Exhibit 10.2

 

PLACEMENT AGENCY AGREEMENT

 

May 30, 2019

 

ThinkEquity, a division of

Fordham Financial Management, Inc.

17 State Street, 22nd Floor

New York, NY 10004

 

Ladies and Gentlemen:

 

Introductory. This Placement Agency Agreement the (“Agreement”) sets forth the
terms upon which ThinkEquity, a division of Fordham Financial Management, Inc.,
(“ThinkEquity” or the “Placement Agent”) shall be engaged by CTD Holdings, Inc.,
a Florida corporation (the “Company”), to act as the exclusive Placement Agent
in connection with the private placement (hereinafter referred to as the
“Offering”) of securities of the Company, as more fully described below.
Capitalized terms used but not defined in this Agreement shall have the meaning
ascribed to them in the Securities Purchase Agreement (defined below).

 

The Offering will consist of an aggregate of up to 40 million shares (the
“Shares”) of common stock, $.0001 par value per share (the “Common Stock”), of
the Company and 40 million warrants (the “Warrants”), each Warrant entitling the
holder to purchase one share of Common Stock at an exercise price of $0.30 per
share at any time prior to the sixty-sixth month anniversary of issuance (the
“Warrant Shares”). The Shares, the Warrants and the Warrant Shares are
collectively referred to as the “Securities”. The Purchasers shall receive one
Warrant for each Share purchased and the Shares and the Warrants shall be
immediately separable and transferable upon issuance. The terms of the Warrants
are set forth in the form of Warrant attached as Exhibit B attached to the
Securities Purchase Agreement. Each person desiring to purchase Securities in
the Offering will be required to (i) execute and deliver to the Company a fully
completed Securities Purchase Agreement (as defined below); and (ii) transmit
the full amount of the purchase price of the Securities subscribed for, to the
escrow account (the “Escrow Account”), established pursuant to an escrow
agreement (the “Escrow Agreement”) by and among Signature Bank, the escrow agent
for the Offering (the “Escrow Agent”) and the Company, in accordance with the
following instructions set forth in the Escrow Agreement: Signature Bank, as
Escrow Agent for CTD Holdings, Inc., Account No. 1503720538, Signature Bank, 261
Madison Avenue, New York, NY 10016, ABA No. 026013576.

 

The Securities will be offered and sold to the Investors (as defined below) in
the Offering pursuant to the exemption from the registration requirements of the
Securities Act of 1933, as amended, and the rules and regulations of the
Securities and Exchange Commission (the “Commission”) thereunder (collectively,
the “Securities Act”), in reliance upon Section 4(a)(2) of the Securities Act
and Rule 506(b) of Regulation D promulgated by the Commission under the
Securities Act (“Regulation D”).

 

 

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

 

 

The term of the Placement Agent’s exclusive engagement will be until the earlier
of (i) June 30, 2019 and (ii) the completion and consummation of the Offering
(the “Offering Period”); provided, however, that a party hereto may terminate
the engagement with respect to itself at any time upon ten (10) day’s prior
written notice to the other parties. The date on which the termination notice
referenced in the prior sentence takes effect, shall be referred to as the
“Termination Date.” Notwithstanding anything to the contrary contained herein,
the provisions concerning indemnification and contribution contained herein and
the Company’s obligations contained in the indemnification provisions will
survive any expiration or termination of this Agreement, and the Company’s
obligation to pay fees actually earned and payable and to reimburse expenses
actually incurred and reimbursable pursuant to Section 1 hereof and which are
permitted to be reimbursed under Rule 5110(f)(2)(D) of the Financial Industry
Regulatory Authority (“FINRA”), will survive any expiration or termination of
this Agreement. The Company may hold a closing at any time after the conditions
to closing have been satisfied or, where legally permissible, waived (the
“Closing”). Nothing in this Agreement shall be construed to limit the ability of
the Placement Agent or its Affiliates to pursue, investigate, analyze, invest
in, or engage in investment banking, financial advisory or any other business
relationship with Persons (as defined below) other than the Company. As used
herein (i) “Person” means an individual or corporation, partnership, trust,
incorporated or unincorporated association, joint venture, limited liability
company, joint stock company, government (or an agency or subdivision thereof)
or other entity of any kind and (ii) “Affiliate” means any Person that, directly
or indirectly through one or more intermediaries, controls or is controlled by
or is under common control with a Person as such terms are used in and construed
under Rule 405 under the Act.

 

The Securities shall be sold to the investors (the “Investors”) named in the
securities purchase agreement, dated as of the date hereof, to be entered into
by the Company and the Investors on the date hereof (the “Securities Purchase
Agreement”), pursuant to the terms and subject to the conditions contained in
the Securities Purchase Agreement on the Closing Date. As used in this
Agreement, the term “Offering Documents” means, collectively, this Agreement,
the Placement Agent Warrants (as defined below), the Securities Purchase
Agreement, the Escrow Agreement, the Shares, the Warrants and each of the other
agreements and instruments entered into or delivered in connection with the
transactions contemplated hereby and thereby, as may be amended from time to
time.

 

The Company hereby confirms its agreement with the Placement Agent as follows:

 

Section 1.         Agreement to Act as Placement Agent; Placement Agent
Compensation.

 

(a)     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 between the Company and the Placement Agent, the Placement Agent is
appointed as the Company’s exclusive placement agent during the Offering Period.
On the basis of such representations and warranties and subject to such terms
and conditions, the Placement Agent hereby accepts such appointment and agrees
to perform the services hereunder diligently and in good faith and in a
professional and businesslike manner and to use its commercially reasonable
efforts to assist the Company in finding subscribers of the Securities who
qualify as “accredited investors,” as such term is defined in Rule 501 of
Regulation D, and to complete the Offering. The Placement Agent has no
obligation to purchase any of the Securities. Unless sooner terminated in
accordance with this Agreement, the engagement of the Placement Agent hereunder
shall continue until the later of the Termination Date or the Closing. The
Offering will be made on a “best efforts” basis.

 

2

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

 

 

