Exhibit 10.2

 

SPEED COMMERCE, INC.

 

13,035,713 shares of Common Stock

 

Series A Warrants to purchase up to 7,776,784 shares of Common Stock

 

Series B Warrants to purchase up to 2,000,000 shares of Common Stock

 

PLACEMENT AGENT AGREEMENT

 

April 16, 2015

 

Roth Capital Partners, LLC
888 San Clemente Drive
Newport Beach, CA 92660

 

Dear Sirs:

 

1.     INTRODUCTION. Speed Commerce, Inc., a Minnesota corporation (the
“Company”), proposes to issue and sell to the purchasers, pursuant to the terms
and conditions of this Placement Agent Agreement (this “Agreement”) and the
Subscription Agreements in the form of Exhibit A attached hereto (the
“Subscription Agreements”) entered into with the purchasers identified therein
(each a “Purchaser” and collectively, the “Purchasers”), up to an aggregate of
(i) 13,035,713 shares (the “Shares”) of common stock, no par value (the “Common
Stock”) of the Company, (ii) Series A Warrants (the “Series A Warrants”) to
purchase an aggegate of up to 7,776,784 shares of Common Stock (the “Series A
Warrant Shares”), and (iii) Series B Warrants (the “Series B Warrants”) to
purchase an aggegate of up to 2,000,000 shares of Common Stock (the “Series B
Warrant Shares”). The forms of the Series A Warrant and Series B Warrant are
attached hereto as Exhibit B-1 and Exhibit B-2, respectively.   The Series A
Warrants and the Series B Warrants are collectively referred to herein as the
“Warrants,” the Series A Warrant Shares and the Series B Warrant Shares are
collectively referred to herein as the “Warrant Shares,” and the Shares, the
Warrants and the Warrant Shares are collectively referred to herein as the
“Securities.” The Company hereby confirms its agreement with Roth Capital
Partners, LLC (the “Placement Agent”) to act as Placement Agent in accordance
with the terms and conditions hereof.

 

2.     AGREEMENT TO ACT AS PLACEMENT AGENT; PLACEMENT OF SECURITIES. On the
basis of the representations, warranties and agreements of the Company herein
contained, and subject to all the terms and conditions of this Agreement:

 

(a)     The Company hereby authorizes the Placement Agent to act as its
exclusive agent to solicit offers for the purchase of all or part of the Shares
and the Warrants from the Company in connection with the proposed offering of
the Shares and the Warrants (the “Offering”). Until the Closing Date (as defined
in Section 4 hereof) or earlier upon termination of this Agreement pursuant to
Section 9 the Company shall not, without the prior written consent of the
Placement Agent, solicit or accept offers to purchase the Shares and the
Warrants otherwise than through the Placement Agent.

 

 
 

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

 

 

(b)     The Company hereby acknowledges that the Placement Agent has agreed, as
agent of the Company, to use its commercially reasonable “best efforts” to
solicit offers to purchase the Shares and the Warrants from the Company on the
terms and subject to the conditions set forth in the Prospectus (as defined
below). The Placement Agent shall use commercially reasonable efforts to assist
the Company in obtaining performance by each Purchaser whose offer to purchase
Shares and Warrants has been solicited by the Placement Agent and accepted by
the Company, but the Placement Agent shall not, except as otherwise provided in
this Agreement, be obligated to disclose the identity of any potential purchaser
or have any liability to the Company in the event any such purchase is not
consummated for any reason. Under no circumstances will the Placement Agent be
obligated to underwrite or purchase any Shares or Warrants for its own account
and, in soliciting purchases of the Shares and the Warrants, the Placement Agent
shall act solely as the Company’s agent and not as principal.

 

(c)     Subject to the provisions of this Section 2, offers for the purchase of
the Shares and the Warrants may be solicited by the Placement Agent as agent for
the Company at such times and in such amounts as the Placement Agent deems
advisable. The Placement Agent shall communicate to the Company, orally or in
writing, each reasonable offer to purchase Shares and Warrants received by it as
agent of the Company. The Company shall have the sole right to accept offers to
purchase Shares and Warrants and may reject any such offer, in whole or in part.
The Placement Agent shall have the right, in its discretion reasonably
exercised, without notice to the Company, to reject any offer to purchase Shares
and Warrants received by it, in whole or in part, and any such rejection
shall not be deemed a breach of this Agreement.

 

(d)     The Shares and Warrants are being sold to the Purchasers at a combined
public offering price of $0.56 per Share and related Warrants (the “Public
Offering Price”). The purchases of Shares and Warrants by the Purchasers shall
be evidenced by the execution of Subscription Agreements by each of the
Purchasers and the Company.

 

(e)     As compensation for services rendered, on the Closing Date (as defined
in Section 4 hereof), the Company shall pay to the Placement Agent by wire
transfer of immediately available funds to an account or accounts designated by
the Placement Agent, an aggregate amount equal to six and one-half percent
(6.5%) of the gross proceeds received by the Company (the “Placement Fee”) from
the sale of the Shares and the Warrants on such Closing Date. The Placement
Agent may retain other brokers or dealers to act as sub-agents on its behalf in
connection with the Offering, the fees of which shall be paid out of the
Placement Fee.

 

(f)     No Shares and Warrants which the Company has agreed to sell pursuant to
this Agreement and the Subscription Agreements shall be deemed to have been
purchased and paid for, or sold by the Company, until such Shares and Warrants
shall have been delivered to the Purchaser thereof against payment by such
Purchaser. If the Company shall default in its obligations to deliver Shares and
Warrants to a Purchaser whose offer it has accepted, the Company shall indemnify
and hold the Placement Agent harmless against any loss, claim, damage or expense
arising from or as a result of such default by the Company in accordance with
the procedures set forth in Section 8(c) herein.

 

 
-2-

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

 

 

3.     REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company represents and
warrants to, and agrees with, the Placement Agent and the Purchasers that:

 

(a)     The Company has prepared and filed in conformity with the requirements
of the Securities Act of 1933, as amended (the “Securities Act”), and published
rules and regulations thereunder (the “Rules and Regulations”) adopted by the
Securities and Exchange Commission (the “Commission”), a “shelf”
Registration Statement (as hereinafter defined) on Form S-3 (File No.
333-201266), which became effective on February 6, 2015 (the “Effective Date”),
including a base prospectus relating to the securities registered pursuant to
such Registration Statement (the “Base Prospectus”), and such amendments and
supplements thereto as may have been required to the date of this Agreement. The
term “Registration Statement” as used in this Agreement means such 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 Rules and Regulations), as amended and/or supplemented to
the date of this Agreement, including the Base Prospectus. The Registration
Statement is effective under the Securities Act and no stop order preventing or
suspending the effectiveness of the Registration Statement or suspending or
preventing the use of the Prospectus has been issued by the Commission and no
proceedings for that purpose have been instituted or, to the knowledge of the
Company, are threatened by the Commission. The Company, if required by the Rules
and Regulations of the Commission, will file the Prospectus (as defined below),
with the Commission pursuant to Rule 424(b) under the Rules and Regulations. The
term “Prospectus,” as used in this Agreement means the Prospectus, in the form
in which it is to be filed with the Commission pursuant to Rule 424(b) under the
Rules and Regulations, or, if the Prospectus is not to be filed with the
Commission pursuant to Rule 424(b), the Prospectus in the form included as part
of the Registration Statement as of the Effective Date, except that if any
revised prospectus or prospectus supplement shall be provided to the Placement
Agent by the Company for use in connection with the offering and sale of the
Shares and the Warrants which differs from the Prospectus (whether or not such
revised prospectus or prospectus supplement is required to be filed by the
Company pursuant to Rule 424(b) under the Rules and Regulations), the term
“Prospectus” shall refer to such revised prospectus or prospectus supplement, as
the case may be, from and after the time it is first provided to the Placement
Agent for such use. Any preliminary prospectus or prospectus subject to
completion included in the Registration Statement or filed with the Commission
pursuant to Rule 424 under the Rules and Regulations is hereafter called a
“Preliminary Prospectus.” Any reference herein to the Registration Statement,
any Preliminary Prospectus or the Prospectus shall be deemed to refer to and
include the documents incorporated by reference therein pursuant to Item 12 of
Form S-3 which were filed under the Securities Exchange Act of 1934, as amended
(the “Exchange Act”), on or before the last to occur of the Effective Date, the
date of the Preliminary Prospectus, or the date of the Prospectus, and any
reference herein to the terms “amend,” “amendment,” or “supplement” with respect
to the Registration Statement, any Preliminary Prospectus or the Prospectus
shall be deemed to refer to and include (i) the filing of any document under the
Exchange Act after the Effective Date, the date of such Preliminary Prospectus
or the date of the Prospectus, as the case may be, which is incorporated by
reference and (ii) any such document so filed. If the Company has filed an
abbreviated registration statement to register additional securities pursuant to
Rule 462(b) under the Rules and Regulations (the “462(b) Registration
Statement”), then any reference herein to the Registration Statement shall also
be deemed to include such 462(b) Registration Statement.

 

 
-3-

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

 

 

(b)     As of the Applicable Time (as defined below) and as of the Closing Date,
neither (i) any General Use Free Writing Prospectus (as defined below) issued at
or prior to the Applicable Time, and the Pricing Prospectus (as defined below)
and the information included on Schedule A hereto, all considered together
(collectively, the “General Disclosure Package”), (ii) any individual Limited
Use Free Writing Prospectus (as defined below), nor (iii) the bona fide
electronic road show (as defined in Rule 433(h)(5) under the Rules and
Regulations), if any, that has been made available without restriction to any
person, when considered together with the General Disclosure Package, included
or will include, any untrue statement of a material fact or omitted or as of the
Closing Date will omit, to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; provided, however, that the Company makes no
representations or warranties as to information contained in or omitted from any
Issuer Free Writing Prospectus, in reliance upon, and in conformity with,
written information furnished to the Company by or on behalf of the Placement
Agent specifically for inclusion therein, which information the parties hereto
agree is limited to the Placement Agent’s Information (as defined in
Section 17). As used in this paragraph (b) and elsewhere in this Agreement:

 

“Applicable Time” means 8:00 A.M., New York time, on the date of this Agreement.

 

“General Use Free Writing Prospectus” means any Issuer Free Writing Prospectus
that is identified on Schedule A to this Agreement.

 

“Issuer Free Writing Prospectus” means any “issuer free writing prospectus,” as
defined in Rule 433 under the Rules and Regulations relating to the Securities
in the form filed or required to be filed with the Commission or, if not
required to be filed, in the form retained in the Company’s records pursuant to
Rule 433(g) under the Rules and Regulations.

 

“Limited Use Free Writing Prospectuses” means any Issuer Free Writing Prospectus
that is not a General Use Free Writing Prospectus.

 

“Pricing Prospectus” means the Preliminary Prospectus, if any, and the Base
Prospectus, each as amended and supplemented immediately prior to the Applicable
Time, including any document incorporated by reference therein and any
prospectus supplement deemed to be a part thereof.

 

(c)     No order preventing or suspending the use of the Base Prospectus, any
Preliminary Prospectus, any Issuer Free Writing Prospectus or the Prospectus
relating to the Offering has been issued by the Commission, and no proceeding
for that purpose or pursuant to Section 8A of the Securities Act has been
instituted or threatened by the Commission, and each Preliminary Prospectus (if
any), at the time of filing thereof, conformed in all material respects to the
requirements of the Securities Act and the Rules and Regulations, and did not
contain an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading;
provided, however, that the Company makes no representations or warranties as to
information contained in or omitted from any Preliminary Prospectus, in reliance
upon, and in conformity with, written information furnished to the Company by or
on behalf of the Placement Agent specifically for inclusion therein, which
information the parties hereto agree is limited to the Placement Agent’s
Information (as defined in Section 17).

 

 
-4-

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

 

 

(d)     At the time the Registration Statement became or becomes effective, at
the date of this Agreement and at the Closing Date, the Registration Statement
conformed and will conform in all material respects to the requirements of the
Securities Act and the Rules and Regulations and did not and will not contain
any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein not
misleading; the Prospectus, at the time the Prospectus was issued and at
the Closing Date, conformed and will conform in all material respects to the
requirements of the Securities Act and the Rules and Regulations and did not and
will not contain an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading; provided, however,
that the foregoing representations and warranties in this paragraph (d) shall
not apply to information contained in or omitted from the Registration Statement
or the Prospectus in reliance upon, and in conformity with, written information
furnished to the Company by or on behalf of the Placement Agent specifically for
inclusion therein, which information the parties hereto agree is limited to the
Placement Agent’s Information (as defined in Section 17).

 

(e)     Each Issuer Free Writing Prospectus, if any, as of its issue date and at
all subsequent times through the completion of the public offer and sale of the
Shares and the Warrants or until any earlier date that the Company notified or
notifies the Placement Agent as described in Section 5(e), did not, does not and
will not include any information that conflicted, conflicts or will conflict
with the information contained in the Registration Statement, Pricing Prospectus
or the Prospectus, including any document incorporated by reference therein
and any prospectus supplement deemed to be a part thereof that has not been
superseded or modified, or includes an untrue statement of a material fact or
omitted or would omit to state a material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the
circumstances prevailing at the subsequent time, not misleading. The foregoing
sentence does not apply to statements in or omissions from any Issuer Free
Writing Prospectus in reliance upon, and in conformity with, written information
furnished to the Company by or on behalf of the Placement Agent specifically for
inclusion therein, which information the parties hereto agree is limited to the
Placement Agent’s Information (as defined in Section 17).

 

(f)     The documents incorporated by reference in the Prospectus, when they
became effective or were filed with the Commission, as the case may be,
conformed in all material respects to the requirements of the Securities Act or
the Exchange Act, as applicable, and the rules and regulations of the Commission
thereunder and none of such documents, at the time they became effective or were
filed with the Commission, contained any untrue statement of a material fact or
omitted to state any material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading; and any further documents so filed and incorporated by
reference in the Prospectus, when such documents become effective or are filed
with the Commission, as the case may be, will conform in all material respects
to the requirements of the Securities Act or the Exchange Act, as applicable,
and the rules and regulations of the Commission thereunder and will not contain
any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading.

