with, the Investor, as
follows:

4.1          The Company has full right, power, authority and capacity to enter
into this Agreement and to consummate the transactions contemplated hereby and
has taken all necessary action to authorize the execution, delivery and
performance of this Agreement.

 

 

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4.2          This Agreement constitutes a valid and binding obligation of the
Company enforceable against the Company in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors’ and contracting
parties’ rights generally and except as enforceability may be subject to general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law).

4.3          If the Company has received signed purchase agreements with respect
to the Shares being sold in the financing contemplated by this Agreement (the
“Financing”), it will publicly announce by press release, Form 8-K, or both, the
existence, size and terms of the Financing (the “Financing Information”) no
later than 9:30 a.m. on February 8, 2007 or, if the Company has not received
signed purchase agreements with respect to the Shares being sold in the
Financing by 9:30 a.m. on February 8, 2007, then the Company shall issue a press
release disclosing the Financing Information as soon as practicable after it has
received signed purchase agreements relating to Shares being sold in the
Financing.

4.4          The Company has not disclosed any material non-public information
to the Investor other than the Financing Information.

5.             Representations, Warranties and Covenants of the Investors. Each
Investor hereby represents and warrants to, and covenants with, the Company, as
follows:

5.1          The Investor represents and warrants that it has received the
Company’s base prospectus dated February 7, 2006 and the prospectus supplement
dated February 7, 2007 relating to the Offering (together, the “Prospectus”).

5.2          The Investor, if outside the United States, will comply with all
applicable laws and regulations in each foreign jurisdiction in which it
purchases, offers, sells or delivers Shares or has in its possession or
distributes any offering material, in all cases at its own expense.

5.3          The Investor further represents and warrants to, and covenants
with, the Company that (i) the Investor has full right, power, authority and
capacity to enter into this Agreement and to consummate the transactions
contemplated hereby and has taken all necessary action to authorize the
execution, delivery and performance of this Agreement, and (ii) this Agreement
constitutes a valid and binding obligation of the Investor enforceable against
the Investor in accordance with its terms, except as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting creditors’ and contracting parties’ rights generally and
except as enforceability may be subject to general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law).

5.4          The Investor understands that nothing in the Prospectus, this
Agreement or any other materials presented to the Investor in connection with
the purchase and sale of the Shares constitutes legal, tax or investment advice.
The Investor has consulted such legal, tax and investment advisors as it, in its
sole discretion, has deemed necessary or appropriate in connection with its
purchase of Shares.

5.5          From and after obtaining the knowledge of the sale of the Shares
contemplated hereby, the Investor has not taken, and prior to the public
announcement of the transaction the Investor shall not take, any action that has
caused or will cause the Investor to have,

 

 

 

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directly or indirectly, sold or agreed to sell any Shares, effected any short
sale, whether or not against the box, established any “put equivalent position”
(as defined in Rule 16a-l(h) under the Securities Exchange Act of 1934, as
amended) with respect to the Shares, granted any other right (including, without
limitation, any put or call option) with respect to the Shares or with respect
to any security that includes, relates to or derived any significant part of its
value from the Shares, whether or not, directly or indirectly, in order to hedge
its position in the Shares.

6.             Survival of Representations, Warranties and Agreements.
Notwithstanding any investigation made by any party to this Agreement, all
covenants, agreements, representations and warranties made by the Company and
the Investor herein shall survive the execution of this Agreement, the delivery
to the Investor of the Shares being purchased and the payment therefor.

7.             Notices. All notices, requests, consents and other communications
hereunder shall be in writing, shall be mailed (A) if within domestic United
States by first-class registered or certified airmail, or nationally recognized
overnight express courier, postage prepaid, or by facsimile, or (B) if delivered
from outside the United States, by International Federal Express or facsimile,
and shall be deemed given (i) if delivered by first-class registered or
certified mail domestic, three business days after so mailed, (ii) if delivered
by a nationally recognized overnight carrier, one business day after so mailed,
(iii) if delivered by International Federal Express, two business days after so
mailed, (iv) if delivered by facsimile, upon electronic confirmation of receipt
and shall be delivered as addressed as follows:

 

(a)

if to the Company, to:

Immtech Pharmaceuticals, Inc.

Attn: Eric Sorkin

One North End Avenue

New York, NY 10282

 

facsimile number: (212) 791-2917

 

With a copy to:

 

Paul, Hastings, Janofsky & Walker LLP

Attn: Elizabeth Brower

1055 Washington Boulevard

Stamford, CT 06901

 

facsimile number: (203) 359-3031

 

(b)           if to the Investor, at its address on the signature page hereto,
or at such other address or addresses as may have been furnished to the Company
in writing.

8.             Changes. This Agreement may not be modified or amended except
pursuant to an instrument in writing signed by the Company and the Investor.