(b)      As compensation for services rendered, on the Closing Date, the Company
shall (i) pay to the Placement Agent a cash fee (the “Cash Fee”) equal to 8% of
the aggregate purchase price paid by the Investors in respect of the Securities
at the Closing, other than Investors who are existing directors or officers of,
or investors in, the Company, or their respective Affiliates (the “Excluded
Investors”), (iii) issue to the Placement Agent or its designees Common Stock
purchase warrants to purchase an aggregate number of shares of Common Stock (the
“Placement Agent Warrant Shares”) equal to 6% of the Shares sold to Investors
other than Excluded Investors, on the same terms, including exercise price and
registration rights, as the warrants issued to the Investors in the Offering
(the “Placement Agent Warrants”) in exchange for the payment of $100 at the
closing, which may be deducted from amounts otherwise due Placement Agent. The
Company also agrees to reimburse the Placement Agent for all reasonable travel
and other out-of-pocket expenses incurred in connection with the Placement
Agent’s engagement, including reasonable fees and expenses of the Placement
Agent’s legal counsel. Such reimbursement shall be limited to i) a total of up
to $50,000, in the event the Offering is not completed for any reason, including
the reasonable fees and expenses of the Placement Agent’s counsel not to exceed
$40,000 and the cost of background check reports on the Company’s officers and
directors in an amount not to exceed $10,000 in the aggregate, and ii) a total
of up to $100,000, if the Offering is consummated, including the reasonable fees
and expenses of the Placement Agent’s counsel not to exceed $75,000 and the cost
of background check reports on the Company’s officers and directors in an amount
not to exceed $10,000 in the aggregate, without prior written approval by the
Company, and shall be paid net of amounts previously advanced to Placement Agent
(including $15,000 received by Placement Agent in connection with the execution
of the Engagement Letter, dated March 19, 2019) at the earlier of the Closing
from the gross proceeds of the Securities sold in the Offering or upon
termination of this Agreement (provided, however, that such expense cap in no
way limits or impairs the indemnification and contribution provisions of this
Agreement) (the “Expense Reimbursement,” and together with the Cash Fee, the
“Placement Agent’s Fee”). The Placement Agent shall be entitled to the Placement
Agent’s Fee and Placement Agent Warrants with respect to any public or private
offering or other financing or capital-raising transaction for Common Stock of
the Company or securities convertible into or exercisable for Common Stock of
the Company (the “Tail Financing”) to the extent that such financing or capital
is provided to the Company by investors whom Placement Agent introduces,
directly or indirectly, to the Company during the Offering Period in connection
with the Offering and with which at least one in-person meeting or telephone
call with the Company has been held or scheduled, if such Tail Financing is
consummated at any time within twelve (12) months following the earlier of the
Termination Date or the Closing Date. On the earlier of the Termination Date or
the Closing Date, the Placement Agent shall promptly send to the Company a list
of investors it has contacted in connection with the Offering. The Placement
Agent Warrants and the Placement Agent Warrant Shares are collectively referred
to herein as the “Placement Agent Securities.”

 

(c)     The Company hereby acknowledges that (i) the Offering, including the
determination of the offering price of the Securities and the exercise price of
the Warrants and any related discounts, commissions and fees, shall be an
arm’s-length commercial transaction between the Company and the Investors, (ii)
the Placement Agent will be acting as an independent contractor and will not be
the agent or fiduciary of the Company or its shareholders, creditors, employees,
the Investors or any other party, (iii) the Placement Agent shall not assume an
advisory or fiduciary responsibility in favor of the Company (irrespective of
whether the Placement Agent has advised or is currently advising the Company on
other matters) and the Placement Agent shall not have any obligation to the
Company with respect to the Offering, except as may be set forth expressly
herein, (iv) the Placement Agent and its Affiliates may be engaged in a broad
range of transactions that involve interests that differ from those of the
Company and (v) the Placement Agent will not provide any legal, accounting,
regulatory or tax advice with respect to the Offering, and the Company shall
consult its own legal, accounting, regulatory and tax advisors to the extent it
deems appropriate.

 

3

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

 

 

(d)     The Company is and will be solely responsible for the contents of any
and all written or oral communications provided to the Investors regarding the
Offering or the Securities; and the Company recognizes that the Placement Agent,
in acting pursuant to this Agreement, will be using information provided by the
Company and its agents and representatives and the Placement Agent assumes no
responsibility for, and may rely, without independent verification, on the
accuracy and completeness of any such information.

 

(e)     The Company agrees that any information or advice rendered by the
Placement Agent or any of its representatives in connection with this engagement
is for the confidential use of the Board of Directors of the Company (the
“Board”) only and the Company will not, and will not permit any third party to,
disclose or otherwise refer to such advice or information, or to the Placement
Agent, in any manner without the Placement Agent’s prior written consent.

 

Section 2.        Representations, Warranties and Agreements of the Company.

 

The Company hereby represents, warrants and covenants to the Placement Agent as
of the date hereof, and as of the date of the Closing, as follows:

 

(a)     Compliance with Applicable Regulations. The Offering Documents have been
prepared by the Company in conformity with all applicable laws and in compliance
with Section 4(a)(2) of the Securities Act and Rule 506(b) of Regulation D and
the requirements of all other rules and regulations of the Commission relating
to offerings of the type contemplated by the Offering and the applicable
securities laws and the rules and regulations of those jurisdictions wherein the
Placement Agent notifies the Company that the Securities are to be offered and
sold. The Securities will be offered and sold to the Investors in the Offering,
and the Placement Agent Securities (defined below) will be issued to the
Placement Agent in the Offering, in each case pursuant to the exemption from the
registration requirements of the Securities Act in reliance upon Section 4(a)(2)
of the Securities Act and Section 506(b) of Regulation D as a transaction not
involving a public offering and the requirements of any other applicable state
securities or “Blue Sky” laws and the respective rules and regulations
thereunder in those United States jurisdictions in which the Placement Agent
notifies the Company that the Securities are being offered for sale. None of the
Company, its affiliates, or any person acting on its or their behalf (other than
the Placement Agent, its affiliates or any person acting on its behalf, in
respect of which no representation is made) has taken nor will it take any
action that conflicts with the conditions and requirements of, or that would
make unavailable with respect to the Offering, the exemption(s) from
registration available pursuant to Section 4(a)(2) of the Securities Act and
Section 506(b) of Regulation D, or knows of any reason why any such exemption
would be otherwise unavailable to it. None of the Company, its predecessors or
affiliates has been subject to any order, judgment or decree of any court of
competent jurisdiction temporarily, preliminarily or permanently enjoining such
person for failing to comply with Section 503 of Regulation D. The Company has
not, for a period of six months prior to the commencement of the offer and sale
of the Securities sold, offered for sale or solicited any offer to buy any of
its securities in a manner that would cause the exemption from registration set
forth in Rule 506 of Regulation D to become unavailable with respect to the
offer and sale of the Securities pursuant to the Offering Documents and the
issuance of the Placement Agent Securities pursuant to this Agreement and the
Placement Agent Warrants in the United States.

 

4

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

 

 

(b)     No Material Misstatements or Omissions. The SEC Documents (as defined
below) do not and will not contain any untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not misleading.
None of the statements, documents, certificates or other items made, prepared or
supplied by the Company with respect to the Offering and the other transactions
contemplated by the Offering Documents contains an untrue statement of a
material fact or omits to state a material fact necessary to make the statements
contained therein, in light of the circumstances under which they were made, not
misleading. There is no fact which the Company has not disclosed in the SEC
Documents or the Offering Documents and of which the Company is aware that
materially adversely affects or that could reasonably be expected to have a
material adverse effect on the (i) assets, liabilities, results of operations,
condition (financial or otherwise), business or business prospects of the
Company or (ii) ability of the Company to timely perform its obligations under
this Agreement, the Placement Agent Warrants and the other Offering Documents (a
“Material Adverse Effect”).

 

(c)     Offering Materials. The Company has delivered and will deliver to the
Placement Agent copies of its most recent Annual Report on Form 10-K filed with
the SEC and any other SEC Documents filed subsequent to the end of the fiscal
period covered thereby and the Offering Documents (collectively, the “Disclosure
Package”) in such quantities and at such places as the Placement Agent has
reasonably requested or will reasonably request. The Company has not distributed
and will not distribute, prior to the Closing, any materials in connection with
the Offering other than the Disclosure Package.