 

 
-5-

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

 

 

(g)     The Company has not, directly or indirectly, distributed and will not
distribute any offering material in connection with the Offering other than any
Pricing Prospectus, the Prospectus and other materials, if any, permitted under
the Securities Act and consistent with Section 5(b) below. The Company is not an
“ineligible issuer” in connection with the offering pursuant to Rules 164, 405
and 433 under the Securities Act. The Company will file with the Commission all
Issuer Free Writing Prospectuses (other than a “road show,” as defined in Rule
433(d)(8) under the Rules and Regulations), if any, in the time and manner
required under Rules 163(b)(2) and 433(d) under the Rules and Regulations.

 

(h)     The Company and each Subsidiary (as defined below) has been duly
organized and is validly existing as a corporation in good standing (or the
foreign equivalent thereof) under the laws of each of their respective
jurisdictions of organization. The Company and each Subsidiary is duly qualified
to do business and is in good standing as a foreign corporation in each
jurisdiction in which its ownership or lease of property or the conduct of its
business requires such qualification and has all power and authority necessary
to own or hold its properties and to conduct the business in which it is
engaged, except where the failure to so qualify, be in good standing or have
such power or authority (i) would not have, singularly or in the aggregate, a
material adverse effect on the condition (financial or otherwise), results of
operations, assets, properties or business or prospects of the Company or any
Subsidiary, taken as a whole, or (ii) impair in any material respect the ability
of the Company to perform its obligations under this Agreement or to consummate
any transactions contemplated by the Agreement, the Registration Statement, the
General Disclosure Package or the Prospectus (any such effect as described in
clauses (i) or (ii), a “Material Adverse Effect”). The Company owns or controls,
directly or indirectly, only the following corporations, partnerships, limited
liability partnerships, limited liability companies, associations or other
entities: not applicable (each, a “Subsidiary” and, collectively, the
“Subsidiaries”).

 

(i)     The Company has the full right, power and authority to enter into this
Agreement, the Warrants and each of the Subscription Agreements, to authorize,
issue and sell the Securities as contemplated by this Agreement to perform and
to discharge its obligations hereunder and thereunder, to issue the Series A
Warrant Shares upon the due exercise of the Series A Warrants and, subject to
effecting the Capital Event, to issue the Series B Warrant Shares upon the due
exercise of the Series B Warrants; and each of this Agreement, the Warrants and
each of the Subscription Agreements have been duly authorized, executed and
delivered by the Company, and constitutes a valid and binding obligation of the
Company enforceable in accordance with its terms, except as may be limited by
bankruptcy, insolvency, reorganization or other similar laws relating to
enforcement of creditors’ rights generally and by general principles of equity.

 

 
-6-

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

 

 

(j)     The Shares and Warrants to be issued and sold by the Company to the
Purchasers hereunder and under the Subscription Agreements have been duly
authorized and the Shares, when issued and delivered against payment therefor as
provided herein and in the Subscription Agreements and the Series A Warrant
Shares and, subject to effecting the Capital Event, the Series B Warrant Shares,
when issued and delivered against payment therefore as provided in the Warrants,
will be validly issued, fully paid and non-assessable and free of any preemptive
or similar rights and will conform to the description thereof contained in the
General Disclosure Package and the Prospectus.

 

(k)     The Company has an authorized capitalization as set forth in the
Registration Statement, the General Disclosure Package and the Prospectus, and
all of the issued shares of capital stock of the Company have been duly
authorized and validly issued, are fully paid and non-assessable, have been
issued in all material respects in compliance with United States federal and
state securities laws, and conform to the description thereof contained in the
Registration Statement, the General Disclosure Package and the Prospectus. As of
March 31, 2015, there were 66,013,130 shares of Common Stock issued and
outstanding, 344,011.10 shares of Series D Convertible Preferred Stock, no par
value, of the Company, issued and outstanding and 7,246,697 shares of Common
Stock were issuable upon the exercise of all options, warrants and convertible
securities outstanding as of such date. Since such date, the Company has not
issued any securities, other than Common Stock of the Company issued pursuant to
the exercise of stock options previously outstanding under the Company’s
stock option plans or the issuance of restricted Common Stock or restricted
stock units pursuant to employee stock option or purchase plans. All of the
Company’s options, warrants and other rights to purchase or exchange any
securities for shares of the Company’s capital stock have been duly authorized
and validly issued and were issued in all material respects in compliance with
United States federal and state securities laws. None of the outstanding shares
of Common Stock was issued in violation of any preemptive rights, rights of
first refusal or other similar rights to subscribe for or purchase securities of
the Company. There are no authorized or outstanding shares of capital stock,
options, warrants, preemptive rights, rights of first refusal or other rights to
purchase, or equity or debt securities convertible into or exchangeable or
exercisable for, any capital stock of the Company or any Subsidiary other than
those described above or accurately described in the Registration Statement, the
General Disclosure Package and the Prospectus. The description of the Company’s
stock option, stock bonus and other stock plans or arrangements, and the options
or other rights granted thereunder, as described in the Registration Statement,
the General Disclosure Package and the Prospectus, accurately and fairly present
in all material respects the information required to be shown with respect to
such plans, arrangements, options and rights.

 

(l)     All the outstanding shares of capital stock of each Subsidiary have been
duly authorized and validly issued, are fully paid and non-assessable and,
except to the extent set forth in the Registration Statement, the General
Disclosure Package and the Prospectus, are owned by the Company directly or
indirectly through one or more wholly-owned Subsidiaries, free and clear of any
claim, lien, encumbrance, security interest, restriction upon voting or transfer
or any other claim of any third party.

 

 
-7-

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

 

 

(m)     The execution, delivery and performance of this Agreement, the
Subscription Agreements and the Warrants by the Company, the issue and sale of
the Securities by the Company and the consummation of the transactions
contemplated hereby and thereby will not (with or without notice or lapse
of time or both): (i) conflict with or result in a breach or violation of any of
the terms or provisions of, constitute a default or Debt Repayment Triggering
Event (as defined below) under, give rise to any right of termination or other
right or the cancellation or acceleration of any right or obligation or loss of
a benefit under, or give rise to the creation or imposition of any lien,
encumbrance, security interest, claim or charge upon any property or assets of
the Company or any Subsidiary pursuant to, any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument to which the Company or
any Subsidiary is a party or by which the Company or any Subsidiary is bound or
to which any of the property or assets of the Company or any Subsidiary is
subject (each, a “Contract” and, collectively, the “Contracts”); (ii) subject to
effecting the Capital Event, result in any violation of the provisions of the
charter or by-laws (or analogous governing instruments, as applicable) of the
Company or any Subsidiary; or, (iii) to the Company’s knowledge, result in the
violation of any law, statute, rule, regulation, judgment, order or decree of
any court or governmental agency or body, domestic or foreign, having
jurisdiction over the Company or any Subsidiary or any of their properties or
assets, except with respect to clauses (i) and (iii), any breaches, violations
or defaults which, singularly or in the aggregate, would not have a Material
Adverse Effect. A “Debt Repayment Triggering Event” means any event or condition
that gives, or with the giving of notice or lapse of time would give the holder
of any note, debenture or other evidence of indebtedness (or any person acting
on such holder’s behalf) the right to require the repurchase, redemption or
repayment of all or a portion of such indebtedness by the Company or any
Subsidiary.

 

(n)     Except for (i) shareholder approval of the Capital Event, (ii) the
registration of the Securities offered in the Offering under the Securities Act
(which, except for the registration of the Series B Warrant Shares, has been
effected), and (iii) such consents, approvals, authorizations, registrations or
qualifications as may be required under the Exchange Act and applicable state or
foreign securities laws and the Financial Industry Regulatory Authority, Inc.
(“FINRA”) in connection with the offering and sale of the Securities
by the Company, no consent, approval, authorization or order of, or filing,
qualification or registration with, any court or governmental agency or body,
foreign or domestic, which has not been made, obtained or taken and is not in
full force and effect, is required for the execution, delivery and performance
of this Agreement, the Subscription Agreements and the Warrants by the Company,
the offer or sale of the Securities or the consummation of the transactions
contemplated hereby or thereby.

 

(o)     Grant Thornton LLP, who have certified certain financial statements and
related schedules included or incorporated by reference in the Registration
Statement, the General Disclosure Package and the Prospectus, is an independent
registered public accounting firm as required by the Securities Act and the
Rules and Regulations and the Public Company Accounting Oversight Board (United
States) (the “PCAOB”). Except as pre-approved in accordance with the
requirements set forth in Section 10A of the Exchange Act, Grant Thornton LLP
has not been engaged by the Company to perform any “prohibited activities” (as
defined in Section 10A of the Exchange Act).

 

 
-8-

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

 

 

(p)     The financial statements, together with the related notes and schedules,
included or incorporated by reference in the Registration Statement, the General
Disclosure Package and the Prospectus fairly present in all material respects
the financial position and the results of operations and changes in financial
position of the Company and its Subsidiaries and other consolidated entities at
the respective dates or for the respective periods therein specified. Such
statements and related notes and schedules have been prepared in accordance with
the generally accepted accounting principles in the United States (“GAAP”)
applied on a consistent basis throughout the periods involved except as may be
set forth in the related notes included or incorporated by reference in the
General Disclosure Package. The financial statements, together with the related
notes and schedules, included or incorporated by reference in the Registration
Statement, the General Disclosure Package and the Prospectus comply in all
material respects with the Securities Act, the Exchange Act, and the Rules and
Regulations and the rules and regulations under the Exchange Act. No other
financial statements or supporting schedules or exhibits are required by the
Securities Act or the Rules and Regulations to be described, or included or
incorporated by reference in the Registration Statement, the General Disclosure
Package or the Prospectus. There is no pro forma or as adjusted financial
information which is required to be included in the Registration Statement, the
General Disclosure Package, or the Prospectus or a document incorporated by
reference therein in accordance with the Securities Act and the Rules and
Regulations which has not been included or incorporated as so required. The pro
forma and pro forma as adjusted financial information and the related notes
included or incorporated by reference in the Registration Statement, the General
Disclosure Package and the Prospectus, if any, have been properly compiled and
prepared in accordance with the applicable requirements of the Securities Act
and the Rules and Regulations and present fairly the information shown therein,
and the assumptions used in the preparation thereof are reasonable and the
adjustments used therein are appropriate to give effect to the transactions and
circumstances referred to therein.

 

(q)     Neither the Company nor any Subsidiary has sustained, since the date of
the latest audited financial statements included or incorporated by reference in
the Registration Statement, the General Disclosure Package and the Prospectus,
any material loss or interference with its business from fire, explosion, flood
or other calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree, otherwise than as set
forth or contemplated in the Registration Statement, the General Disclosure
Package and the Prospectus; and, since such date, there has not been any
change in the capital stock (other than cancellation of stock options or grants
or exercises of stock options or issuance of restricted Common Stock or
restricted stock units pursuant to employee stock option or purchase plans) or
long-term debt of the Company or any Subsidiary or any material adverse changes,
or any development involving a prospective material adverse change, in or
affecting the business, assets, management, financial position, prospects,
shareholders’ equity or results of operations of the Company or any Subsidiary,
otherwise than as set forth or contemplated in the Registration Statement, the
General Disclosure Package and the Prospectus.

 

 
-9-

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

 

 

(r)     Except as set forth in the Registration Statement, the General
Disclosure Package and the Prospectus, there is no legal or governmental action,
suit, claim or proceeding pending to which the Company or any Subsidiary is a
party or of which any property or assets of the Company or any Subsidiary is the
subject which is required to be described in the Registration Statement, the
General Disclosure Package or the Prospectus or a document incorporated by
reference therein and is not described therein, or which, singularly or in the
aggregate, if determined adversely to the Company or any Subsidiary could have a
Material Adverse Effect or prevent the consummation of the transactions
contemplated hereby; and to the best of the Company’s knowledge, no such
proceedings are threatened or contemplated by governmental authorities or
threated by others.

 

(s)     Neither the Company nor any Subsidiary is in (i) violation of its
charter or by-laws (or analogous governing instrument, as applicable), (ii)
default in any respect, and no event has occurred which, with notice or lapse of
time or both, would constitute such a default, in the due performance or
observance of any term, covenant or condition contained in any indenture,
mortgage, deed of trust, loan agreement, lease or other agreement or instrument
to which it is a party or by which it is bound or to which any of its property
or assets is subject or (iii) to the Company’s knowledge, violation of any law,
ordinance, governmental rule, regulation or court order, decree or judgment to
which it or its property or assets is subject except, in the case of clauses
(ii) and (iii) of this paragraph(s), for any violations or defaults which,
singularly or in the aggregate, would not have a Material Adverse Effect.

 

(t)     The Company and each Subsidiary possesses all licenses, certificates,
authorizations and permits issued by, and have made all declarations and filings
with, the appropriate local, state, federal or foreign regulatory agencies or
bodies which are necessary or desirable for the ownership of its properties or
the conduct of their respective businesses as described in the Registration
Statement, the General Disclosure Package and the Prospectus (collectively, the
“Governmental Permits”) except where any failures to possess or make the same,
singularly or in the aggregate, would not have a Material Adverse Effect. The
Company and each Subsidiary is in compliance with all such Governmental Permits,
and all such Governmental Permits are valid and in full force and effect, except
where any non-compliance or the validity or failure to be in full force and
effect would not, singularly or in the aggregate, have a Material Adverse
Effect. To the Company’s knowledge, all such Governmental Permits are free and
clear of any restriction or condition that are in addition to, or materially
different from those normally applicable to similar licenses, certificates,
authorizations and permits. Neither the Company nor any Subsidiary has received
notification of any revocation or modification (or proceedings related thereto)
of any such Governmental Permit and, to the Company’s knowledge, there is no
reason to believe that any such Governmental Permit will not be renewed.

 

(u)     Neither the Company nor any Subsidiary is or, after giving effect to the
offering of the Securities and the application of the proceeds thereof as
described in the Registration Statement, the General Disclosure Package and the
Prospectus, will become an “investment company” within the meaning of the
Investment Company Act of 1940, as amended, and the rules and regulations of the
Commission thereunder.

 

(v)     Neither the Company nor any Subsidiary, nor to the Company’s knowledge,
any of the Company’s and any Subsidiary’s officers, directors or affiliates has
taken or will take, directly or indirectly, any action designed or intended to
stabilize or manipulate the price of any security of the Company, or
which caused or resulted in, or which might in the future reasonably be expected
to cause or result in, stabilization or manipulation of the price of any
security of the Company.