9.             Headings. The headings of the various sections of this Agreement
have been inserted for convenience or reference only and shall not be deemed to
be part of this Agreement.

 

 

 

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10.          Severability. In case any provision contained in this Agreement
should be invalid, illegal or unenforceable in any respect, the validity,
legality and enforceability of the remaining provisions contained herein shall
not in any way be affected or impaired thereby.

11.          Governing Law. This Agreement shall be governed by, and construed
in accordance with, the internal laws of the State of New York, without giving
effect to the principles of conflicts of law.

12.          Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall constitute an original, but all of which, when
taken together, shall constitute but one instrument, and shall become effective
when one or more counterparts have been signed by each party hereto and
delivered to the other parties.

 

 

 

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Exhibit B

Form of Lock-Up Agreement

 

February ___, 2007

 

Ferris, Baker Watts, Incorporated

Attn: Scott T. Bass, Vice President, Corporate Finance

100 Light St., 9th Floor

Baltimore, MD 21202

 

 

Re: Immtech Pharmaceuticals, Inc. (the “Company”)

 

Ladies and Gentlemen:

 

The undersigned is an owner of record or beneficially of certain shares of the
Company’s common stock, par value $0.01 per share (the “Common Stock”), of the
Company or securities convertible into or exchangeable or exercisable for Common
Stock.

 

The undersigned is aware that the Company proposes to carry out a registered
direct offering of its Common Stock (the “Offering”) for which you will act as
placement agent (the “Placement Agent”). The undersigned recognizes that the
Offering will be of benefit to the undersigned and will benefit the Company by,
among other things, raising additional capital for its operations. The
undersigned acknowledges that you are relying on the representations and
agreements of the undersigned contained in this letter in carrying out the
Offering.

 

In consideration of the foregoing, the undersigned hereby agrees that the
undersigned will not (and will cause any spouse or minor child or immediate
family member of the spouse or the undersigned living in the undersigned’s
household not to), without your prior written consent (which consent may be
withheld in the Placement Agent’s sole discretion), directly or indirectly,
sell, offer, contract or grant any option to sell (including without limitation
any short sale), pledge, transfer, or otherwise dispose of any shares of Common
Stock, options or warrants to acquire shares of Common Stock, or securities
exchangeable or exercisable for or convertible into shares of Common Stock
currently or hereafter owned either of record or beneficially (as defined in
Rule 13d-3 under the Securities Exchange Act of 1934, as amended) by the
undersigned (or such spouse or minor child or family member), or publicly
announce an intention to do any of the foregoing, for a period commencing on the
date hereof and continuing through the ninety (90) days following the closing of
the Offering (the “Lock-Up Period”).

 

If (i) the Company issues an earnings release or material news, or a material
event relating to the Company occurs, during the last 17 days of the Lock-Up
Period, or (ii) prior to the expiration of the Lock-Up Period, the Company
announces that it will release earnings results during the 16-day period
beginning on the last day of the Lock-Up Period, the restrictions imposed by
this agreement shall continue to apply until the expiration of the 18-day period
beginning on the issuance of the earnings release or the occurrence of the
material news or material event.

 

 

 

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                 Notwithstanding the foregoing, this Lock-Up Letter Agreement
shall terminate and the undersigned shall be released from its obligations
hereunder if: (i) the Company notifies you in writing that it does not intend to
proceed with the Offering, (ii) the registration statement filed with the
Securities and Exchange Commission with respect to the Offering is withdrawn,
(iii) for any reason the Placement Agency Agreement between the Company and the
Placement Agent (the “Placement Agency Agreement”) shall be terminated prior to
the Closing Date (as defined in the Placement Agency Agreement) or (iv) a final
prospectus relating to the Offering has not been printed by April 15, 2007.

 

The undersigned also agrees and consents to the entry of stop transfer
instructions with the Company’s transfer agent and registrar against the
transfer of shares of Common Stock or securities convertible into or
exchangeable or exercisable for Common Stock held by the undersigned except in
compliance with the foregoing restrictions.

 

This agreement is irrevocable and will be binding on the undersigned and the
respective successors, heirs, personal representatives, and assigns of the
undersigned.

 

______________________________________

Printed Name of Holder

 

By:  ___________________________________

 

 

______________________________________

Printed Name of Person Signing
(indicate capacity of person signing if signing
as custodian, trustee, or on behalf of an
entity)

 

 

 

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Exhibit C

List of Directors and Executive Officers Executing Lock-Up Agreements

Eric L. Sorkin

Cecilia Chan

Harvey R. Colten, MD

Judy Lau

Levi H.K. Lee, MD

Donald F. Sinex

Frederick Wackerle

Gary C. Parks

Carol Ann Olson

 

 

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Exhibit D

Opinion of Counsel to the Company

 

 

 

 

 

 

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