 

(d)     Incorporation and SEC Filings. The Company has been duly organized and
is validly existing as a corporation in good standing under the laws of the
State of Florida. During the two (2) years prior to the date hereof, the Company
has timely filed all reports, schedules, forms, proxy statements, statements and
other documents required to be filed by it with the SEC pursuant to the
reporting requirements of the 1934 Act (all of the foregoing filed prior to the
date hereof, including without limitation, Current Reports on Form 8-K filed by
the Company with the SEC whether required to be filed or not (but excluding Item
7.01 thereunder), and all exhibits and appendices included therein (other than
Exhibits 99.1 to Form 8-K) and financial statements, notes and schedules thereto
and documents incorporated by reference therein being hereinafter referred to as
the “SEC Documents”). All such SEC Documents, as at their respective filing
dates, complied in all material respects with the requirements of the Exchange
Act. There has been no action instigated or, to our knowledge, threatened or
otherwise commenced by any applicable regulatory body alleging that, the SEC
Documents failed to so comply.

 

5

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

 

 

(e)     Corporate Authority. The Company has all requisite corporate power and
authority to conduct its business as presently conducted and as proposed to be
conducted as described in the Disclosure Package, has all the necessary and
requisite documents and approvals from all state authorities, has all requisite
corporate power and authority to enter into and perform its obligations under
this Agreement, the Placement Agent Warrants and the other Offering Documents,
to issue, sell and deliver the Securities and the Placement Agent Securities,
and to make the representations in this Agreement and the other Offering
Documents accurate and not misleading. Prior to the Closing, this Agreement, the
Placement Agent Warrants and each of the other Offering Documents will have been
duly authorized by all necessary action of the Company. This Agreement has been
duly authorized, executed and delivered and constitutes, and the Placement Agent
Warrants and each of the other Offering Documents, upon due execution and
delivery, will constitute, valid and binding obligations of the Company,
enforceable against the Company in accordance with their respective terms (i)
except as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect
related to laws affecting creditors’ rights generally, including the effect of
statutory and other laws regarding fraudulent conveyances and preferential
transfers, and except that no representation is made herein regarding the
enforceability of the Company’s obligations to provide indemnification and
contribution remedies under the securities laws and (ii) subject to the
limitations imposed by general equitable principles (regardless of whether such
enforceability is considered in a proceeding at law or in equity).

 

(f)     No Conflicts. None of the execution and delivery of or performance by
the Company under this Agreement, the Placement Agent Warrants or any of the
other Offering Documents or the consummation of the transactions herein or
therein contemplated conflicts with or violates, or will result in the creation
or imposition of, any lien, charge or other encumbrance upon any of the assets
of the Company under any agreement or other instrument to which the Company is a
party or by which the Company or its assets may be bound, or any term of the
Certificate of Incorporation or Bylaws of the Company, or any license, permit,
judgment, decree, order, statute, rule or regulation applicable to the Company
or any of its assets, except in the case of a conflict, violation, lien, charge
or other encumbrance (except with respect to the Company’s Certificate of
Incorporation or Bylaws) which would not, or could not reasonably be expected
to, have a Material Adverse Effect.

 

(g)     Consents. The Company is not required to obtain any consent from,
authorization or order of, or make any filing or registration with (other than
(i) a Form D with the SEC and any other filings as may be required by any state
securities agencies, (ii) such as may be required under applicable state
securities or “Blue Sky” laws (collectively, the “Required Filings and
Approvals”)), any court, governmental agency or any regulatory or
self-regulatory agency or any other person in order for it to execute, deliver
or perform any of its obligations under, or contemplated by, this Agreement, the
Placement Agent Warrants or any of the other Offering Documents, in each case,
in accordance with the terms hereof or thereof. All consents, authorizations,
orders, filings and registrations which the Company is required to obtain at or
prior to the Closing shall have been obtained or effected on or prior to the
Closing, and the Company is not aware of any facts or circumstances which might
prevent the Company from obtaining or effecting any of the registration,
application or filings contemplated by this Agreement, the Placement Agent
Warrants or the other Offering Documents.

 

6

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

 

 

(h)     Authorization of the Placement Agent Securities. The Placement Agent
Warrants have been duly authorized for issuance and, when issued and delivered
by the Company pursuant to the terms of this Agreement, will be validly issued.
The Placement Agent Warrant Shares (defined herein) have been duly authorized
for issuance and sale and, when issued and delivered by the Company against
payment therefor pursuant to the terms of the Placement Agent Warrants, will be
validly issued, fully paid and nonassessable. No holder of any Placement Agent
Securities will be subject to personal liability solely by reason of being such
a holder, and none of the Placement Agent Securities will be subject to any
preemptive rights, rights of first refusal or other similar rights to subscribe
for or purchase securities of any shareholder or security holder of the Company
or an adjustment under the antidilution or exercise rights of any holders of any
outstanding shares of capital stock, options, warrants or other rights to
acquire any securities of the Company. As of the Closing, the Company shall have
reserved from its duly authorized but unissued shares of Common Stock not less
than the maximum number of Placement Agent Warrant Shares issuable pursuant to
the terms of the Placement Agent Warrants.

 

(i)     Litigation. Except as set forth in the Securities Purchase Agreement,
there is no action, suit, claim, proceeding, hearing, inquiry or investigation
before or by any court, public board, government agency, self-regulatory
organization or body pending or, to the knowledge of the Company, threatened
against or affecting the Company, any securities of the Company or any of the
Company’s officers or directors (in their capacity as such) which is outside of
the ordinary course of business or individually or in the aggregate material to
the Company or, if determined adversely to the Company or such officer or
director, could reasonably be expected to adversely affect the Offering or the
enforceability of this Agreement, the Placement Agent Warrants or the other
Offering Documents.

 

(j)     Brokers. Except for the Placement Agent, there is no broker, finder or
other party that is entitled to receive from the Company any brokerage or
finder’s fee or other fee or commission as a result of the Offering.

 

(k)     No Registration Required Under the Securities Act. Assuming the accuracy
of the representations and warranties of the Investors contained in the
Securities Purchase Agreement and the compliance of such parties with the
agreements set forth therein, it is not necessary, in connection with the
issuance and sale of the Securities under the Offering Documents, the issuance
of the Placement Agent Warrants under this Agreement or the issuance and sale of
the Placement Agent Warrant Shares under the Placement Agent Warrants, to
register the Securities or the Placement Agent Securities under the Securities
Act or any state securities or “Blue Sky” laws.

 

7

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

 

 

(l)       No Transfer Taxes or Other Fees. There are no transfer taxes or other
similar fees or charges under United States law or the laws of any state or any
political subdivision thereof, required to be paid in connection with the
execution and delivery of this Agreement and the other Offering Documents or the
issuance and sale by the Company of the Securities and the Placement Agent
Securities.

 

(m)     No General Solicitation. Neither the Company nor any of its affiliates
have engaged, and will engage, directly or indirectly in any form of “general
solicitation” or “general advertising” in connection with the offering of the
Securities or Placement Agent Securities (as those terms are used in Regulation
D) under the Securities Act or in any manner involving a public offering within
the meaning of Section 4(a)(2) of the Securities Act; and the Company has not
entered, and will not enter, into any arrangement or agreement with respect to
the distribution of the Securities, except for the Offering Documents, or the
Placement Agent Securities, except for this Agreement and the Placement Agent
Warrants.

 

(n)     No Integration. Neither the Company nor any of its affiliates has
directly or indirectly sold, offered for sale, solicited offers to buy or
otherwise negotiated in respect of any “security” (as defined in the Securities
Act) that is, or would be, integrated with the sale of any of the Securities or
Placement Agent Securities in a manner that would require the registration under
the Securities Act of any of the Securities or Placement Agent Securities.