 

 
-10-

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

 

 

(w)     To the best of the Company’s knowledge, the Company and each Subsidiary
owns or possesses the right to use all patents, trademarks, trademark
registrations, service marks, service mark registrations, trade names,
copyrights, licenses, inventions, software, databases, know-how, Internet domain
names, trade secrets and other unpatented and/or unpatentable proprietary or
confidential information, systems or procedures, and other intellectual property
(collectively, “Intellectual Property”) necessary to carry on their respective
businesses as currently conducted, and as proposed to be conducted and described
in the Registration Statement, the General Disclosure Package and the
Prospectus, and the Company is not aware of any claim to the contrary or any
challenge by any other person to the rights of the Company or any Subsidiary
with respect to the foregoing except for those that could not have a Material
Adverse Effect. The Intellectual Property licenses described in the Registration
Statement, the General Disclosure Package and the Prospectus are valid, binding
upon, and enforceable against the Company and, to the Company’s knowledge, by
or against the other parties thereto in accordance with their terms. The Company
and each Subsidiary has complied in all material respects with, and is not in
breach nor has received any asserted or threatened claim of breach of, any
Intellectual Property license, and the Company has no knowledge of any material
breach or anticipated breach by any other person to any Intellectual Property
license. To the best of the Company’s knowledge, the Company’s and each
Subsidiary’s business as now conducted and as proposed to be conducted does not
and will not infringe or conflict with any valid patents, trademarks, service
marks, trade names, copyrights, trade secrets, licenses or other Intellectual
Property or franchise right of any person, except for any such acts that would
not have a Material Adverse Effect. No material claim has been made against the
Company or any Subsidiary alleging the infringement by the Company or any
Subsidiary of any patent, trademark, service mark, trade name, copyright, trade
secret, license in or other intellectual property right or franchise right of
any person. The Company and each Subsidiary has taken all reasonable steps to
protect, maintain and safeguard its rights in all Intellectual Property,
including the execution of appropriate nondisclosure and confidentiality
agreements. The consummation of the transactions contemplated by this Agreement
will not result in the loss or impairment of or payment of any additional
amounts with respect to, nor require the consent of any other person in respect
of, each of the Company’s and each Subsidiary’s right to own, use, or hold for
use any of the Intellectual Property as owned, used or held for use in the
conduct of its business as currently conducted. The Company and each Subsidiary
has at all times complied in all material respects with all applicable laws
relating to privacy, data protection, and the collection and use of personal
information collected, used, or held for use by the Company or any Subsidiary in
the conduct of the Company’s or any Subsidiary’s business. No material claims
have been asserted or threatened against the Company or any Subsidiary alleging
a violation of any person’s privacy or personal information or data rights and
the consummation of the transactions contemplated hereby will not breach or
otherwise cause any violation of any law related to privacy, data protection, or
the collection and use of personal information collected, used, or held for use
by the Company or any Subsidiary in the conduct of the Company’s or any
Subsidiary’s business. The Company and each Subsidiary takes reasonable measures
to ensure that such information is protected against unauthorized access, use,
modification, or other misuse.

 

 
-11-

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

 

 

(x)     The Company and each Subsidiary has good and marketable title in fee
simple to, or have valid rights to lease or otherwise use, all items of real or
personal property which are material to the business of the Company and any
Subsidiary, free and clear of all liens, encumbrances, security interests,
claims and defects that do not, singularly or in the aggregate, materially
affect the value of such property and do not interfere with the use made and
proposed to be made of such property by the Company or any Subsidiary; and all
of the leases and subleases material to the business of the Company or any
Subsidiary, and under which the Company or any Subsidiary holds properties
described in the Registration Statement, the General Disclosure Package and the
Prospectus, are in full force and effect, and neither the Company nor any
Subsidiary has received any notice of any material claim of any sort that has
been asserted by anyone adverse to the rights of the Company or any Subsidiary
under any of the leases or subleases mentioned above, or affecting or
questioning the rights of the Company or any Subsidiary to the continued
possession of the leased or subleased premises under any such lease or sublease.

 

(y)     No organized labor disturbance by the employees of the Company or any
Subsidiary exists or, to the best of the Company’s knowledge, is imminent, and
the Company has no actual knowledge of any existing or imminent labor
disturbance by the employees of any of its or any Subsidiary’s principal
suppliers, manufacturers, customers or contractors, that could reasonably be
expected, singularly or in the aggregate, to have a Material Adverse Effect. The
Company is not aware that any key employee or significant group of employees of
the Company or any Subsidiary plans to terminate employment with the Company or
any Subsidiary.

 

(z)     No “prohibited transaction” (as defined in Section 406 of the Employee
Retirement Income Security Act of 1974, as amended, including the regulations
and published interpretations thereunder (“ERISA”), or Section 4975 of the
Internal Revenue Code of 1986, as amended from time to time (the “Code”)) or
“accumulated funding deficiency” (as defined in Section 302 of ERISA) or any of
the events set forth in Section 4043(b) of ERISA (other than events with respect
to which the thirty (30)-day notice requirement under Section 4043 of ERISA has
been waived) has occurred or could reasonably be expected to occur with respect
to any employee benefit plan of the Company or any Subsidiary which could,
singularly or in the aggregate, have a Material Adverse Effect. Each employee
benefit plan of the Company or any Subsidiary is in compliance in all material
respects with applicable law, including ERISA and the Code.  The Company and
each Subsidiary has not incurred and could not reasonably be expected to incur
liability under Title IV of ERISA with respect to the termination of, or
withdrawal from, any pension plan (as defined in ERISA). Each pension plan for
which the Company or any Subsidiary would have any liability that is intended to
be qualified under Section 401(a) of the Code is so qualified, and nothing has
occurred, whether by action or by failure to act, which could, singularly or in
the aggregate, cause the loss of such qualification to the extent such loss
would have a Material Adverse Effect.

 

 
-12-

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

 

 

(aa)     To the best of the Company’s knowledge, the Company and each Subsidiary
is in compliance with all foreign, federal, state and local rules, laws and
regulations relating to the use, treatment, storage and disposal of hazardous or
toxic substances or waste and protection of health and safety or the environment
which are applicable to its businesses (“Environmental Laws”), except where the
failure to comply would not, singularly or in the aggregate, have a Material
Adverse Effect. There has been no storage, generation, transportation, handling,
treatment, disposal, discharge, emission, or other release of any kind of toxic
or other wastes or other hazardous substances regulated by Environmental Laws
(“Hazardous Substances”) by or caused by the Company or any Subsidiary (or, to
the Company’s knowledge and without independent investigation, any other entity
for whose acts or omissions the Company or any Subsidiary is or may otherwise be
liable) upon any of the property now or previously owned or leased by the
Company or any Subsidiary, or upon any other property, in violation of any law,
statute, ordinance, rule, regulation, order, judgment, decree or permit or which
would, under any law, statute, ordinance, rule (including rule of common law),
regulation, order, judgment, decree or permit, give rise to any liability,
except for any violation or liability which would not have, singularly or in the
aggregate with all such violations and liabilities, a Material Adverse Effect;
to the Company’s actual knowledge and without independent investigation, there
has been no disposal, discharge, emission or other release onto property now
leased by the Company or any Subsidiary or into the environment surrounding
such property of any Hazardous Substance, except for any such disposal,
discharge, emission, or other release in violation of Environmental Laws which
would not have, singularly or in the aggregate with all such discharges and
other releases, a Material Adverse Effect.

 

(bb)     The Company and each Subsidiary (i) has timely filed (or filed an
extension to file) all necessary federal, state, local and foreign tax returns,
and all such filed returns were true, complete and correct, (ii) has paid all
federal, state, local and foreign taxes, assessments, governmental or other
charges due and payable for which it is liable, including, without limitation,
all sales and use taxes and all taxes which the Company or any Subsidiary is
obligated to withhold from amounts owing to employees, creditors and third
parties, and (iii) does not have any tax deficiency or claims outstanding or
assessed or, to the best of its knowledge, proposed against any of them, except
those, in each of the cases described in clauses (i), (ii) and (iii) of this
paragraph (bb), that would not, singularly or in the aggregate, have a Material
Adverse Effect. The Company and each Subsidiary has not engaged in any
transaction which is a corporate tax shelter or which could be characterized as
such by the Internal Revenue Service or any other taxing authority. The accruals
and reserves on the books and records of the Company in respect of tax
liabilities for any taxable period not yet finally determined are adequate to
meet any assessments and related liabilities for any such period, and since
December 31, 2010, the Company and each Subsidiary has not incurred any
liability for taxes other than in the ordinary course.

 

(cc)     The Company and each Subsidiary carries, or is covered by, insurance
provided by recognized, financially sound and reputable institutions with
policies in such amounts and covering such risks as is adequate for the conduct
of their respective businesses and the value of its properties and as is
customary for companies engaged in similar businesses in similar industries. The
Company has no reason to believe that it or any Subsidiary will not be able (i)
to renew its existing insurance coverage as and when such policies expire or
(ii) to obtain comparable coverage from similar institutions as may be necessary
or appropriate to conduct their respective businesses as now conducted and at a
cost that would not result in a Material Adverse Effect. Neither the Company nor
any Subsidiary has been denied any insurance coverage that it has sought or for
which it has applied.

 

 
-13-

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

 

 

(dd)     The Company and each Subsidiary maintains a system of internal
accounting and other controls sufficient to provide reasonable assurances that
(i) transactions are executed in accordance with management’s general or
specific authorizations; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with GAAP and to maintain
accountability for assets; (iii) access to assets is permitted only in
accordance with management’s general or specific authorization; and (iv) the
recorded accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences. Except as described in the Registration Statement, the General
Disclosure Package and the Prospectus, since the end of the Company’s most
recent audited fiscal year, there as been (A) no material weakness in the
Company’s internal control over financial reporting (whether or not remediated)
and (B) no change in the Company’s internal control over financial reporting
that has materially affected, or is reasonably likely to materially affect, the
Company’s internal control over financial reporting.

 

(ee)     The minute books of the Company and each Subsidiary have been made
available to the Placement Agent and counsel for the Placement Agent, and such
books (i) contain a complete summary in all material respects of all meetings
and actions of the board of directors (including each board committee) and
shareholders of the Company and each Subsidiary (or analogous governing bodies
and interest holders, as applicable), since January 1, 2012 through the date of
the latest meeting and action, and (ii) accurately, in all material respects,
reflect all transactions referred to in such minutes.

 

(ff)     There is no franchise, lease, contract, agreement or document required
by the Securities Act or by the Rules and Regulations to be described in the
Registration Statement, the General Disclosure Package and the Prospectus or a
document incorporated by reference therein or to be filed as an exhibit to the
Registration Statement or a document incorporated by reference therein which is
not described or filed therein as required; and all descriptions of any such
franchises, leases, contracts, agreements or documents contained in the
Registration Statement, the General Disclosure Package and the Prospectus or in
a document incorporated by reference therein are accurate and complete
descriptions of such documents in all material respects. Other than as described
in the Registration Statement, the General Disclosure Package and the
Prospectus, no such franchise, lease, contract or agreement has been suspended
or terminated for convenience or default by the Company or any Subsidiary or any
of the other parties thereto, and neither the Company nor any Subsidiary has
received notice nor does the Company have any other knowledge of any such
pending or threatened suspension or termination, except for such pending or
threatened suspensions or terminations that would not reasonably be expected to,
singularly or in the aggregate, have a Material Adverse Effect.

 

(gg)     No relationship, direct or indirect, exists between or among the
Company and any Subsidiary on the one hand, and the directors, officers,
shareholders (or analogous interest holders), customers or suppliers of the
Company or any Subsidiary or any of their affiliates on the other hand, which is
required to be described in the Registration Statement, the General Disclosure
Package and the Prospectus or a document incorporated by reference therein and
which is not so described.

 

 
-14-

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

 

 

(hh)     Except as described in the Registration Statement, the General
Disclosure Package and the Prospectus, there are no persons with registration
rights or similar rights to have any securities registered by the Company or any
Subsidiary under the Securities Act. No person or entity has the right to
require registration of shares of Common Stock or other securities of the
Company or any Subsidiary because of the filing or effectiveness of the
Registration Statement, except for persons and entities who have expressly
waived such right in writing or who have been given timely and proper written
notice and have failed to exercise such right within the time or times required
under the terms and conditions of such right.

 

(ii)     Neither the Company nor any Subsidiary owns any “margin securities” as
that term is defined in Regulation U of the Board of Governors of the Federal
Reserve System (the “Federal Reserve Board”), and none of the proceeds of the
sale of the Securities will be used, directly or indirectly, for the purpose of
purchasing or carrying any margin security, for the purpose of reducing or
retiring any indebtedness which was originally incurred to purchase or carry any
margin security or for any other purpose which might cause any of the Securities
to be considered a “purpose credit” within the meanings of Regulation T, U or X
of the Federal Reserve Board.

 

(jj)     Except for this Agreement, neither the Company nor any Subsidiary is a
party to any contract, agreement or understanding with any person that would
give rise to a valid claim against the Company or the Placement Agent for a
brokerage commission, finder’s fee or like payment in connection with the
offering and sale of the Shares and the Warrants or any transaction contemplated
by this Agreement, the Registration Statement, the General Disclosure Package or
the Prospectus.

 

(kk)     No forward-looking statement (within the meaning of Section 27A of the
Securities Act and Section 21E of the Exchange Act) contained in either the
Registration Statement, the General Disclosure Package or the Prospectus has
been made or reaffirmed without a reasonable basis or has been disclosed other
than in good faith.

 

(ll)     The Company is subject to and in compliance in all material respects
with the reporting requirements of Section 13 or Section 15(d) of the Exchange
Act. The Common Stock is registered pursuant to Section 12(b) of the Exchange
Act and is listed on the NASDAQ Global Market, and the Company has taken no
action designed to, or reasonably likely to have the effect of, terminating the
registration of the Common Stock under the Exchange Act or delisting the Common
Stock from the NASDAQ Global Market, nor has the Company received any
notification that the Commission, the NASDAQ Global Market or FINRA is
contemplating terminating such registration or listing, in each case except as
described in the Registration Statement, the General Disclosure Package and the
Prospectus. The Company has obtained or will have obtained, or has made or will
have made, as applicable, all necessary consents, approvals, authorizations or
orders of, or filing, notification or registration with, the NASDAQ Global
Market is required for the listing and trading of the Shares and the Warrant
Shares on the NASDAQ Global Market.

 

 
-15-

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

 

 

(mm)     The Company is in material compliance with all applicable provisions of
the Sarbanes-Oxley Act of 2002 and all rules and regulations promulgated
thereunder or implementing the provisions thereof (the “Sarbanes-Oxley Act”).

 

(nn)     The Company is in material compliance with all applicable corporate
governance requirements set forth in the NASDAQ Marketplace Rules.

 

(oo)     Neither the Company nor any Subsidiary, nor, to the best of the
Company’s knowledge, any employee or agent of the Company or any Subsidiary, has
made any contribution or other payment to any official of, or candidate for, any
federal, state, local or foreign office in violation of any law (including the
Foreign Corrupt Practices Act of 1977, as amended) or of the character required
to be disclosed in the Registration Statement, the General Disclosure Package or
the Prospectus or a document incorporated by reference therein.

 

(pp)     There are no transactions, arrangements or other relationships between
and/or among the Company or any Subsidiary, any of their affiliates (as such
term is defined in Rule 405 of the Securities Act) and any unconsolidated
entity, including, but not limited to, any structured finance, special purpose
or limited purpose entity that could reasonably be expected to materially affect
the Company’s or any Subsidiary’s liquidity or the availability of or
requirements for their capital resources required to be described in the
Registration Statement, the General Disclosure Package and the Prospectus or a
document incorporated by reference therein which have not been described as
required.

 

(qq)     There are no outstanding loans, advances (except normal advances for
business expenses in the ordinary course of business) or guarantees or
indebtedness by the Company to or for the benefit of any of the officers or
directors of the Company or any of their respective family members, except as
disclosed in the Registration Statement, the General Disclosure Package and the
Prospectus.

 

(rr)     The statistical and market related data included in the Registration
Statement, the General Disclosure Package and the Prospectus are based on or
derived from sources that the Company believes to be reliable and accurate, and
such data agree with the sources from which they are derived.

 

(ss)     The operations of the Company and each Subsidiary are and have been
conducted at all times in compliance with applicable financial recordkeeping and
reporting requirements of the Currency and Foreign Transactions Reporting Act of
1970, as amended, applicable money laundering statutes and applicable rules
and regulations thereunder (collectively, the “Money Laundering Laws”), and no
action, suit or proceeding by or before any court or governmental agency,
authority or body or any arbitrator involving the Company or any Subsidiary with
respect to the Money Laundering Laws is pending, or to the best knowledge of the
Company, threatened.

 

 
-16-

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

 

 

(tt)     Neither the Company nor any Subsidiary nor, to the knowledge of the
Company, any director, officer, agent, employee or affiliate of the Company or
any Subsidiary is currently subject to any U.S. sanctions administered by the
Office of Foreign Assets Control of the U.S. Treasury Department (“OFAC”); and
the Company will not directly or indirectly use the proceeds of the offering, or
lend, contribute or otherwise make available such proceeds to any Subsidiary,
joint venture partner or other person or entity, for the purpose of financing
the activities of any person currently subject to any U.S.
sanctions administered by OFAC.

 

(uu)     Neither the Company, nor any Subsidiary, nor any of their affiliates
(within the meaning of FINRA Rule 5121(b)(1)(a)) directly or indirectly
controls, is controlled by, or is under common control with, or is an associated
person (within the meaning of Article I, Section l(ee) of the By-laws of FINRA)
of, any member firm of FINRA.

 

(vv)     No approval of the shareholders of the Company under the rules and
regulations of the NASDAQ Global Market (including NASDAQ Marketplace Rules
5635) is required for the Company to issue and sell the Securities.

 

(ww)     Any certificate signed by or on behalf of the Company and delivered to
the Placement Agent or to counsel for the Placement Agent shall be deemed to be
a representation and warranty by the Company to the Placement Agent and the
Purchasers as to the matters covered thereby.

 

4.     THE CLOSING. The time and date of closing and delivery of the documents
required to be delivered to the Placement Agent pursuant to Sections 5 and 7
hereof shall be at 11:00 A.M., New York time, on April 21. 2015 (the “Closing
Date”) at the office of Lowenstein Sandler, LLP, 1251 Avenue of the Americas,
New York, New York 10020.

 

5.     FURTHER AGREEMENTS OF THE COMPANY. The Company agrees with the Placement
Agent and the Purchasers:

 

(a)     To prepare the Rule 462(b) Registration Statement, if necessary, in a
form approved by the Placement Agent and file such Rule 462(b) Registration
Statement with the Commission on the date hereof; to prepare the Prospectus in a
form approved by the Placement Agent containing information previously omitted
at the time of effectiveness of the Registration Statement in reliance on Rules
430A, 430B and 430C of the Rules and Regulations and to file such Prospectus
pursuant to Rule 424(b) under the Rules and Regulations not later than the
second (2nd) business day following the execution and delivery of this Agreement
or, if applicable, such earlier time as may be required by Rule 430A under the
Rules and Regulations; to notify the Placement Agent immediately of the
Company’s intention to file or prepare any supplement or amendment to any
Registration Statement or to the Prospectus and to make no amendment or
supplement to the Registration Statement, the General Disclosure Package or to
the Prospectus to which the Placement Agent shall reasonably object by notice to
the Company after a reasonable period to review; to advise the Placement Agent,
promptly after it receives notice thereof, of the time when any amendment to any
Registration Statement has been filed or becomes effective or any supplement to
the General Disclosure Package or the Prospectus or any amended Prospectus has
been filed and to furnish the Placement Agent copies thereof; to file promptly
all material required to be filed by the Company with the Commission pursuant to
Rule 433(d) or 163(b)(2), as the case may be, of the Rules and Regulations; to
file promptly all reports and any definitive proxy or information statements
required to be filed by the Company with the Commission pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of
the Prospectus and for so long as the delivery of a prospectus (or in lieu
thereof, the notice referred to in Rule 173(a) under the Rules and Regulations)
is required in connection with the offering or sale of the Securities; to advise
the Placement Agent, promptly after it receives notice thereof, of the issuance
by the Commission of any stop order or of any order preventing or suspending the
use of any Preliminary Prospectus, any Issuer Free Writing Prospectus or the
Prospectus, of the suspension of the qualification of the Securities for
offering or sale in any jurisdiction, of the initiation or threatening of any
proceeding for any such purpose, or of any request by the Commission for the
amending or supplementing of the Registration Statement, the General
Disclosure Package or the Prospectus or for additional information; and, in the
event of the issuance of any stop order or of any order preventing or suspending
the use of the Base Prospectus, any Preliminary Prospectus, any Issuer Free
Writing Prospectus or the Prospectus or suspending any such qualification, and
promptly to use its best efforts to obtain the withdrawal of such order.

 

 
-17-

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

 

 

(b)     The Company represents and agrees that it has not made and, unless it
obtains the prior consent of the Placement Agent, it will not make, any offer
relating to the Securities that would constitute a “free writing prospectus” as
defined in Rule 405 under the Rules and Regulations (each, a “Permitted Free
Writing Prospectus”); provided that the prior written consent of the Placement
Agent hereto shall be deemed to have been given in respect of the Issuer Free
Writing Prospectus[es] included in Schedule A hereto. The Company represents
that it has treated and agrees that it will treat each Permitted Free Writing
Prospectus as an Issuer Free Writing Prospectus, comply with the requirements of
Rules 164 and 433 under the Rules and Regulations applicable to any Issuer Free
Writing Prospectus, including the requirements relating to timely filing
with the Commission, legending and record keeping and will not take any action
that would result in the Placement Agent or the Company being required to file
with the Commission pursuant to Rule 433(d) under the Rules and Regulations a
free writing prospectus prepared by or on behalf of the Placement Agent that the
Placement Agent otherwise would not have been required to file thereunder.

 

(c)     If at any time when a Prospectus relating to the Securities is required
to be delivered under the Securities Act, any event occurs or condition exists
as a result of which the Prospectus, as then amended or supplemented, would
include any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading, or the Registration Statement, as
then amended or supplemented, would include any untrue statement of a material
fact or omit to state a material fact necessary to make the statements therein
not misleading, or if for any other reason it is necessary at any time to amend
or supplement any Registration Statement or the Prospectus to comply with the
Securities Act or the Exchange Act, the Company will promptly notify the
Placement Agent, and upon the Placement Agent’s request, the Company will
promptly prepare and file with the Commission, at the Company’s expense, an
amendment to the Registration Statement or an amendment or supplement to the
Prospectus that corrects such statement or omission or effects such compliance
and will deliver to the Placement Agent, without charge, such number of copies
thereof as the Placement Agent may reasonably request. The Company consents to
the use of the Prospectus or any amendment or supplement thereto by the
Placement Agent.

 

 
-18-

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

 

 

(d)     If the General Disclosure Package is being used to solicit offers to buy
the Securities at a time when the Prospectus is not yet available to prospective
purchasers and any event shall occur as a result of which, in the judgment of
the Company or in the reasonable opinion of the Placement Agent, it becomes
necessary to amend or supplement the General Disclosure Package in order to make
the statements therein, in the light of the circumstances then prevailing, not
misleading, or to make the statements therein not conflict with the information
contained or incorporated by reference in the Registration Statement then on
file and not superseded or modified, or if it is necessary at any time to amend
or supplement the General Disclosure Package to comply with any law, the Company
promptly will either (i) prepare, file with the Commission (if required) and
furnish to the Placement Agent and any dealers an appropriate amendment or
supplement to the General Disclosure Package or (ii) prepare and file with the
Commission an appropriate filing under the Exchange Act which shall be
incorporated by reference in the General Disclosure Package so that the General
Disclosure Package as so amended or supplemented will not, in the light of the
circumstances then prevailing, be misleading or conflict with the Registration
Statement then on file, or so that the General Disclosure Package will comply
with law.

 

(e)     If at any time following issuance of an Issuer Free Writing Prospectus
there occurred or occurs an event or development as a result of which such
Issuer Free Writing Prospectus conflicted or will conflict with the information
contained in the Registration Statement, the Base Prospectus, any Pricing
Prospectus or the Prospectus, including any document incorporated by reference
therein and any prospectus supplement deemed to be a part thereof and not
superseded or modified or included or would include an untrue statement of a
material fact or omitted or would omit to state a material fact required to be
stated therein or necessary in order to make the statements therein, in the
light of the circumstances prevailing at the subsequent time, not misleading,
the Company has promptly notified or will promptly notify the Placement Agent so
that any use of the Issuer Free Writing Prospectus may cease until it is amended
or supplemented and has promptly amended or will promptly amend or supplement,
at its own expense, such Issuer Free Writing Prospectus to eliminate or
correct such conflict, untrue statement or omission. The foregoing sentence does
not apply to statements in or omissions from any Issuer Free Writing Prospectus
in reliance upon, and in conformity with, written information furnished to the
Company by or on behalf of the Placement Agent specifically for inclusion
therein, which information the parties hereto agree is limited to the Placement
Agent’s Information (as defined in Section 17).

 

(f)     To the extent not available on the Commission’s EDGAR system or any
successor system, upon request, to furnish promptly to the Placement Agent and
to counsel for the Placement Agent a signed copy of the Registration Statement
as originally filed with the Commission, and of each amendment thereto filed
with the Commission, including all consents and exhibits filed therewith.

 

 
-19-

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

 

 

(g)     To the extent not available on the Commission’s EDGAR system or any
successor system, to deliver promptly to the Placement Agent in New York City
such number of the following documents as the Placement Agent shall reasonably
request: (i) conformed copies of the Registration Statement as originally
filed with the Commission (in each case excluding exhibits), (ii) the Base
Prospectus, (iii) each Preliminary Prospectus, (iv) any Issuer Free Writing
Prospectus, (v) the Prospectus (the delivery of the documents referred to in
clauses (i), (ii), (iii), (iv) and (v) of this paragraph (g) to be made not
later than 10:00 A.M., New York time, on the business day following the
execution and delivery of this Agreement), (vi) conformed copies of any
amendment to the Registration Statement (excluding exhibits), (vii) any
amendment or supplement to the General Disclosure Package or the Prospectus (the
delivery of the documents referred to in clauses (vi) and (vii) of this
paragraph (g) to be made not later than 10:00 A.M., New York City time, on the
business day following the date of such amendment or supplement) and (viii) any
document incorporated by reference in the Registration Statement, the General
Disclosure Package or the Prospectus (excluding exhibits thereto) (the delivery
of the documents referred to in clause (viii) of this paragraph (g) to be made
not later than 10:00 A.M., New York City time, on the business day following the
date of such document).

 

(h)     To make generally available to its shareholders as soon as practicable,
but in any event not later than eighteen (18) months after the effective date of
each Registration Statement (as defined in Rule 158(c) under the Rules and
Regulations), an earnings statement of the Company and any Subsidiary (which
need not be audited) complying with Section 11(a) of the Securities Act and the
Rules and Regulations (including, at the option of the Company, Rule 158); and
to furnish to its shareholders as soon as practicable after the end of
each fiscal year an annual report (including a balance sheet and statements of
income, shareholders’ equity and cash flows of the Company and its consolidated
subsidiaries certified by independent public accountants) and as soon as
possible after each of the first three fiscal quarters of each fiscal year
(beginning with the first fiscal quarter after the effective date of such
Registration Statement), consolidated summary financial information of the
Company and its subsidiaries for such quarter in reasonable detail.

 

(i)     To take promptly from time to time such actions as the Placement Agent
may reasonably request to qualify the Securities for offering and sale under the
securities or Blue Sky laws of such jurisdictions (domestic or foreign) as the
Placement Agent may designate and to continue such qualifications in effect, and
to comply with such laws, for so long as required to permit the offer and sale
of the Securities in such jurisdictions; provided that the Company shall not be
obligated to qualify as foreign corporations in any jurisdiction in which they
are not so qualified or to file a general consent to service of process in any
jurisdiction.

 

(j)     To the extent not available on the Commission’s EDGAR system or any
successor system, during the period of two (2) years from the date hereof, to
deliver to the Placement Agent, (i) as soon as they are available, copies of all
reports or other communications furnished to shareholders, and (ii) as soon as
they are available, copies of any reports and financial statements furnished or
filed with the Commission or any national securities exchange or automatic
quotation system on which the Company’s securities are listed or quoted.