 

(o)     Patriot Act Compliance. Neither the issuance and sale of the Securities
or the Placement Agent Securities by the Company nor the Company’s use of the
proceeds thereof will violate the Trading with the Enemy Act, as amended, or any
of the foreign assets control regulations of the United States Treasury
Department (31 CFR, Subtitle B, Chapter V, as amended) or any enabling
legislation or executive order relating thereto. The Company is in compliance,
in all material respects, with the USA Patriot Act of 2001 (signed into law
October 26, 2001).

 

(p)     No Third Parties. The Company represents to the Placement Agent that the
Company has not engaged and is not working with any third party finder in
connection with the Offering or the introduction of the Company to the Placement
Agent and the Company agrees not to engage, work with or pay fees to any third
party finder in connection with the Offering or the introduction of the Company
to the Placement Agent. The Company represents and warrants to the Placement
Agent that the entry into this Agreement or any other action of the Company in
connection with the Offering will not violate any agreement between the Company
and any other broker-dealer.

 

(q)     No Disqualification Events. Neither the Company nor any Company Related
Persons (as defined below) are subject to any of the disqualifications set forth
in Rule 506(d) of Regulation D (each, a “Disqualification Event”). The Company
has exercised reasonable care to determine whether any Company Related Person is
subject to a Disqualification Event. The Disclosure Package contains a true and
complete description of the matters required to be disclosed with respect to the
Company and the Company Related Persons pursuant to the disclosure requirements
of Rule 506(e) of Regulation D, to the extent applicable. As used herein,
“Company Related Persons” means any predecessor of the Company, any affiliated
issuer, any director, executive officer, other officer of the Company
participating in the Offering, any general partner or managing member of the
Company, any beneficial owner of 20% or more of the Company’s outstanding voting
equity securities, calculated on the basis of voting power, and any “promoter”
(as defined in Rule 405 under the Securities Act) connected with the Company in
any capacity. The Company will promptly notify the Placement Agent in writing of
(1) any Disqualification Event relating to any Company Related Person and (2)
any event that would, with the passage of time, become a Disqualification Event
relating to any Company Related Person.

 

8

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

 

 

(r)     Certificates. Any certificate signed by an officer of the Company and
delivered to the Placement Agent in connection herewith or in connection with
any Offering shall be deemed to be a representation and warranty by the Company
to the Placement Agent as to the matters set forth therein.

 

(s)     Disclosure. No representation or warranty contained in Section 2 of this
Agreement contains any untrue statement of a material fact or omits to state a
material fact necessary to make the statements herein not misleading in the
context of such representations and warranties.

 

In addition, for the benefit of the Placement Agent, each of the representations
and warranties (together with any related disclosure schedules thereto) made by
the Company to the Investors in the Transaction Documents, is hereby
incorporated in this Section 2 by reference as though fully restated herein, and
each is hereby made to, and in favor of, the Placement Agent.

 

Section 3.         Representations, Warranties and Agreements of Placement
Agent.

 

Placement Agent hereby represents, warrants and covenants to the Company as of
the date hereof, and as of the date of the Closing, as follows:

 

(a)     Authority. This Agreement has been duly authorized, executed and
delivered by the Placement Agent, and upon due execution and delivery by the
Company, this Agreement will be a valid and binding agreement of the Placement
Agent enforceable against it in accordance with its terms, except as may be
limited by principles of public policy and, as to enforceability, subject to
applicable bankruptcy, insolvency, reorganization, moratorium and similar laws
relating to or affecting creditor’s rights from time to time in effect and
subject to general equity principles.

 

(b)     No Conflict. None of the execution or delivery of or performance by the
Placement Agent under this Agreement or any other agreement or document entered
into by the Placement Agent in connection herewith or the consummation of the
transactions herein or therein contemplated conflicts with or violates, any
agreement or other instrument to which the Placement Agent is a party or by
which its assets may be bound, or its limited liability company agreement, or
any license, permit, judgment, decree, order, statute, rule or regulation
applicable to the Placement Agent or any of its assets, except in each case as
would not have a material adverse effect on the transactions contemplated
hereby.

 

9

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

 

 

(c)     Compliance with FINRA; Regulation D. The Placement Agent is a member in
good standing of FINRA and is registered as a broker-dealer under the Securities
Act and the Securities Exchange Act of 1934, as amended, and the rules and
regulations of the Commission thereunder (the “Exchange Act”), and under the
securities acts of each state into which it is making offers or sales of the
Units. The Placement Agent is in compliance with all applicable rules and
regulations of the Commission and FINRA, except to the extent that such
noncompliance would not have a material adverse effect on the transactions
contemplated hereby. None of the Placement Agent or its affiliates, or any
person acting on behalf of the foregoing (other than the Company or its
affiliates or any person acting on its or their behalf, in respect of which no
representation is made) has taken nor will take any action that conflicts with
the conditions and requirements of, or that would make unavailable with respect
to the Offering, the exemption(s) from registration available pursuant to Rule
506(b) of Regulation D or Section 4(a)(2) of the Securities Act, or knows of any
reason why any such exemption would be otherwise unavailable to it.

 

(d)     No Disqualification Event. Neither the Placement Agent nor any of the
Placement Agent’s Related Persons (as defined below) are subject to any
Disqualification Event as of the date hereof. The Placement Agent has exercised
reasonable care to determine whether any Placement Agent Related Person is
subject to such a Disqualification Event. As used herein, “Placement Agent
Related Persons” means any predecessor of the relevant Placement Agent, any
affiliated issuer, any director, executive officer, other officer of the
Placement Agent participating in the Offering, any general partner or managing
member of the Placement Agent, any beneficial owner of 20% or more of the
Placement Agent’s outstanding voting equity securities, calculated on the basis
of voting power, and any “promoter” (as defined in Rule 405 under the Securities
Act) connected with the Placement Agent in any capacity. The Placement Agent
agrees to promptly notify the Company in writing of (1) any Disqualification
Event relating to any Placement Agent Related Person and (2) any event that
would, with the passage of time, become a Disqualification Event relating to any
Placement Agent Related Person.

 

Section 4.        Future Transactions.

 

If within the 12-month period following consummation of the Offering resulting
in gross proceeds of no less than $5 million, the Company or any of its
Subsidiaries or Affiliates (i) decides to raise funds by means of a public
offering or a private placement of equity or debt securities using an
underwriter or placement agent, Placement Agent (or any affiliate designated by
it) shall have the right to act as sole book-runner and/or sole placement agent,
at Placement Agent’s sole discretion, for such financing; or (ii) decides to
enter into a business combination transaction with any party, whether by way of
merger, acquisition, stock or asset sale, recapitalization or other transaction,
and the Company determines to seek an opinion with respect to the fairness to
the stockholders of the Company of the consideration paid or received in any
such proposed transaction, Placement Agent (or any affiliate designated by it)
shall have the right to render the fairness opinion (each case a “Subject
Transaction” and the “Right of First Refusal”). If Placement Agent or one of its
Affiliates decides to accept any such engagement, the agreement governing such
engagement will contain, among other things, provisions for fees customary for
transactions of similar size and nature and the provisions of this Agreement,
including indemnification, which are appropriate to such a transaction.
Placement Agent shall have the sole right to determine whether or not any other
broker-dealer shall have the right to participate in any such offering and the
economic terms of any such participation. The Company shall notify Placement
Agent of its intention to pursue a Subject Transaction, including the material
terms thereof, by providing written notice thereof to Placement Agent.  If
Placement Agent fails to exercise its Right of First Refusal with respect to any
Subject Transaction within ten (10) Business Days after the mailing of such
written notice, then the Placement Agent shall have no further claim or right
with respect to the Subject Transaction. Placement Agent may elect, in its sole
and absolute discretion, not to exercise its Right of First Refusal with respect
to any Subject Transaction; provided that any such election shall not adversely
affect the Right of First Refusal with respect to any other Subject Transaction
during the twelve (12) month period agreed to above.