 

 
-20-

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

 

 

(k)     That the Company will not, for a period of 135 days from the date of the
Prospectus, (the “Lock-Up Period”) without the prior written consent of the
Placement Agent, directly or indirectly offer, sell, assign, transfer, pledge,
contract to sell, or otherwise dispose of, any shares of Common Stock or any
securities convertible into or exercisable or exchangeable for Common Stock,
other than: (i) the Company’s sale of the Securities hereunder; (ii) the
issuance of restricted Common Stock, restricted stock units or options to
acquire Common Stock pursuant to the Company’s employee benefit plans, qualified
stock option plans or other employee compensation plans as such plans are
in existence on the date hereof and described in the Prospectus; and (iii) the
issuance of Common Stock pursuant to the valid exercises of options, warrants or
rights or vesting of restricted stock units outstanding on the date hereof. The
Company will cause each executive officer, director, shareholder, optionholder
and warrantholder listed in Schedule B to furnish to the Placement Agent, on or
prior to the date of this Agreement, a letter, substantially in the form of
Exhibit C hereto, pursuant to which each such person shall agree, among other
things, not to directly or indirectly offer, sell, assign, transfer, pledge,
contract to sell, or otherwise dispose of, any shares of Common Stock or any
securities convertible into or exercisable or exchangeable for Common Stock, not
to engage in any swap or other agreement or arrangement that transfers, in whole
or in part, directly or indirectly, the economic risk of ownership of Common
Stock or any such securities and not to engage in any short selling of any
Common Stock or any such securities, for a period of ninety (90) days from the
date of the Prospectus, without the prior written consent of the Placement
Agent. The Company also agrees that during the Lock-Up Period, the Company will
not file any registration statement, preliminary prospectus or prospectus, or
any amendment or supplement thereto, under the Securities Act for any such
transaction or which registers, or offers for sale, Common Stock or any
securities convertible into or exercisable or exchangeable for Common Stock,
except for (i) a registration statement on Form S-8 relating to employee benefit
plans and (ii) the registration of securities as required pursuant to
registration rights agreements entered into prior to the date hereof.

 

(l)     To supply the Placement Agent with copies of all correspondence to and
from, and all documents issued to and by, the Commission in connection with the
registration of the Securities under the Securities Act or the Registration
Statement, any Preliminary Prospectus or the Prospectus, or any amendment or
supplement thereto or document incorporated by reference therein.

 

(m)     Prior to the Closing Date, to furnish to the Placement Agent, as soon as
they have been prepared, copies of any unaudited interim consolidated financial
statements of the Company for any periods subsequent to the periods covered by
the financial statements appearing in the Registration Statement and
the Prospectus.

 

(n)     Prior to the Closing Date, not to issue any press release or other
communication directly or indirectly or hold any press conference with respect
to the Company, its condition, financial or otherwise, or earnings, business
affairs or business prospects (except for routine oral marketing communications
in the ordinary course of business and consistent with the past practices of the
Company and of which the Placement Agent is notified), without the prior written
consent of the Placement Agent, unless in the judgment of the Company and its
counsel, and after notification to the Placement Agent, such press release or
communication is required by law or applicable stock exchange rules.

 

 
-21-

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

 

 

(o)     Until the Placement Agent shall have notified the Company of the
completion of the offering of the Securities, that the Company will not, and
will cause its affiliated purchasers (as defined in Regulation M under
the Exchange Act) not to, either alone or with one or more other persons, bid
for or purchase, for any account in which it or any of its affiliated purchasers
has a beneficial interest, any Securities, or attempt to induce any person to
purchase any Securities; and not to, and to cause its affiliated purchasers not
to, make bids or purchase for the purpose of creating actual, or apparent,
active trading in or of raising the price of the Securities.

 

(p)     Not to take any action prior to the Closing Date which would require the
Prospectus to be amended or supplemented pursuant to Section 5.

 

(q)     To at all times comply in all material respects with all applicable
provisions of the Sarbanes-Oxley Act in effect from time to time.

 

(r)     To apply the net proceeds from the sale of the Shares and the Warrants
as set forth in the Registration Statement, the General Disclosure Package and
the Prospectus under the heading “Use of Proceeds.”

 

(s)     To use its commercially reasonable best efforts to effect, list and
maintain, subject to notice of issuance, the Common Stock on the NASDAQ Global
Market.

 

(t)     To use its commercially reasonable best efforts to assist the Placement
Agent with any filings with FINRA and obtaining clearance from FINRA as to the
amount of compensation allowable or payable to the Placement Agent.

 

(u)     To use its commercially reasonable best efforts to do and perform all
things required to be done or performed under this Agreement by the Company
prior to the Closing Date and to satisfy all conditions precedent to the
delivery of the Shares and the Warrants

 

 
-22-

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

 

 

(v)     Promptly following the Closing Date, the Company shall take all
corporate action necessary to call a meeting of its shareholders (which may be
its annual meeting) (the “Shareholders Meeting”), which shall occur not later
than the 135th day after the Closing Date, for the purpose of seeking approval
of the Company’s shareholders to increase the number of shares of Common Stock
the Company is authorized to issue in an amount sufficient to permit the
exercise in full of the Warrants in accordance with their terms (the “Capital
Event”). In connection therewith, the Company will as soon as reasonably
practicable after the Closing Date file with the Commission proxy materials
(including a proxy statement and form of proxy) for use at the Shareholders
Meeting and, after receiving and promptly responding to any comments of the
Commission thereon, shall as soon as reasonably practicable mail such proxy
materials to the shareholders of the Company. The Company will comply with
Section 14(a) of the Exchange Act and the rules promulgated thereunder in
relation to any proxy statement (as amended or supplemented, the “Proxy
Statement”) and any form of proxy to be sent to the shareholders of the Company
in connection with the Shareholders Meeting, and the Proxy Statement shall not,
on the date that the Proxy Statement (or any amendment thereof or supplement
thereto) is first mailed to shareholders or at the time of the Shareholders
Meeting, contain any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements made therein not false
or misleading, or omit to state any material fact necessary to correct any
statement in any earlier communication with respect to the solicitation of
proxies or the Shareholders Meeting which has become false or misleading. If the
Company should discover at any time prior to the Shareholders Meeting, any event
relating to the Company or its Subsidiaries or any of their respective
affiliates, officers or directors that is required to be set forth in a
supplement or amendment to the Proxy Statement, in addition to the Company’s
obligations under the Exchange Act, the Company will promptly inform the
Placement Agent thereof. The Company’s Board of Directors shall recommend to the
Company’s shareholders that the shareholders vote in favor of the Capital Event
at the Shareholders Meeting and take all commercially reasonable action
(including, without limitation, the hiring of a proxy solicitation firm of
nationally recognized standing) to solicit the approval of the shareholders for
the Capital Event. No later than two (2) business days following shareholder
approval of the Capital Event, the Company shall file with the Secretary of
State of Minnesota a certificate of amendment to the Company’s Articles of
Incorporation to effect the Capital Event, which certificate of amendment shall
provide that it shall become immediately effective upon filing. The Company
shall issue a press release or file a Current Report on Form 8-K announcing the
effectiveness of the Capital Event no later than one (1) business day after such
filing. The date on which the Capital Event becomes effective is referred to
herein as the “Capital Event Date.” The Company shall not be required to comply
with this clause (v) if the Warrants have ceased to be outstanding in accordance
with their terms.

 

(w)     No later than five (5) business days after the Capital Event Date, the
Company shall file with the Commission a registration statement (which shall be
on Form S-3 unless the Company is not then eligible to use Form S-3 to register
the Series B Warrant Shares) for the registration under the Securities Act of
the Series B Warrant Shares (the “Additional Registration Statement”), and it
shall take such reasonable action as is necessary to qualify for sale, in those
states in which the Series B Warrants were initially offered by the Company, the
Series B Warrant Shares, provided, however, that no such qualification shall be
required in any jurisdiction where, as a result thereof, the Company would be
subject to service of general process or to taxation as a foreign corporation
doing business in such jurisdiction. The Company shall use its commercially
reasonable efforts to cause the Additional Registration Statement to become
effective as promptly as practicable and in no event later than the time that
the Series B Warrants first become exercisable in accordance with their terms
and shall use its commercially reasonable efforts to maintain the effectiveness
and availability of such registration statement until the earlier of (i) the
expiration of the Series B Warrants in accordance with their terms or (ii) the
time no Series B Warrants remain outstanding. The indemnification provisions
contained in Section 8 hereof shall apply to the Additional Registration
Statement. The Company shall take all commercially reasonable action to include
the Warrant Shares for listing or quotation on such exchange or trading market
on which the Common Stock is then listed or quoted on or prior to the date that
the Series B Warrants first become exercisable in accordance with their terms.
Notwithstanding the provisions of this clause (w), the Company shall not be
required to file or maintain the effectiveness of an Additional Registration
Statement in the event that the Company delivers to the Placement Agent an
opinion (in form and substance reasonably satisfactory to the Placement Agent)
of outside counsel to the Company reasonably satisfactory to the Placement Agent
to the effect that the issuance of the Series B Warrant Shares to the holders of
the Series B Warrants is exempt from the registration requirements of the
Securities Act and may be freely resold by any holder of Warrants that is not an
affiliate of the Company at the time of exercise without further registration
under the Securities Act pursuant to a cashless exercise effected pursuant to
the terms of the Series B Warrants (the “Opinion of Counsel”). In the event that
the Company (i) determines that it does not wish to file and maintain the
effectiveness of an Additional Registration Statement in compliance with the
terms of this paragraph, (ii) elects instead to permit holders of the Series B
Warrants to effect a cashless exercise of the Series B Warrants pursuant to the
terms of the Series B Warrants, and (iii) delivers the Opinion of Counsel, no
later than two (2) business days after the delivery of such Opinion of Counsel,
the Company shall issue a press release or file a Current Report on Form 8-K
announcing that it has determined not to file and maintain the effectiveness of
an Additional Registration Statement, and explaining in reasonable detail the
basis on which the Series B Warrant Shares may be issued to and freely resold by
holders of the Series B Warrants who are not affiliates of the Company upon the
exercise of the Series B Warrants. The Company shall not be required to comply
with this clause (w) if the Series B Warrants have ceased to be outstanding in
accordance with their terms.

 

 
-23-

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

 

 

6.     PAYMENT OF EXPENSES. The Company agrees to pay, or reimburse if paid by
the Placement Agent, whether or not the transactions contemplated hereby are
consummated or this Agreement is terminated: (a) the costs incident to the
authorization, issuance, sale, preparation and delivery of the Securities to the
Purchasers and any taxes payable in that connection; (b) the costs incident to
the Registration of the Securities under the Securities Act; (c) the costs
incident to the preparation, printing and distribution of the Registration
Statement, the Base Prospectus, any Preliminary Prospectus, any Pricing
Prospectus, any Issuer Free Writing Prospectus, the General Disclosure Package,
the Prospectus, any amendments, supplements and exhibits thereto or any document
incorporated by reference therein and the costs of printing, reproducing and
distributing any transaction document by mail, telex or other means of
communications; (d) the fees and expenses (including related fees and expenses
of counsel for the Placement Agent, if any) incurred in connection with securing
any required review by FINRA of the terms of the sale of the Securities and any
filings made with FINRA; (e) any applicable listing, quotation or other fees;
(f) the fees and expenses (including related fees and expenses of counsel to the
Placement Agent) of qualifying the Securities under the securities laws of the
several jurisdictions as provided in Section 5(i) and of preparing, printing
and distributing wrappers, Blue Sky Memoranda and Legal Investment Surveys; (g)
the cost of preparing and printing stock and Warrant certificates; (h) all fees
and expenses of the registrar and transfer agent of the Shares and the Warrant
Shares and any registrat and transfer agent of the Warrants; (i) the
reasonable and documented fees, disbursements and expenses of counsel to the
Placement Agent not to exceed, along with any fees and expenses incurred in
connection with (d) above by counsel to the Placement Agent, $50,000; and (j)
all other costs and expenses incident to the offering of the Securities or the
performance of the obligations of the Company under this Agreement (including,
without limitation, the fees and expenses of the Company’s counsel and the
Company’s independent accountants and the travel and other reasonable documented
expenses incurred by Company personnel in connection with any “road show”
including, without limitation, any expenses advanced by the Placement Agent on
the Company’s behalf (which will be promptly reimbursed)); provided that, except
to the extent otherwise provided in this Section 6 and in Sections 8 and 10, the
Placement Agent shall pay its own costs and expenses to the extent not
reimbursed by the Company. In no event will the total amount of compensation
paid to the Placement Agent and other securities brokers and dealers upon
completion of this Offering exceed 8.0% of the gross proceeds of the Offering.

 

 
-24-

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

 

 

7.     CONDITIONS TO THE OBLIGATIONS OF THE PLACEMENT AGENT AND THE PURCHASERS,
AND THE SALE OF THE SHARES AND THE WARRANTS. The respective obligations of the
Placement Agent hereunder and the Purchasers under the Subscription Agreements,
and the Closing of the sale of the Shares and the Warrants, are subject to the
accuracy, when made and as of the Applicable Time and on the Closing Date, of
the representations and warranties of the Company contained herein, to the
accuracy of the statements of the Company made in any certificates pursuant to
the provisions hereof, to the performance by the Company of its obligations
hereunder, and to each of the following additional terms and conditions:

 

(a)     No stop order suspending the effectiveness of the Registration Statement
or any part thereof, preventing or suspending the use of any Base Prospectus,
any Preliminary Prospectus, any Pricing Prospectus, the Prospectus or any
Permitted Free Writing Prospectus or any part thereof shall have been issued and
no proceedings for that purpose or pursuant to Section 8A under the Securities
Act shall have been initiated or threatened by the Commission, and all requests
for additional information on the part of the Commission (to be included or
incorporated by reference in the Registration Statement or the Prospectus or
otherwise) shall have been complied with to the reasonable satisfaction of the
Placement Agent; the Rule 462(b) Registration Statement, if any, each Issuer
Free Writing Prospectus, if any, and the Prospectus shall have been filed with
the Commission within the applicable time period prescribed for such filing by,
and in compliance with, the Rules and Regulations and in accordance
with Section 5(a) and the Rule 462(b) Registration Statement, if any, shall have
become effective immediately upon its filing with the Commission; and FINRA
shall have raised no objection to the fairness and reasonableness of the terms
of this Agreement or the transactions contemplated hereby.

 

(b)     The Placement Agent shall not have discovered and disclosed to the
Company on or prior to the Closing Date that the Registration Statement or any
amendment or supplement thereto contains an untrue statement of a fact which, in
the opinion of counsel for the Placement Agent, is material or omits to state
any fact which, in the opinion of such counsel, is material and is required to
be stated therein or is necessary to make the statements therein not misleading,
or that the General Disclosure Package, any Issuer Free Writing Prospectus or
the Prospectus or any amendment or supplement thereto contains an untrue
statement of fact which, in the opinion of such counsel, is material or omits to
state any fact which, in the opinion of such counsel, is material and is
necessary in order to make the statements, in the light of the circumstances
in which they were made, not misleading.

 

 
-25-

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

 

 

(c)     All corporate proceedings and other legal matters incident to the
authorization, form and validity of each of this Agreement, the Subscription
Agreements, the Securities, the Registration Statement, the General Disclosure
Package, each Issuer Free Writing Prospectus, if any, and the Prospectus and all
other legal matters relating to this Agreement and the transactions contemplated
hereby shall be reasonably satisfactory in all material respects to counsel for
the Placement Agent, and the Company shall have furnished to such counsel all
documents and information that they may reasonably request to enable them to
pass upon such matters.

 

(d)     Winthrop & Weinstine, P.A. shall have furnished to the Placement Agent,
such counsel’s written opinion and negative assurances statement, as counsel to
the Company, addressed to the Placement Agent and dated the Closing Date, to the
effect set forth in Schedule C attached hereto.

 

(e)     [intentionally omitted]

 

(f)     The Placement Agent shall have received from Grant Thornton LLP, a
letter, addressed to the Placement Agent, executed and dated on the date hereof
and on the Closing Date, in form and substance reasonably satisfactory to the
Placement Agent (i) confirming that they are an independent registered
accounting firm with respect to the Company and any Subsidiary within the
meaning of the Securities Act and the Rules and Regulations and PCAOB and (ii)
stating the conclusions and findings of such firm, of the type ordinarily
included in accountants’ “comfort letters” to underwriters, with respect to the
financial statements and certain financial information contained or incorporated
by reference in the Registration Statement, the General Disclosure Package and
the Prospectus.

 

(g)      The Company shall have furnished to the Placement Agent a certificate,
dated the Closing Date, of its Chief Executive Officer, its President or a Vice
President and its Chief Financial Officer stating that (i) such officers have
carefully examined the Registration Statement, the General Disclosure Package,
any Permitted Free Writing Prospectus and the Prospectus and, in their opinion,
the Registration Statement and each amendment thereto, at the Applicable Time
and as of the date of this Agreement and as of the Closing Date did not include
any untrue statement of a material fact and did not omit to state a material
fact required to be stated therein or necessary to make the statements
therein not misleading, and the General Disclosure Package, as of the Applicable
Time and as of the Closing Date, any Permitted Free Writing Prospectus as of its
date and as of the Closing Date, the Prospectus and each amendment or supplement
thereto, as of the respective date thereof and as of the Closing Date, did not
include any untrue statement of a material fact and did not omit to state a
material fact necessary in order to make the statements therein, in the light of
the circumstances in which they were made, not misleading, (ii) since the
effective date of the Registration Statement, no event has occurred which should
have been set forth in a supplement or amendment to the Registration Statement,
the General Disclosure Package or the Prospectus, (iii) to the best of their
knowledge after reasonable investigation, as of the Closing Date, the
representations and warranties of the Company in this Agreement are true and
correct and the Company has complied with all agreements and satisfied all
conditions on its part to be performed or satisfied hereunder at or prior to the
Closing Date, and (iv) there has not been, subsequent to the date of the most
recent audited financial statements included or incorporated by reference in the
Registration Statement, the General Disclosure Package and the Prospectus, any
material adverse change in the financial position or results of operations of
the Company or any Subsidiary, or any change or development that, singularly or
in the aggregate, would involve a material adverse change or a prospective
material adverse change, in or affecting the condition (financial or otherwise),
results of operations, business, assets or prospects of the Company or any
Subsidiary, except as set forth in the Registration Statement, the General
Disclosure Package and the Prospectus.

 

 
-26-

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

 

 

(h)     Since the date of the latest audited financial statements included in
the Registration Statement, the General Disclosure Package and the Prospectus or
incorporated by reference therein as of the date hereof, (i) neither the Company
nor any Subsidiary shall have sustained any loss or interference with its
business from fire, explosion, flood or other calamity, whether or not covered
by insurance, or from any labor dispute or court or governmental action, order
or decree, otherwise than as set forth in the Registration Statement, the
General Disclosure Package and the Prospectus, and (ii) there shall not have
been any change in the capital stock (other than the cancellation of stock
options or a change in the number of outstanding shares of Common Stock due to
the issuance of shares upon the exercise of outstanding options or warrants or
the vesting of restricted stock units) or long-term debt of the Company or any
Subsidiary, or any change, or any development involving a prospective change, in
or affecting the business, management, financial position, shareholders’ equity
or results of operations of the Company, otherwise than as set forth in the
Registration Statement, the General Disclosure Package and the Prospectus, the
effect of which, in any such case described in clause (i) or (ii) of this
paragraph (h) is, in the judgment of the Placement Agent, so material and
adverse as to make it impracticable or inadvisable to proceed with the sale or
delivery of the Securities on the terms and in the manner contemplated in the
General Disclosure Package.

 

(i)     No action shall have been taken and no law, statute, rule, regulation or
order shall have been enacted, adopted or issued by any governmental agency or
body which would prevent the issuance or sale of the Securities or materially
and adversely affect or potentially materially and adversely affect the business
or operations of the Company or any Subsidiary; and no injunction, restraining
order or order of any other nature by any federal or state court of competent
jurisdiction shall have been issued which would prevent the issuance or sale of
the Securities or materially and adversely affect or potentially materially and
adversely affect the business or operations of the Company or any Subsidiary.

 

(j)     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, NYSE MKT or the NASDAQ Stock Market or in the
over-the-counter market, or trading in any securities of the Company on
any exchange or in the over-the-counter market, shall have been suspended or
materially limited, or minimum or maximum prices or maximum range for prices
shall have been established on any such exchange or such market by the
Commission, by such exchange or market or by any other regulatory body or
governmental authority having jurisdiction, (ii) a banking moratorium shall have
been declared by Federal or state authorities or a material disruption has
occurred in commercial banking or securities settlement or clearance services in
the United States, (iii) the United States shall have become engaged in
hostilities, or the subject of an act of terrorism, or there shall have been an
outbreak of or escalation in hostilities involving the United States, or there
shall have been a declaration of a national emergency or war by the United
States or (iv) there shall have occurred such a material adverse change in
general economic, political or financial conditions (or the effect of
international conditions on the financial markets in the United States shall be
such) as to make it, in the reasonable judgment of the Placement Agent,
impracticable or inadvisable to proceed with the sale or delivery of the
Securities on the terms and in the manner contemplated in the Registration
Statement, the General Disclosure Package and the Prospectus.

 

 
-27-

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

 

 

(k)     The Company shall have filed a Notification: Listing of Additional
Shares with the NASDAQ Global Market relating to the Shares and the Warrant
Shares and shall have received no objection thereto from the NASDAQ Global
Market.

 

(l)     The Placement Agent shall have received on or prior to the date of this
Agreement the written agreements, substantially in the form of Exhibit C hereto,
of the executive officers, directors, shareholders, optionholders and
warrantholders of the Company listed in Schedule B to this Agreement.

 

(m)     The Company shall have entered into Subscription Agreements with each of
the Purchasers and such agreements shall be in full force and effect.

 

(n)     FINRA shall have raised no objection as to the amount of compensation
allowable or payable to the Placement Agent as described in the General
Disclosure Package, any Pricing Prospectus or any Preliminary Prospectus.

 

(o)     Prior to the Closing Date, the Company shall have furnished to the
Placement Agent such further information, opinions, certificates, letters or
documents as the Placement Agent shall have reasonably requested.

 

All opinions, letters, evidence and certificates mentioned above or elsewhere in
this Agreement shall be deemed to be in compliance with the provisions hereof
only if they are in form and substance reasonably satisfactory to counsel for
the Placement Agent.

 

 
-28-

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

 

 

8.     INDEMNIFICATION AND CONTRIBUTION.

 

(a)     The Company shall indemnify and hold harmless the Placement Agent, its
affiliates and each of its and their respective directors, officers, members,
employees, representatives and agents and its affiliates, and each of its and
their respective directors, officers, members, employees, representatives and
agents and each person, if any, who controls the Placement Agent within
the meaning of Section 15 of the Securities Act of or Section 20 of the Exchange
Act (collectively the “Placement Agent Indemnified Parties,” and each a
“Placement Agent Indemnified Party”) against any loss, claim, damage, expense or
liability whatsoever (or any action, investigation or proceeding in
respect thereof), joint or several, to which such Placement Agent Indemnified
Party may become subject, under the Securities Act or otherwise, insofar as such
loss, claim, damage, expense, liability, action, investigation or proceeding
arises out of or is based upon (A) any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement, the Base
Prospectus, any Preliminary Prospectus, any Pricing Prospectus, any Issuer Free
Writing Prospectus, any “issuer information” filed or required to be filed
pursuant to Rule 433(d) under the Rules and Regulations, or the Prospectus, or
in any amendment or supplement thereto or document incorporated by reference
therein, (B) the omission or alleged omission to state in the Registration
Statement, the Base Prospectus, any Preliminary Prospectus, any Pricing
Prospectus, any Issuer Free Writing Prospectus, any “issuer information” filed
or required to be filed pursuant to Rule 433(d) under 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, or (C) any breach of
the representations and warranties of the Company contained herein or in the
Subscription Agreements or failure of the Company to perform its obligations
hereunder or thereunder or pursuant to any law, any act or failure to act, or
any alleged act or failure to act, by the Placement Agent in connection with,
or relating in any manner to, the Securities or the Offering, and which is
included as part of or referred to in any loss, claim, damage, expense,
liability, action, investigation or proceeding arising out of or based upon
matters covered by subclause (A), (B) or (C) above of this Section 8(a)
(provided that the Company shall not be liable in the case of any matter covered
by this subclause (C) to the extent that it is determined in a final judgment by
a court of competent jurisdiction that such loss, claim, damage, expense
or liability resulted 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 the Placement Agent Indemnified Party
promptly upon demand for any legal fees or other expenses reasonably incurred by
that Placement Agent Indemnified Party in connection with investigating, or
preparing to defend, or defending against, or appearing as a third party witness
in respect of, or otherwise incurred in connection with, any such loss, claim,
damage, expense, liability, action, investigation or proceeding, as such fees
and expenses are incurred; provided, however, that the Company shall not be
liable in any such case to the extent that any such loss, claim, damage, expense
or liability arises out of or is based upon an untrue statement or alleged
untrue statement in, or omission or alleged omission from the Registration
Statement, the Base Prospectus, any Preliminary Prospectus, any Pricing
Prospectus, any Issuer Free Writing Prospectus, any “issuer information” filed
or required to be filed pursuant to Rule 433(d) under the Rules and Regulations,
or the Prospectus, or in any amendment or supplement thereto or document
incorporated by reference therein made in reliance upon and in conformity with
written information furnished to the Company by or on behalf of the Placement
Agent specifically for use therein, which information the parties hereto agree
is limited to the Placement Agent’s Information (as defined in
Section 17).  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 the
Placement Agent Indemnified Party.

 

 
-29-

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

 

 

(b)     The Placement Agent shall indemnify and hold harmless the Company and
its directors, its officers who signed the Registration Statement and each
person, if any, who controls the Company within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act (collectively the “Company
Indemnified Parties” and each a “Company Indemnified Party”) against any loss,
claim, damage, expense or liability whatsoever (or any action, investigation or
proceeding in respect thereof), joint or several, to which such Company
Indemnified Party may become subject, under the Securities Act or otherwise,
insofar as such loss, claim, damage, expense, liability, action, investigation
or proceeding arises out of or is based upon (i) any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement, the
Base Prospectus, any Preliminary Prospectus, any Pricing Prospectus, any Issuer
Free Writing Prospectus, any “issuer information” filed or required to be filed
pursuant to Rule 433(d) under the Rules and Regulations, or the Prospectus, or
in any amendment or supplement thereto or document incorporated by reference
therein, or (ii) the omission or alleged omission to state in the Registration
Statement, the Base Prospectus, any Preliminary Prospectus, any Pricing
Prospectus, any Issuer Free Writing Prospectus, any “issuer information” filed
or required to be filed pursuant to Rule 433(d) under 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, but in each case
only to the extent that the untrue statement or alleged untrue statement or
omission or alleged omission was made in reliance upon and in conformity with
written information furnished to the Company by the Placement Agent specifically
for use therein, which information the parties hereto agree is limited to the
Placement Agent’s Information as defined in Section 17 and shall reimburse the
Company for any legal or other expenses reasonably incurred by such party in
connection with investigating or preparing to defend or defending against or
appearing as third party witness in connection with any such loss, claim,
damage, liability, action, investigation or proceeding, as such fees and
expenses are incurred. Notwithstanding the provisions of this Section 8(b) in no
event shall any indemnity by the Placement Agent under this Section 8(b) exceed
the total compensation received by the Placement Agent in accordance with
Section 2.5.