 

10

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

 

 

Section 5.        Offering and Closing Procedures

 

(a)     The Company shall cause to be delivered to the Placement Agent copies of
the Offering Documents and has consented, and hereby consents, to the use of
such copies for the purposes permitted by the Securities Act and applicable
securities laws and in accordance with the terms and conditions of this
Agreement, and hereby authorizes the Placement Agent and its agents and
employees to use the Offering Documents in connection with the offering of the
Securities until the earlier of (i) the Termination Date or (ii) the Closing,
and no person or entity is or will be authorized to give any information or make
any representations other than those contained in the Disclosure Package and the
Offering Documents or to use any offering materials other than those contained
in the Disclosure Package in connection with the issuance and sale of the
Securities and the Placement Agent Securities, unless the Company first provides
the Placement Agent with notification of such information, representations or
offering materials.

 

(b)     The Company shall make available to the Placement Agent and its
representatives such information, including, but not limited to, financial
information, and other information regarding the Company (the “Information”), as
may be reasonably requested in making a reasonable investigation of the Company
and its affairs. The Company shall provide access to the officers, directors,
employees, independent accountants, legal counsel and other advisors and
consultants of the Company as shall be reasonably requested by the Placement
Agent. The Company recognizes and agrees that the Placement Agent (i) will use
and rely primarily on the Information and generally available information from
recognized public sources in performing the services contemplated by this
Agreement without independently verifying the Information or such other
information, (ii) does not assume responsibility for the accuracy of the
Information or such other information, and (iii) will not make an appraisal of
any assets or liabilities owned or controlled by the Company or its market
competitors.

 

(c)     Each of the Company and the Investors will be required to complete and
execute an original signature page for each of the Transaction Documents to
which it is a party, which will be forwarded or delivered to the Placement Agent
at the Placement Agent’s offices at the address set forth in Section 10 hereof.

 

(d)     If all of the conditions set forth elsewhere in this Agreement and in
the Securities Purchase Agreement are fulfilled or, where legally permissible,
waived by the applicable party, a closing shall be held promptly with respect to
the Securities sold in the Offering (the “Closing”).  Delivery of payment for
the Securities will be made at the Closing against delivery of the Securities
sold by the Company.  Electronic copies of executed certificates for the
Placement Agent Warrants will be made available to the Placement Agent prior to
the Closing.

 

11

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

 

 

Section 6.       Further Covenants of the Company.

 

The Company further covenants to and agrees with the Placement Agent as follows:

 

(a)     Representations and Warranties True and Correct. Except upon prior
written notice to the Placement Agent, the Company shall not, at any time prior
to the Closing, knowingly take any action which would cause any of the
representations and warranties made by it in this Agreement not to be complete
and correct in all material respects on and as of the date of the Closing (the
“Closing Date”) with the same force and effect as if such representations and
warranties had been made on and as of the Closing Date (except to the extent any
such representation or warranty expressly speaks of an earlier date or time, in
which case such representation or warranty shall be true and correct in all
material respects as of such earlier date or time, as applicable).

 

(b)     Blue Sky Compliance. The Company will cooperate with the Placement Agent
and the Investors in endeavoring to qualify the Securities and the Placement
Agent Securities for sale under the securities or “Blue Sky” laws of such
jurisdictions (United States and foreign) as the Placement Agent and the
Investors may reasonably request and will make such applications, file such
documents, and furnish such information as may be reasonably required for that
purpose, provided the Company shall not be required to qualify as a foreign
corporation or to file a general consent to service of process in any
jurisdiction where it is not now so qualified or required to file such a
consent. The Company will, from time to time, prepare and file such statements,
reports and other documents as are or may be required to continue such
qualifications in effect for so long a period as the Placement Agent may
reasonably request with respect to the Offering. All such filings under
applicable state securities or “Blue Sky” laws related to this Offering shall be
prepared by the Company’s counsel at the Company’s expense, with copies of all
filings to be promptly forwarded to the Placement Agent and its counsel. The
Company shall comply with the Securities Act, all applicable state securities or
“Blue Sky” laws and the rules and regulations thereunder in the states in which
the Placement Agent may reasonably request with respect to the Offering so as to
permit the continuance of the sales of the Securities and the Placement Agent
Securities, and will file or cause to be filed with the Commission no later than
15 days after the commencement of the sale of Securities, and shall promptly
thereafter forward or cause to be forwarded to the Placement Agent, any and all
Notice of Sales of Securities on Form D and shall file all amendments thereto
with the Commission as may be required. Copies of all Form D and all amendments
thereto shall be provided to the Placement Agent.

 

12

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

 

 

(c)     Amendments and Supplements to the Disclosure Package. If, at any time
prior to the Closing, any event shall occur or condition exist as a result of
which it is necessary to amend or supplement the information or documents, or
other information in the Disclosure Package in order to make the statements
therein, in the light of the circumstances when the Disclosure Package is
delivered to an Investor, not misleading, or if it is otherwise necessary to
amend or supplement any portion of the Disclosure Package to comply with the
Securities Act or any other applicable law, the Company agrees to promptly
prepare and furnish at its own expense to the Placement Agent, amendments or
supplements to the Disclosure Package so that the statements therein as so
amended or supplemented will not, in the light of the circumstances when the
Disclosure Package is delivered to an Investor, be misleading or so that the
Disclosure Package, as amended or supplemented, will comply with the Securities
Act and other applicable law. Neither the Placement Agent’s consent to, nor
delivery of, any such amendment or supplement shall constitute a waiver of any
of the Company’s obligations under this Section 6(c). The Company agrees to
furnish the Placement Agent and counsel to the Placement Agent, without charge,
as soon as available, as many copies of any amendments and supplements to the
Disclosure Package as the Placement Agent or its counsel may request. The
Company shall not at any time before the Closing prepare or use any amendment or
supplement to the Disclosure Package of which the Placement Agent will not
previously have been advised and furnished with a copy, or which is not in
compliance with the Securities Act and other applicable law. As soon as the
Company is advised thereof, the Company shall advise the Placement Agent and its
counsel, and confirm the advice in writing, of any order preventing or
suspending the use of the Disclosure Package, or the suspension of or exemption
for such qualification or registration thereof for offering in any jurisdiction,
or of the institution or threatened institution of any proceedings for any of
such purposes, and the Company will use its reasonable best efforts to prevent
the issuance of any such order and, if issued, to obtain as soon as reasonably
possible the lifting thereof.

 

(d)     Marketing. The Company shall participate, and cause its officers and
representatives to participate, in the Offering as reasonably requested by the
Placement Agent, including in the marketing of the Securities and meeting with
prospective Investors, and afford prospective Investors the opportunity to
conduct customary due diligence and make inquiries relevant to their investment
decisions regarding the Securities.

 

(e)     Use of Proceeds. The Company shall apply the net proceeds from the sale
of the Securities sold by it in the manner to be described under the caption
“Use of Proceeds” in the Offering Documents. The Company shall not use any of
the net proceeds of the Offering to repay indebtedness to officers, directors or
shareholders of the Company without the prior written consent of the Placement
Agent.

 

(f)     Legends. The Company shall place a legend on the certificates
representing the Placement Agent Warrants and, upon conversion or exercise, as
applicable, on certificates representing the Warrant Shares and the Placement
Agent Warrant Shares, that the securities evidenced thereby have not been
registered under the Securities Act or applicable state securities or “Blue Sky”
laws, setting forth or referring to the applicable restrictions on
transferability and sale of such securities under the Securities Act and
applicable state securities or “Blue Sky” laws.

 

(g)     No Requirement to Register as an Investment Company. The Company shall
not invest, or otherwise use the proceeds received by the Company from its sale
of the Securities in such a manner as would require the Company to register as
an investment company under the Investment Company Act.

 

13

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

 

 

(h)     Press Releases. Prior to the earlier of the Closing or the Termination
Date, the Company shall not issue any press release or other communication
directly or indirectly or hold any press conference with respect to the Company,
its condition, financial or otherwise, or earnings, business affairs or business
prospects, without the prior written consent of the Placement Agent. The Company
shall afford the Placement Agent and its counsel with the opportunity to review
and comment upon the form and substance of, and shall give reasonable
consideration to all such comments from the Placement Agent and its counsel on,
any press release, Commission filing or any other public disclosure by or on
behalf of the Company relating to the Offering, the Securities, the Investor,
the Placement Agent or any aspect of the Offering Documents or the transactions
contemplated thereby, not less than 24 hours prior to the issuance, filing or
public disclosure thereof. The Placement Agent must be provided with a final
version of any such press release, Commission filing or other public disclosure
at least 24 hours prior to any release, filing or use by the Company thereof.
The Company agrees and acknowledges that its failure to fully comply with this
provision constitutes a Material Adverse Effect.

 

(i)     Compliance with Rule 502(d). The Company will exercise reasonable care
to assure that no Investor is an “underwriter” within the meaning of Section
2(a)(11) of the Securities Act and, without limiting the foregoing, that such
purchases will comply with Rule 502(d) under the Securities Act.

 

(j)     Conduct of Business. The Company shall not, without the prior written
consent of the Placement Agent, at any time prior to the earlier of the Closing
or the Termination Date, except as contemplated by the Disclosure Package, (i)
engage in or commit to engage in any transaction outside the ordinary course of
business as described in the Disclosure Package, (ii) issue, agree to issue or
set aside for issuance any securities (debt or equity) or any rights to acquire
any such securities, (iii) incur, outside the ordinary course of business, any
material indebtedness or obligation, direct or contingent, (iv) dispose of any
material assets, (v) make any material acquisition, or (vi) change its business
or operations.

 

(k)     No Stabilization or Manipulation. Neither the Company nor any of its
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.

 

(l)     Additional Documents. In addition to the Offering Documents, the Company
will execute and deliver any other customary agreements, documents, certificates
and instruments as the Placement Agent or the Investors deem necessary or
appropriate to consummate the Offering, all of which will be in form and
substance reasonably acceptable to the Placement Agent and the Investor. The
Company agrees that the Placement Agent may rely upon, and is a third party
beneficiary of, the representation and warranties (together with any related
disclosure schedules thereto) and applicable covenants set forth in the
Transaction Documents to be executed and delivered by the Company at the Closing
and any other agreements, documents, legal opinions, certificates and
instruments executed and delivered by the Company or otherwise in connection
with the Offering.

 

14

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

 

 

Section 7.        Conditions to the Obligations of the Placement Agent.

 

The obligation of the Placement Agent hereunder shall be subject to the accuracy
of the representations and warranties on the part of the Company set forth in
Section 2 as of the date hereof and as of the Closing Date as though then made,
to the timely performance by the Company of its covenants and other obligations
hereunder on and as of such dates, and to the satisfaction or, where legally
permissible, the waiver, of each of the following additional conditions:

 

(a)     Corporate Proceedings. All corporate proceedings and other legal matters
incident to the authorization, form and validity of the Offering Documents, the
Securities, the Placement Agent Securities and all other legal matters relating
to the offering, issuance and sale, as applicable, of the Securities and the
Placement Agent Securities and the other transactions contemplated hereby and
under the Offering Documents shall be reasonably satisfactory in all material
respects to the Placement Agent; and the Company shall have furnished to the
counsel to the Placement Agent, all documents and information that it may
reasonably request to enable them to pass upon such matters, including a
Secretary’s Certificate, if requested.

 

(b)     Consents and Approvals. On or prior to the Closing Date, the Company
shall have obtained all consents, waivers and approvals required to be obtained
by the Company in connection with the consummation of the transactions
contemplated hereby.

 

(c)     Disclosure Package. The Disclosure Package did not, does not and, as of
the date of any amendment or supplement thereto, will not, include any untrue
statement of a material fact or omit to state any material fact necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading. No order enjoining the Offering or the issuance
and sale of the Securities and the Placement Agent Securities shall have been
issued, and no proceedings for that purpose or a similar purpose shall have been
initiated or pending, or, to the Company’s knowledge, threatened.

 

(d)     No Material Adverse Effect. Subsequent to the execution and delivery of
this Agreement and as of the Closing Date, there shall not have occurred any
change, event or development resulting or that could reasonably be expected to
result in a Material Adverse Effect, which, in the Placement Agent’s sole
judgment, makes it impracticable or inadvisable to proceed with the Offering.

 

(e)     Offering Documents. Each of the Offering Documents shall be in form and
substance reasonably satisfactory to the Placement Agent and shall have been
duly executed and delivered by the Company and the other parties thereto, and
the Securities shall have been duly issued, executed (as applicable) and
delivered by the Company.

 

(f)     Placement Agent Compensation. The Placement Agent’s Fee calculated in
the manner provided in Section 1(b) of this Agreement shall have been paid to
the Placement Agent by wire transfer of immediately available funds to an
account specified by the Placement Agent to the Company prior to the Closing.

 

15

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

 

 

(g)     Additional Documents. On or before the Closing Date, the Placement Agent
and counsel for the Placement Agent shall have received such information and
documents as they may reasonably require for the purposes of enabling them to
pass upon the issuance and sale of the Securities and the Placement Agent
Securities as contemplated herein, or in order to evidence the accuracy of any
of the representations and warranties, or the satisfaction of any of the
conditions or agreements, herein contained.

 

If any condition specified in this Section 7 is not satisfied when and as
required to be satisfied, this Agreement may be terminated by the Placement
Agent by notice to the Company at any time on or prior to the Closing Date,
which termination shall be without liability on the part of any party to any
other party, except that Section 1(b), Section 2, Section 8 and Section 9 shall
at all times be effective and shall survive such termination.

 

Section 8.          Indemnification and Contribution.

 

(a)     Indemnification of the Placement Agent. In consideration of the
Placement Agent’s execution and delivery of, and the performance of its
obligations under, this Agreement, and in addition to all of the Company’s other
obligations under the Offering Documents, the Company shall defend, indemnify
and hold harmless Placement Agent, each of its Affiliates, each Person, if any,
who controls Placement Agent or any of its Affiliates within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act, and each of its and its
directors, officers, partners, members, shareholders, direct or indirect
investors, employees, representatives and agents (including, without limitation,
those attorneys and other agents retained by Placement Agent or any such other
Person in connection with the transactions contemplated by this Agreement and
the other Offering Documents) (collectively, the “Placement Agent Indemnified
Parties,” and each a “Placement Agent Indemnified Party”), from and against any
and all claims, actions, causes of action, suits, proceedings (including,
without limitation, as a party in interest or otherwise in any action or
proceeding for injunctive or other equitable relief), including, without
limitation, any and all derivative actions brought on behalf of the Company or
any Subsidiary, and any and all civil, criminal or regulatory investigations,
whether formal or informal, to which any Placement Agent Indemnified Party may
become subject (irrespective of whether any such Placement Agent Indemnified
Party is a party, threatened to be made a party, or a witness to the claim,
action, cause of action, suit, proceeding or investigation for which
indemnification hereunder is sought), and all damages, losses, liabilities and
expenses (including the reasonable fees and expenses of counsel) incurred by any
Placement Agent Indemnified Party (including, without limitation, in settlement
of any claim, action, cause of action, suit, proceeding or investigation), in
each case as incurred (collectively, a “Claim”), as a result of, or arising out
of, or relating to (i) any misrepresentation, inaccuracy or breach of any
representation or warranty made by the Company or any Subsidiary in this
Agreement or in any of the other Offering Documents, (ii) any breach of any
covenant, agreement or obligation of the Company or any Subsidiary contained in
this Agreement or in any of the other Offering Documents, (iii) the execution,
delivery, performance or enforcement of this Agreement or any of the other
Offering Documents, (iv) any transaction financed or to be financed in whole or
in part, directly or indirectly, with the proceeds of the issuance of the
Securities, (v) any untrue statement or alleged untrue statement of a material
fact contained in any SEC Document or in any Offering Document, or any amendment
thereto, or the omission or alleged omission therefrom of 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, (vi)
the status of such Placement Agent Indemnified Party as a holder of any of the
Securities or the Placement Agent Securities, or as a party (or agent or
attorney of such party) to this Agreement or any of the other Offering
Documents, (vii) any act or failure to act by any Placement Agent Indemnified
Party in connection with, or relating in any manner to, the Securities, the
Offering or any of the transactions contemplated by this Agreement or any of the
other Offering Documents, provided that the Company shall not be liable under
this clause (vii) to the extent that a court of competent jurisdiction shall
have determined by a final, non-appealable judgment that such claim, action,
cause of action, suit, proceeding, investigation, damage, loss, liability or
expense resulted from the gross negligence, bad faith or willful misconduct of
such Placement Agent Indemnified Party; and to reimburse such Placement Agent
Indemnified Party for any and all expenses (including the reasonable fees and
disbursements of counsel chosen by such Placement Agent Indemnified Party)
incurred by such Placement Agent Indemnified Party in connection with
investigating, defending, settling, compromising or paying any such claim,
action, cause of action, suit, proceeding, investigation, damage, loss,
liability or expense. To the extent that the foregoing undertaking by the
Company may be unenforceable for any reason, the Company shall make the maximum
contribution to the payment and satisfaction of each of the Indemnified
Liabilities which is permissible under applicable law as provided in Section
8(d).

 

16

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

 

 

(b)     Notifications and Other Indemnification Procedures. Promptly after
receipt by a Placement Agent Indemnified Party under this Section 8 of notice of
the commencement of any action, such Placement Agent Indemnified Party will, if
a claim in respect thereof is to be made against the Company under this Section
8, notify the Company in writing of the commencement thereof, but the omission
so to notify the Company will not relieve it from any liability, which it may
have to any Placement Agent Indemnified Party for contribution to the extent it
is not prejudiced as a proximate result of such failure. In case any such action
is brought against any Placement Agent Indemnified Party and the such Placement
Agent Indemnified Party seeks or intends to seek indemnity from the Company, the
Company will be entitled to participate in, and, by written notice delivered to
such Placement Agent Indemnified Party promptly after receiving the aforesaid
notice from such Placement Agent Indemnified Party, to assume the defense
thereof with counsel reasonably satisfactory to such Placement Agent Indemnified
Party; provided, however, if the defendants in any such action include both the
Placement Agent Indemnified Party and the Company, and the Placement Agent
Indemnified Party shall have reasonably concluded on the advice of its counsel
that a conflict may arise between the positions of the Company and the Placement
Agent Indemnified Party in conducting the defense of any such action or that
there may be legal defenses available to it and/or other Placement Agent
Indemnified Parties which are different from or additional to those available to
the Company, such Placement Agent Indemnified Party or Placement Agent
Indemnified Parties shall have the right to select separate counsel to assume
such legal defenses and to otherwise participate in the defense of such action
on behalf of such Placement Agent Indemnified Party or Placement Agent
Indemnified Parties. Upon receipt of notice from the Company to the Placement
Agent Indemnified Party of the Company’s election so to assume the defense of
such action and approval by such Placement Agent Indemnified Party of counsel,
the Company will not be liable to such Placement Agent Indemnified Party under
this Section 8 for any legal or other expenses subsequently incurred by such
Placement Agent Indemnified Party in connection with the defense thereof unless:
(i) the Placement Agent Indemnified Party shall have employed separate counsel
in accordance with the proviso to the next preceding sentence (it being
understood, however, that the Company shall not be liable for the expenses of
more than one separate counsel (together with local counsel), approved by the
Company), representing the Placement Agent Indemnified Parties who are parties
to such action); (ii) the Company shall not have employed counsel satisfactory
to the Placement Agent Indemnified Party to represent the Placement Agent
Indemnified Party within a reasonable time after notice of commencement of the
action; or (iii) the Company has authorized the employment of counsel for the
Placement Agent Indemnified Party at the expense of the Company, in each of
which cases the fees and expenses of counsel shall be at the expense of the
Company.

 

17

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

 

 

(c)     Settlements. The Company shall not be liable under this Section 8 for
any settlement of any proceeding effected without its written consent, which
consent shall not be unreasonably conditioned, withheld or delayed, but if
settled with such consent or if there be a final judgment for the plaintiff, the
Company agrees to indemnify the applicable Placement Agent Indemnified Party or
Placement Agent Indemnified Parties against any claim, action, cause of action,
suit, proceeding, investigation, damage, loss, liability or expense by reason of
such settlement or judgment. The Company shall not, without the prior written
consent of the Placement Agent Indemnified Party, effect any settlement,
compromise or consent to the entry of judgment in any pending or threatened
action, suit or proceeding in respect of which any Placement Agent Indemnified
Party is or could have been a party and indemnity was or could have been sought
hereunder by such Placement Agent Indemnified Party, unless such settlement,
compromise or consent includes: (i) an unconditional release of such Placement
Agent Indemnified Party from all liability on claims that are the subject matter
of such action, suit or proceeding; 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
Placement Agent Indemnified Party.

 

(d)     Contribution. If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless a Placement Agent Indemnified
Party under Section 8(a) above in respect of any claim, action, cause of action,
suit, proceeding, investigation, damage, loss, liability or expense, then the
Company shall contribute to the aggregate amount paid or payable by such
Placement Agent Indemnified Party in such proportion as is appropriate to
reflect the relative benefits received by the Company, on the one hand, and such
Placement Agent Indemnified Party, on the other, from the Offering. If, however,
the allocation provided by the immediately preceding sentence is not permitted
by applicable law then the Company shall contribute to such amount paid or
payable by such Placement Agent Indemnified Party in such proportion as is
appropriate to reflect not only such relative benefits but also the relative
fault of the Company, on the one hand, and such Placement Agent Indemnified
Party, on the other, in connection with the actions or omissions which resulted
in such losses, claims, damages or liabilities (or actions or proceedings in
respect thereof), as well as any other relevant equitable considerations. The
relative fault shall be determined by reference to, among other things, the
parties’ relative intent, knowledge, access to information and opportunity to
correct or prevent such action or omission.

 

18

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

 

 

The Company and Placement Agent agree that it would not be just and equitable if
contributions pursuant to this Section 8(d) were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to above in this Section 8(d). The amount
paid or payable by a Placement Agent Indemnified Party as a result of the
losses, claims, damages or liabilities (or actions or proceedings in respect
thereof) referred to above in this Section 8(d) shall be deemed to include any
legal or other expenses reasonably incurred by such Placement Agent Indemnified
Party in connection with investigating or defending any such claim, action,
cause of action, suit, proceeding or investigation. Notwithstanding the
provisions of this subsection (d): (i) Placement Agent shall not be required to
contribute any amount in excess of the amount of the Cash Fee actually received
by Placement Agent pursuant to this Agreement; and (ii) no person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation.

 

(e)     Timing of Any Payments of Indemnification. Any losses, claims, damages,
liabilities or expenses for which a Placement Agent Indemnified Party is
entitled to indemnification or contribution under this Section 8 shall be paid
by the Company to the Placement Agent Indemnified Party as such losses, claims,
damages, liabilities or expenses are incurred, but in all cases, no later than
fifteen (15) days of invoice to the Company.

 

(f)     Acknowledgements of Parties. The parties to this Agreement hereby
acknowledge that they are sophisticated business persons who were represented by
counsel during the negotiations regarding the provisions hereof including,
without limitation, the provisions of this Section 8, and are fully informed
regarding said provisions. They further acknowledge that the provisions of this
Section 8 fairly allocate the risks in light of the ability of the parties to
investigate the Company and its business in order to assure that adequate
disclosure is made in the Disclosure Package.

 

Section 9.        Representations and Indemnities to Survive Delivery.

 

The respective indemnities, agreements, representations, warranties and other
statements of the Company or any of its Subsidiaries set forth in or made
pursuant to this Agreement will remain in full force and effect, regardless of:
(i) any investigation made by or on behalf of any Placement Agent Indemnified
Party or any of their respective representatives or agents; (ii) acceptance of
any Securities and payment therefor; and (iii) any termination of this Agreement
or expiration of the Offering Period. A successor to any Placement Agent
Indemnified Party shall be entitled to the benefits of the indemnity,
contribution and reimbursement agreements contained in Section 8.

 

19

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

 

 

Section 10.     Notices.

 

All communications hereunder shall be in writing and shall be mailed, hand
delivered or telecopied and confirmed to the parties hereto as follows:

 

If to Placement Agent:

 

ThinkEquity, a division of

Fordham Financial Management, Inc.

17 State Street, 22nd Floor

New York, NY 10004

Facsimile: (212) 349-2550

Attention: Eric Lord

 

With a copy to (which copy shall not constitute notice):

 

Loeb & Loeb LLP

345 Park Avenue
New York, NY 10154
Facsimile: (212) 504-3013

Attention: Mitchell S. Nussbaum

 

If to the Company:

 

CTD Holdings, Inc.

6714 NW 16th Street, Suite B

Gainesville, FL 32653

Attention: Chief Executive Officer

 

With a copy to (which copy shall not constitute notice):

 

Fox Rothschild LLP

101 Park Avenue
New York, NY 10178
Facsimile: (212) 692-0940

Attention: Alison Newman

 

Any party hereto may change the address for receipt of communications by giving
written notice to the others.

 

Section 11.     Successors.

 

This Agreement will inure to the benefit of and be binding upon the parties
hereto, and to the benefit of the Placement Agent Indemnified Parties (or any of
their respective successors) referred to in Section 8, and to their respective
successors, and personal representatives, and no other person will have any
right or obligation hereunder.

 

20

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

 

 

Section 12.     Partial Unenforceability.

 

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

 

Section 13.      Governing Law Provisions.

 

(a)     Governing Law. This agreement shall be governed by and construed in
accordance with the internal laws of the state of New York applicable to
agreements made and to be performed in such state.

 

(b)     Consent to Jurisdiction. Any legal suit, action or proceeding arising
out of or based upon this Agreement or the transactions contemplated hereby
(“Related Proceedings”) may be instituted in the federal courts of the United
States of America located in New York, New York, or the courts of the State of
New York in each case located in the Borough of Manhattan (collectively, the
“Specified Courts”), and each party irrevocably submits to the exclusive
jurisdiction (except for proceedings instituted in regard to the enforcement of
a judgment of any such court (a “Related Judgment”), as to which such
jurisdiction is non-exclusive) of such courts in any such suit, action or
proceeding. Service of any process, summons, notice or document by mail to such
party’s address set forth above shall be effective service of process for any
suit, action or other proceeding brought in any such court. The parties
irrevocably and unconditionally waive any objection to the laying of venue of
any suit, action or other proceeding in the Specified Courts and irrevocably and
unconditionally waive and agree not to plead or claim in any such court that any
such suit, action or other proceeding brought in any such court has been brought
in an inconvenient forum. EACH OF THE PLACEMENT AGENT AND THE COMPANY HEREBY
WAIVES (ON ITS OWN BEHALF AND, TO THE EXTENT PERMITTED BY LAW, ON BEHALF OF ITS
RESPECTIVE EQUITY HOLDERS AND CREDITORS) ANY RIGHT IT MAY HAVE TO TRIAL BY JURY
IN RESPECT OF ANY CLAIM BASED UPON, ARISING OUT OF OR IN CONNECTION WITH THIS
AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY (INCLUDING, WITHOUT
LIMITATION, THE OFFERING).

 

Section 14.     General Provisions.

 

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 this Offering.
Notwithstanding anything to the contrary set forth herein, it is understood and
agreed by the parties hereto that all other terms and conditions of the
Engagement Letter, dated March 19, 2019, by and between the Company and the
Placement Agent shall remain in full force and effect. This Agreement may be
executed in two or more counterparts, each one of which shall be an original,
with the same effect as if the signatures thereto and hereto were upon the same
instrument. This Agreement may not be amended or modified unless in writing by
all of the parties hereto, and no condition herein (express or implied) may be
waived unless waived in writing by each party whom the condition is meant to
benefit. Section headings herein are for the convenience of the parties only and
shall not affect the construction or interpretation of this Agreement.

 

[The remainder of this page has been intentionally left blank.]

[Signature Page Follows]

 

21

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

 

 

 

If the foregoing is in accordance with your understanding of our agreement,
please sign and return to the Company the enclosed copies hereof, whereupon this
instrument, along with all counterparts hereof, shall become a binding agreement
in accordance with its terms.

 

 

Very truly yours,

 

        CTD HOLDINGS, INC.  

 

 

 

 

 

 

 

 

 

By:

N. Scott Fine

 

 

 

Name: N. Scott Fine

 

 

 

Title:   Chief Executive Officer

 

 

The foregoing Placement Agency Agreement is hereby confirmed and accepted by the
Placement Agent as of the date first above written.

 

THINKEQUITY, A DIVISION OF FORDHAM FINANCIAL

MANAGEMENT, INC.

 

By: /s/ Eric Lord                                          

Name: Eric Lord

Title: Head of Investment Banking/Underwritings

 

[Signature Page to Placement Agency Agreement]

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

 

 

Exhibit A

 

Form of Placement Agent’s Warrant

 

 

[PROVIDED SEPARATELY]