 

 
-30-

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

 

 

(c)     Promptly after receipt by an indemnified party under this Section 8 of
notice of the commencement of any action, the indemnified party shall, if a
claim in respect thereof is to be made against an indemnifying party under this
Section 8 notify such indemnifying party in writing of the commencement of that
action; provided, however, that the failure to notify the indemnifying party
shall not relieve it from any liability which it may have under this Section 8
except to the extent it has been materially prejudiced by such failure; and,
provided, further, that the failure to notify an indemnifying party shall not
relieve it from any liability which it may have to an indemnified party
otherwise than under this Section 8. If any such action shall be brought against
an indemnified party, and it shall notify the indemnifying party thereof, the
indemnifying party shall be entitled to participate therein and, to the extent
that it wishes, jointly with any other similarly notified indemnifying party, to
assume the defense of such action with counsel reasonably satisfactory to the
indemnified party (which counsel shall not, except with the written consent of
the indemnified party, be counsel to the indemnifying party). After notice from
the indemnifying party to the indemnified party of its election to assume the
defense of such action, except as provided herein, the indemnifying party shall
not be liable to the indemnified party under Section 8 for any legal or other
expenses subsequently incurred by the indemnified party in connection with the
defense of such action other than reasonable costs of investigation; provided,
however, that any indemnified party shall have the right to employ separate
counsel in any such action and to participate in the defense of such action but
the fees and expenses of such counsel (other than reasonable costs of
investigation) shall be at the expense of such indemnified party unless (i) the
employment thereof has been specifically authorized in writing by the Company in
the case of a claim for indemnification under Section 8(a) or Section 2.6 or the
Placement Agent in the case of a claim for indemnification under Section 8(b),
(ii) such indemnified party shall have been advised by its counsel that there
may be one or more legal defenses available to it which are different from or
additional to those available to the indemnifying party, or (iii) the
indemnifying party has failed to assume the defense of such action and employ
counsel reasonably satisfactory to the indemnified party within a reasonable
period of time after notice of the commencement of the action or the
indemnifying party does not diligently defend the action after assumption of the
defense, in which case, if such indemnified party notifies the indemnifying
party in writing that it elects to employ separate counsel at the expense of the
indemnifying party, the indemnifying party shall not have the right to assume
the defense of (or, in the case of a failure to diligently defend the action
after assumption of the defense, to continue to defend) such action on behalf of
such indemnified party and the indemnifying party shall be responsible for legal
or other expenses subsequently incurred by such indemnified party in connection
with the defense of such action; provided, however, that the indemnifying party
shall not, in connection with any one such action or separate but substantially
similar or related actions in the same jurisdiction arising out of the same
general allegations or circumstances, be liable for the reasonable fees and
expenses of more than one separate firm of attorneys at any time for all such
indemnified parties (in addition to any local counsel), which firm shall be
designated in writing by the Placement Agent if the indemnified parties under
this Section 8 consist of any Placement Agent Indemnified Party or by the
Company if the indemnified parties under this Section 8 consist of any Company
Indemnified Parties. Subject to this Section 8(c), the amount payable by an
indemnifying party under Section 8 shall include, but not be limited to, (x)
reasonable legal fees and expenses of counsel to the indemnified party and any
other expenses in investigating, or preparing to defend or defending against, or
appearing as a third party witness in respect of, or otherwise incurred in
connection with, any action, investigation, proceeding or claim, and (y) all
amounts paid in settlement of any of the foregoing. No indemnifying party shall,
without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of judgment with respect to any pending or
threatened action or any claim whatsoever, in respect of which indemnification
or contribution could be sought under this Section 8 (whether or not the
indemnified parties are actual or potential parties thereto), unless such
settlement, compromise or consent (i) includes an unconditional release of each
indemnified party in form and substance reasonably satisfactory to such
indemnified party from all liability arising out of such action or claim and
(ii) does not include a statement as to or an admission of fault, culpability or
a failure to act by or on behalf of any indemnified party. Subject to the
provisions of the following sentence, no indemnifying party shall be liable for
settlement of any pending or threatened action or any claim whatsoever that is
effected without its written consent (which consent shall not be unreasonably
withheld or delayed), but if settled with its written consent, if its consent
has been unreasonably withheld or delayed or if there be a judgment for the
plaintiff in any such matter, the indemnifying party agrees to indemnify and
hold harmless any indemnified party from and against any loss or liability by
reason of such settlement or judgment. In addition, if at any time an
indemnified party shall have requested that an indemnifying party reimburse the
indemnified party for fees and expenses of counsel, such indemnifying party
agrees that it shall be liable for any settlement of the nature contemplated
herein effected without its written consent if (i) such settlement is entered
into more than forty-five (45) days after receipt by such indemnifying party of
the request for reimbursement, (ii) such indemnifying party shall have received
notice of the terms of such settlement at least thirty (30) days prior to such
settlement being entered into and (iii) such indemnifying party shall not have
reimbursed such indemnified party in accordance with such request prior to the
date of such settlement.

 

 
-31-

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

 

 

(d)     If the indemnification provided for in this Section 8 is unavailable or
insufficient to hold harmless an indemnified party under Section 8(a) or
Section 8(b), then each indemnifying party shall, in lieu of indemnifying such
indemnified party, contribute to the amount paid, payable or otherwise incurred
by such indemnified party as a result of such loss, claim, damage, expense or
liability (or any action, investigation or proceeding in respect thereof), as
incurred, (i) in such proportion as shall be appropriate to reflect the
relative benefits received by the Company on the one hand and the Placement
Agent on the other hand from the offering of the Securities, or (ii) if the
allocation provided by clause (i) of this Section 8(d) is not permitted
by applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) of this Section 8(d) but also the
relative fault of the Company on the one hand and the Placement Agent on the
other with respect to the statements, omissions, acts or failures to act which
resulted in such loss, claim, damage, expense or liability (or any action,
investigation or proceeding in respect thereof) as well as any other relevant
equitable considerations. The relative benefits received by the Company on the
one hand and the Placement Agent on the other with respect to such offering
shall be deemed to be in the same proportion as the total net proceeds from the
offering of the Securities purchased under this Agreement (before deducting
expenses) received by the Company bear to the total Placement Fee received
by the Placement Agent in connection with the Offering, in each case as set
forth in the table on the cover page of the Prospectus. The relative fault of
the Company on the one hand and the Placement Agent on the other shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company on the one hand
or the Placement Agent on the other, the intent of the parties and their
relative knowledge, access to information and opportunity to correct or prevent
such untrue statement, omission, act or failure to act; provided that the
parties hereto agree that the written information furnished to the Company by
the Placement Agent for use in the Registration Statement, the Base Prospectus,
any Preliminary Prospectus, any Pricing Prospectus, any Issuer Free Writing
Prospectus, any “issuer information” filed or required to be filed pursuant to
Rule 433(d) under the Rules and Regulations, or the Prospectus, or in any
amendment or supplement thereto or document incorporated by reference therein,
consists solely of the Placement Agent’s Information as defined in Section 17.
The Company and the Placement Agent agree that it would not be just and
equitable if contributions pursuant to this Section 8(d) were to be determined
by pro rata allocation or by any other method of allocation that does not take
into account the equitable considerations referred to herein. The amount paid or
payable by an indemnified party as a result of the loss, claim, damage, expense,
liability, action, investigation or proceeding referred to above in this
Section 8(d) shall be deemed to include, for purposes of this Section 8(d), any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating, preparing to defend or defending against or
appearing as a third party witness in respect of, or otherwise incurred in
connection with, any such loss, claim, damage, expense, liability, action,
investigation or proceeding. Notwithstanding the provisions of this
Section 8(d), the Placement Agent shall not be required to contribute any amount
in excess of the total compensation received by the Placement Agent in
accordance with Section 2.5 less the amount of any damages which the Placement
Agent has otherwise paid or become liable to pay by reason of any untrue or
alleged untrue statement, omission or alleged omission, act or alleged act or
failure to act or alleged failure to act. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.

 

 
-32-

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

 

 

9.     TERMINATION. The obligations of the Placement Agent and the Purchasers
hereunder and under the Subscription Agreements may be terminated by the
Placement Agent, in its absolute discretion by notice given to the Company prior
to delivery of and payment for the Shares and the Warrants if, prior to that
time, (i) any of the conditions to closing in Section 7 shall not have been
satisfied in full and shall not have been expressly waived in writing by the
Placement Agent, (ii) any of the events described in Section 7(a), (b), (h), (i)
or (j) shall have occurred or (iii) the Purchasers shall decline to purchase the
Shares and the Warrants for any reason permitted under this Agreement or the
Subscription Agreements.

 

10.     REIMBURSEMENT OF PLACEMENT AGENT’S EXPENSES. Notwithstanding anything to
the contrary in this Agreement, if (a) this Agreement shall have been terminated
pursuant to Section 9, (b) the Company shall fail to tender the Shares and the
Warrants for delivery to the Purchasers for any reason not permitted under this
Agreement, (c) the Purchasers shall decline to purchase the Shares and the
Warrants for any reason permitted under this Agreement or (d) the sale of
the Shares and the Warrants is not consummated because any condition to the
obligations of the Purchasers or the Placement Agent set forth herein is not
satisfied or because of the refusal, inability or failure on the part of the
Company to perform any agreement herein or to satisfy any condition or to comply
with the provisions hereof, then in addition to the payment of amounts in
accordance with Section 6 the Company shall reimburse the Placement Agent for
the reasonable documented and accountable fees and expenses of the Placement
Agent’s counsel and for such other out-of-pocket expenses as shall have been
reasonably incurred by them in connection with this Agreement and the proposed
purchase of the Shares and the Warrants, and upon demand the Company shall pay
the full amount thereof to the Placement Agent.

 

11.     ABSENCE OF FIDUCIARY RELATIONSHIP. The Company acknowledges and agrees
that:

 

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

 

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

 

(c)     it has been advised that the Placement Agent and its affiliates
are engaged in a broad range of transactions which may involve interests that
differ from those of the Company and that the Placement Agent has no obligation
to disclose such interests and transactions to the Company by virtue of any
fiduciary, advisory or agency relationship; and

 

 
-33-

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

 

 

(d)     it waives, to the fullest extent permitted by law, any claims it may
have against the Placement Agent for breach of fiduciary duty or alleged breach
of fiduciary duty and agrees that the Placement Agent shall have no liability
(whether direct or indirect) to the Company in respect of such a fiduciary duty
claim or to any person asserting a fiduciary duty claim on behalf of or in right
of the Company, including shareholders, employees or creditors of the Company.

 

12.     SUCCESSORS; PERSONS ENTITLED TO BENEFIT OF AGREEMENT. This Agreement
shall inure to the benefit of and be binding upon the Placement Agent, the
Company, and their respective successors and assigns. This Agreement shall also
inure to the benefit of the Purchasers, and each of their respective successors
and assigns, which shall be third party beneficiaries hereof. Nothing expressed
or mentioned in this Agreement is intended or shall be construed to give any
person, other than the persons mentioned in the preceding sentences, any legal
or equitable right, remedy or claim under or in respect of this Agreement, or
any provisions herein contained, this Agreement and all conditions and
provisions hereof being intended to be and being for the sole and exclusive
benefit of such persons and for the benefit of no other person; except that the
representations, warranties, covenants, agreements and indemnities of the
Company contained in this Agreement shall also be for the benefit of the
Placement Agent Indemnified Parties and the indemnities of the  Placement Agent
shall be for the benefit of the Company Indemnified Parties. It is understood
that the Placement Agent’s responsibility to the Company is solely contractual
in nature and the Placement Agent does not owe the Company, or any other party,
any fiduciary duty as a result of this Agreement.

 

13.     SURVIVAL OF INDEMNITIES, REPRESENTATIONS, WARRANTIES, ETC. The
respective indemnities, covenants, agreements, representations, warranties and
other statements of the Company and the Placement Agent, as set forth in this
Agreement or made by them respectively, pursuant to this Agreement, shall remain
in full force and effect, regardless of any investigation made by or on behalf
of the Placement Agent, the Company, the Purchasers or any person controlling
any of them and shall survive delivery of and payment for the Securities.
Notwithstanding any termination of this Agreement, including without limitation
any termination pursuant to Sections 9 or 10, the indemnity and contribution
agreements contained in Section 8 and the covenants, representations, warranties
set forth in this Agreement shall not terminate and shall remain in full force
and effect at all times.

 

14.     NOTICES. All statements, requests, notices and agreements hereunder
shall be in writing, and:

 

(a)     if to the Placement Agent, shall be delivered or sent by mail, telex,
facsimile transmission or overnight courier to Roth Capital Partners, LLC, 888
San Clemente Drive, Newport Beach, California 92660, Attention: Aaron Gurewitz,
Fax: (949) 720-7227, with a copy (which shall not constitute notice) to:
Lowenstein Sandler LLP, 1251 Avenue of the Americas, New York, NY 10020,
Attention: John D. Hogoboom, Fax (973) 597-2400; and

 

 
-34-

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

 

 

(b)     if to the Company, shall be delivered or sent by mail, telex, facsimile
transmission or overnight courier to Speed Commerce, Inc., 1303 E. Arapaho Road,
Suite 200, Richardson, Texas 75081, Attention: General Counsel, Fax: (214)
592-3435, with a copy (which shall not constitute notice) to: Winthrop &
Weinstine, P.A., 225 South 6th Street, Suite 3500, Minneapolis, Minnesota 55402,
Attention: Philip T. Colton, Fax: (612) 604-6929.

 

Any such statements, requests, notices or agreements shall take effect at the
time of receipt thereof, except that any such statement, request, notice or
agreement delivered or sent by email shall take effect at the time of
confirmation of receipt thereof by the recipient thereof.

 

15.     DEFINITION OF CERTAIN TERMS. For purposes of this Agreement, “business
day” means any day on which the New York Stock Exchange, Inc. is open for
trading.

 

16.     GOVERNING LAW, AGENT FOR SERVICE AND JURISDICTION. This Agreement shall
be governed by and construed in accordance with the laws of the State of New
York, including without limitation Section 5-1401 of the New York General
Obligations Law. No legal proceeding may be commenced, prosecuted or continued
in any court other than the courts of the State of New York located in the
City and County of New York or in the United States District Court for the
Southern District of New York, which courts shall have jurisdiction over the
adjudication of such matters, and the Company and the Placement Agent each
hereby consent to the jurisdiction of such courts and personal service with
respect thereto. The Company and the Placement Agent each hereby consent to
personal jurisdiction, service and venue in any court in which any legal
proceeding arising out of or in any way relating to this Agreement is brought by
any third party against the Company or the Placement Agent. The Company and the
Placement Agent each hereby waive all right to trial by jury in any legal
proceeding (whether based upon contract, tort or otherwise) in any way arising
out of or relating to this Agreement. The Company agrees that a final judgment
in any such legal proceeding brought in any such court shall be conclusive and
binding upon the Company and the Placement Agent and may be enforced in any
other courts in the jurisdiction of which the Company is or may be subject, by
suit upon such judgment.

 

17.     PLACEMENT AGENT’S INFORMATION. The parties hereto acknowledge and agree
that, for all purposes of this Agreement, the Placement Agent’s Information
consists solely of the following information in the Prospectus: the second
paragraph under the heading “Plan of Distribution.”

 

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

 

 
-35-

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

 

 

19.     GENERAL. This Agreement constitutes the entire agreement of the parties
to this Agreement and supersedes all prior written or oral and all
contemporaneous oral agreements, understandings and negotiations with respect to
the subject matter hereof. In this Agreement, the masculine, feminine and neuter
genders and the singular and the plural include one another. The
Section headings in this Agreement are for the convenience of the parties only
and will not affect the construction or interpretation of this Agreement. This
Agreement may be amended or modified, and the observance of any term of this
Agreement may be waived, only by a writing signed by the Company and the
Placement Agent.

 

20.     COUNTERPARTS. This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument and such signatures
may be delivered by facsimile.

 

 
-36-

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

 

 

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,

 

SPEED COMMERCE, INC.

 

 

By: _________________________

        Name:

        Title:

 

Accepted as of the date first above written:

 

ROTH CAPITAL PARTNERS, LLC

 

 

 

By:

____________________________
Name: Aaron Gurewitz
Title: Head of Equity Capital Markets

 

 
-37-

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

 

 

SCHEDULE A

 

General Use Free Writing Prospectuses

 

None

 

 

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

 

 

SCHEDULE B

 

 

Rebecca Lynn Atchison

Stephen Duchelle

Timothy R. Gentz

Frederick C. Green IV

Bradley J. Shisler

Alexandra Constantinople

Scott Guilfoyle

Richard S Willis

Terry J. Tuttle

 

 

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

 

 

SCHEDULE C

 

Form of Company counsel opinion

 

1.     The Company is a corporation duly incorporated and is a validly existing
corporation under the laws of the State of Minnesota, with the corporate power
to own, lease and operate its properties and to conduct its business as
described in the Registration Statement, the General Disclosure Package and the
Prospectus and to enter into and perform its obligations under the Placement
Agent Agreement, the Subscription Agreements and the Warrants (collectively, the
“Transaction Documents”).

 

2.     The Company is in good standing under the laws of the State of Minnesota
and is qualified to do business as a foreign corporation and is in good standing
in the following States: Texas.

 

3.     The authorized capital stock of the Company conforms to the description
thereof set forth or incorporated by reference in the Registration Statement,
the General Disclosure Package and the Prospectus. The form of certificate used
to evidence the Common Stock is in proper form and complies with all applicable
requirements of the Certificate of Incorporation and By-laws of the Company and
the Minnesota Business Corporation Act (the “MBCA”).

 

4.     The Warrants conform to the description thereof set forth or incorporated
by reference in the Registration Statement, the General Disclosure Package and
the Prospectus.

 

5.     No shareholder of the Company or any other person has any preemptive
right, right of first refusal or other similar right to subscribe for or
purchase securities of the Company arising (i) pursuant to the Articles of
Incorporation or By-laws of the Company or the MBCA or (ii) to any Contract
filed as an exhibit to the Registration Statement or any report filed by the
Company with the Commission and incorporated by reference into the Registration
Statement.

 

6.     The Placement Agent Agreement has been duly authorized, executed and
delivered by the Company.

 

7.     Each of the Subscription Agreements and the Warrants have been duly
authorized, executed and delivered by the Company, and constitutes a valid,
legal and binding obligation of the Company, enforceable against the Company in
accordance with its terms, except as rights to indemnity hereunder may be
limited by federal or state securities laws and except as such enforceability
may be limited by bankruptcy, insolvency, reorganization or similar laws
affecting the rights of creditors generally and subject to general principles of
equity.

 

8.     The Shares are duly authorized and, when issued and delivered by the
Company pursuant to the Subscription Agreements against payment of the
consideration set forth therein, will be validly issued, fully paid and
nonassessable. The Series A Warrant Shares have been duly authorized and, when
issued and delivered by the Company upon the due exercise of the Series A
Warrants, will be validly issued, fully paid and nonassessable.

 

 

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

 

 

9.     Upon the effectiveness of the Capital Event, the Series B Warrant Shares
will be duly authorized and, when issued and delivered by the Company upon the
due exercise of the Series B Warrants, will be validly issued, fully paid and
nonassessable.

 

10.     The Registration Statement was declared effective under the Securities
Act on February 6, 2015 and, to our knowledge, based solely upon telephonic
confirmation from the staff of the Commission on the date hereof, no order
suspending the effectiveness of the Registration Statement has been issued and
no proceeding for that purpose is pending or, to our knowledge, threatened by
the Commission. The Prospectus was filed with the Commission pursuant to Rule
424(b) under the Securities Act in the manner and within the time period
required by such Rule 424(b).

 

11.     The statements in the Registration Statement, the General Disclosure
Package and the Prospectus under the headings “Description of Capital Stock”
“Description of Securities We Are Offering” and “Plan of Distribution” and in
the Registration Statement in Item 15, insofar as such statements purport to
describe certain provisions of agreements and matters of law or legal
conclusions, fairly summarize the matters described therein in all material
respects.

 

12.     To our knowledge, there are no legal or governmental actions, suits or
proceedings pending or threatened which are required to be disclosed in the
Registration Statement, the General Disclosure Package or the Prospectus, other
than those disclosed therein.

 

13.     To our knowledge, there are no Contracts required to be described or
referred to in the Registration Statement, the General Disclosure Package or the
Prospectus or any report filed by the Company with the Commission and
incorporated by reference into the Registration Statement, the General
Disclosure Package or the Prospectus or to be filed as exhibits to the
Registration Statement, other than those described or referred to therein or
filed or incorporated by reference as exhibits thereto.

 

14.     Except as described in the Registration Statement, the General
Disclosure Package and the Prospectus, there are no persons with registration or
other similar rights to have any debt or equity securities registered for sale
under the Registration Statement or included in the offering contemplated by the
Placement Agent Agreement pursuant to any Contract filed as an exhibit to the
Registration Statement or any report filed by the Company with the Commission
and incorporated by reference into the Registration Statement.

 

15.     The execution and delivery of the Transaction Documents by the Company,
the performance by the Company of its obligations thereunder (other than
performance by the Company of its obligations under the indemnification and
contribution sections of the Placement Agency Agreement, as to which no opinion
need be rendered) and the issuance and sale of the Securities (i) have been duly
authorized by all necessary corporate action on the part of the Company; (ii)
subject to effecting the Capital Event, do not violate the provisions of the
Company’s Articles of Incorporation or By-laws; (iii) do not constitute a
default or Debt Repayment Triggering Event under, give rise to any right of
termination or other right or the cancellation or acceleration of any right or
obligation or loss of a benefit under, or give rise to the creation or
imposition of any lien, encumbrance, security interest, claim or charge upon any
property or assets of the Company or any Subsidiary pursuant to any Contract
filed as an exhibit to the Registration Statement or any report filed by the
Company with the Commission and incorporated by reference into the Registration
Statement; (iv) do not violate applicable federal securities laws or the
provisions of the MBCA; (v) do not require any consents, approvals or
authorizations to be obtained by the Company, or any registrations, declarations
or filings to be made by the Company, in each case, under applicable federal
securities laws or the provisions of the MBCA that have not been obtained or
made; or (vi) do not violate any administrative regulation or administrative or
court decree known by us to the applicable to the Company, except, in the case
of each of clauses (iii) and (iv) only, for those breaches and violations which
would not reasonably be expected to have a Material Adverse Effect, individually
or in the aggregate, and, in the case of clause (v) only, those which the
failure to obtain or make, would not reasonably be expected to result in a
Material Adverse Effect, individually or in the aggregate.

 

 

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

 

 

16.     No consent, approval, authorization or other order of, or registration
or filing with, any Federal or Minnesota court or other governmental or
regulatory authority or agency that, in our experience is normally applicable to
transactions of the type contemplated by the Placement Agent Agreement, is
required for the consummation of the transactions contemplated by the Placement
Agent Agreement, except for the registration of the offer and sale of the
Securities under the Securities Act, which, except for the Series B Warrant
Shares, has been effected, and such consents, approvals, authorizations, orders
and registrations or filings as may be required from the NASDAQ Stock Market and
under applicable state securities laws and from FINRA in connection with the
offering and sale of the Securities by the Placement Agent or applicable state
securities or blue sky laws, as to which we express no opinion.

 

17.     The Company is not required and, after giving effect to the application
of the proceeds received by the Company from the offering and sale of the
Securities as described in the Registration Statement, the General Disclosure
Package and the Prospectus, will not be required to register as an “investment
company” within the meaning of the Investment Company Act.

 

In addition to rendering legal advice and assistance to the Company in the
course of the preparation of the Registration Statement, the General Disclosure
Package and the Prospectus, involving, among other things, discussions and
inquiries concerning various legal matters and the review of certain corporate
records, documents and proceedings, we also participated in conferences with
certain officers and other representatives of the Company, its independent
certified public accountants and you and your counsel, at which the contents of
the Registration Statement, the General Disclosure Package and the Prospectus,
the documents incorporated by reference therein and related matters were
discussed. We have also reviewed and relied upon certain corporate records and
documents of the Company, letters from counsel and accountants, and oral and
written statements and certificates of officers and other representatives of the
Company and others as to the existence and consequences of certain factual and
other matters.

 

The purpose of our professional engagement was not to establish or confirm
factual matters or financial or quantitative information. Therefore, we are not
passing upon and do not assume any responsibility for the accuracy, completeness
or fairness of the statements or information contained or incorporated by
reference in the Registration Statement, the General Disclosure Package or the
Prospectus and have not made, or undertaken any obligation to make, an
independent check or verification thereof. Moreover, many of the determinations
required to be made in the preparation of the Registration Statement, the
General Disclosure Package and the Prospectus involve matters of a non-legal
nature.

 

 

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

 

 

However, subject to the foregoing and based on our participation, review and
reliance described in the second preceding paragraph, (i) we believe the
Registration Statement (as of its most recent effective date), the General
Disclosure Package (as of the Applicable Time), the Prospectus (as of its date),
and any further amendments and supplements thereto (as of their respective
dates), as applicable, made by the Company prior to the date hereof (other than
the financial statements and schedules and other financial and statistical data
derived therefrom, as to which we express no belief) appeared on their face to
be appropriately responsive, and complied as to form, in all material respects
to the requirements of the Securities Act and the applicable rules and
regulations of the Commission thereunder, and (ii) we confirm that we are not
aware of any facts that caused us to believe that (a) the Registration Statement
(other than the financial statements and schedules and other financial and
statistical data derived therefrom, as to which we express no belief), as of its
most recent effective date and as of the date hereof, contained or contains any
untrue statement of a material fact or omitted or omits to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading, (b) the General Disclosure Package (other than the financial
statements and schedules and other financial and statistical data derived
therefrom, as to which we express no belief), as of the Applicable Time,
contained any untrue statement of a material fact or omitted to state any
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading; or (c) the
Prospectus (other than the financial statements and schedules and other
financial and statistical data derived therefrom, as to which we express no
belief), as of its date and as of the date hereof, contained or contains any
untrue statement of a material fact or omitted or omits to state any material
fact necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading. We do not express any belief with
respect to the assessments of or reports on the effectiveness of internal
control over financial reporting contained in the Registration Statement, the
General Disclosure Package or the Prospectus.

 

In addition, we supplementally inform you that, to our knowledge, there is no
action, suit or proceeding by or before any court or other governmental agency,
authority or body or any arbitrator pending or overtly threatened against the
Company or any Subsidiary or any of their respective properties by a third party
of a character required by the Securities Act and the rules and regulations
thereunder to be disclosed in the Registration Statement, the General Disclosure
Package or the Prospectus that is not so disclosed.

 

 

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

 

 

EXHIBIT A

 

Form of Subscription Agreement

 

 

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

 

 

EXHIBIT B-1

 

Form of Series A Warrant

 

 

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

 

 

EXHIBIT B-2

 

Form of Series B Warrant

 

 

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

 

 

EXHIBIT C

 

 

 

Form of Lock Up Agreement

 

April ●, 2015

 

ROTH Capital Partners, LLC
888 San Clemente Drive
Newport Beach, CA 92660

 

Re:     SPEED COMMERCE, INC. OFFERING

 

Dear Sirs:

 

In order to induce Roth Capital Partners, LLC (“Roth”), to enter in to a certain
placement agent agreement with Speed Commerce, Inc., a Minnesota corporation
(the “Company”), with respect to the public offering of securities of the
company including shares of the Company’s Common Stock, no par value (“Common
Stock”), the undersigned hereby agrees that for a period (the “lock-up period”)
of ninety (90) days following the date of the final prospectus filed by the
Company with the Securities and Exchange Commission in connection with such
offering, the undersigned will not, without the prior written consent of Roth,
directly or indirectly, (i) offer, sell, assign, transfer, pledge, contract to
sell, or otherwise dispose of, any shares of Common Stock or securities
convertible into or exercisable or exchangeable for Common Stock (including,
without limitation, shares of Common Stock or any such securities which may be
deemed to be beneficially owned by the undersigned in accordance with the rules
and regulations promulgated under the Securities Act of 1933, as the same may be
amended or supplemented from time to time (such shares or securities, the
“Beneficially Owned Shares”)), (ii) enter into any swap, hedge or other
agreement or arrangement that transfers in whole or in part, the economic risk
of ownership of any Beneficially Owned Shares, Common Stock or securities
convertible into or exercisable or exchangeable for Common Stock, or (iii)
engage in any short selling of any Beneficially Owned Shares, Common Stock or
securities convertible into or exercisable or exchangeable for Common Stock.

 

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

 

Anything contained herein to the contrary notwithstanding, any person to whom
shares of Common Stock, securities convertible into or exercisable or
exchangeable for Common Stock or Beneficially Owned Shares are transferred from
the undersigned shall be bound by the terms of this Agreement.

 

 

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

 

 

In addition, the undersigned hereby waives, from the date hereof until the
expiration of the lock-up period, any and all rights, if any, to request or
demand registration pursuant to the Securities Act of 1933, as amended, of any
shares of Common Stock or securities convertible into or exercisable or
exchangeable for Common Stock that are registered in the name of the undersigned
or that are Beneficially Owned Shares. In order to enable the aforesaid
covenants to be enforced, the undersigned hereby consents to the placing of
legends and/or stop transfer orders with the transfer agent of the Common Stock
with respect to any shares of Common Stock, securities convertible into or
exercisable or exchangeable for Common Stock or Beneficially Owned Shares.

 

 

[Signatory]

 

 

 

 

By:

 

    Name:     Title: