Exhibit 10.2

 

15,000 Units

 

Each Unit consisting of

 

One Share of Preferred Stock and

 

A Warrant to Purchase up to 990.1 Shares of Common Stock

 

Ekso Bionics Holdings, Inc.

 

PLACEMENT AGENCY AGREEMENT

 

December 23, 2015

 

Ladenburg Thalmann & Co. Inc.

As Representative of the several

Placement Agents set forth in Schedule C hereto

c/o Ladenburg Thalmann & Co. Inc.

570 Lexington Avenue, 11th Floor

New York, New York 10022

 

Dear Sirs:

 

1. INTRODUCTION. Ekso Bionics Holdings, Inc., a Nevada corporation (the
“Company”), proposes to issue and sell to the purchasers, pursuant to the terms
and conditions of this Placement Agency Agreement (this “Agreement”) and the
Securities Purchase Agreement in the form of Exhibit A attached hereto (the
“Securities Purchase Agreement”) entered into with the purchasers identified
therein (each a “Purchaser” and, collectively, the “Purchasers”), up to an
aggregate of 15,000 units (the “Units”), each Unit consisting of (i) one share
(the “Shares”) of authorized but unissued Series A Convertible Preferred Stock,
par value $0.001 per share (the “Preferred Stock”) of the Company, which shares
of Preferred Stock shall be convertible into shares of common stock, par value
$0.001 per share, of the Company (the “Common Stock”) and (ii) a warrant (the
“Warrants”) to purchase up to 990.1 shares of Common Stock (the “Warrant
Shares”). The Units, the Shares, the shares of Common Stock underlying the
Preferred Stock (the “Conversion Shares”), the Warrants and the Warrant Shares
are collectively referred to herein as the “Securities”. The Shares and the
Warrants shall be immediately separable and transferable upon issuance. The
terms of (i) the Preferred Stock are set forth in the form of Certificate of
Designation (the “Certificate of Designation”) to be filed with the Secretary of
State of the State of Nevada and (ii) the Warrants are set forth in the form of
Warrant attached as Exhibit B hereto. The Company hereby confirms that Ladenburg
Thalmann & Co. Inc. (“Ladenburg”) and Trout Capital LLC (“Trout”, together with
Ladenburg, the “Placement Agents”) have acted as the Placement Agents in
accordance with the terms and conditions hereof. Ladenburg is acting as the
representative of the Placement Agents and in such capacity is hereinafter
referred to as the “Representative.”

 

2. AGREEMENT TO ACT AS PLACEMENT AGENTS; PLACEMENT OF THE UNITS. On the basis of
the representations, warranties and agreements of the Company herein contained,
and subject to the terms and conditions set forth in this Agreement:

 

(a) The Company hereby authorizes the Placement Agents to act as its exclusive
agents to solicit offers for the purchase of all or part of the Units from the
Company in connection with the proposed offering of the Units (the “Offering”).
Until the Closing Date (as defined below) or earlier upon termination of this
Agreement pursuant to Section 8, the Company shall not, without the prior
consent of the Representative, solicit or accept offers to purchase the Units
otherwise than through the Placement Agents.

 

 

 

 

(b) The Company hereby acknowledges that the Placement Agents have agreed, as
agents of the Company, to use their commercially reasonable efforts to solicit
offers to purchase the Units from the Company on the terms and subject to the
conditions set forth in the Prospectus (as defined below). The Placement Agents
shall use commercially reasonable efforts to assist the Company in obtaining
performance by each Purchaser whose offer to purchase the Units has been
solicited by the Placement Agents and accepted by the Company, but the Placement
Agents 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 Agents be obligated to underwrite or
purchase any Units for their own account and, in soliciting purchases of the
Units, the Placement Agents 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
Units may be solicited by the Placement Agents as agents for the Company at such
times and in such amounts as the Placement Agents deem advisable. The Placement
Agents shall communicate to the Company, orally or in writing, each reasonable
offer to purchase the Units received by them as agents of the Company. The
Company shall have the sole right to accept offers to purchase the Units and may
reject any such offer, in whole or in part. The Placement Agents shall have the
right to reject any offer to purchase the Units received by them, in whole or in
part, only following notice to the Company of such offer and the Company’s
agreement with the Placement Agent regarding such rejection.

 

(d) The Units are being sold to the Purchasers at an offering price of $1,000
per Unit. The purchases of the Units by the Purchasers shall be evidenced by the
execution of Securities Purchase Agreement by each of the Purchasers and the
Company.

 

(e) As compensation for services rendered, on the Closing Date (as defined
below), the Company shall pay to the Placement Agents by wire transfer of
immediately available funds to an account or accounts designated by the
Representative, an aggregate amount equal to 6.2% of the gross proceeds received
by the Company (the “Placement Fee”) from the sale of the Units on such Closing
Date. The Placement Agents may retain other brokers or dealers to act as
sub-agents on their behalf in connection with the Offering, the fees of which
shall be paid out of the Placement Fee.

 

(f) No Units which the Company has agreed to sell pursuant to this Agreement and
the Securities Purchase Agreement shall be deemed to have been purchased and
paid for, or sold by the Company, until such Units shall have been delivered to
the Purchaser thereof against payment by such Purchaser. If the Company shall
default in its obligations to deliver the Units 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 7(c) herein.

 

3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company represents and
warrants to the Placement Agents, as of the date hereof, and agrees with the
Placement Agents that:

 

(a) The Company has prepared and filed with the Securities and Exchange
Commission (the “Commission”) in accordance with the provisions of the
Securities Act of 1933, as amended, and the rules and regulations of the
Commission thereunder (collectively, the “Act”), a registration statement on
Form S-3 (File No. 333-205168), including a base prospectus (the “Base
Prospectus”), relating to, among other things, the Securities. Such registration
statement, as amended, including the financial statements, exhibits and
schedules thereto, at each time of effectiveness under the Act for purposes of
Section 11 of the Act, as such section applies to the Placement Agents (the
“Effective Time”), including any required information deemed to be part thereof
at the time of effectiveness pursuant to Rule 430B under the Act or the
Securities Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder (collectively, the “Exchange Act”) is called the
“Registration Statement.” Any preliminary prospectus supplement to the Base
Prospectus that described the Securities and the offering thereof and is used
prior to filing of the Prospectus is called, together with the Base Prospectus,
a “Preliminary Prospectus.” The term “Prospectus” shall mean the prospectus
supplement relating to the Securities, together with the Base Prospectus, that
is first filed pursuant to Rule 424(b) under the Act after the date and time
that this Agreement is executed and delivered to the parties hereto. If the
Company files another registration statement with the Commission to register a
portion of the Securities pursuant to Rule 462(b) under the Act (the “Rule 462
Registration Statement”), then any reference to “Registration Statement” herein
shall be deemed to include the registration statement on Form S-3 (File No.
333-205168) and the Rule 462 Registration Statement, as each such registration
statement may be amended pursuant to the Act. For purposes of this Agreement,
“free writing prospectus” has the meaning ascribed to it in Rule 405 under the
Act, and “Issuer Free Writing Prospectus” shall mean each free writing
prospectus prepared by or on behalf of the Company or used or referred to by the
Company in connection with the offering of the Securities. “Time of Sale
Information” shall mean the Preliminary Prospectus together with the free
writing prospectuses, if any, each identified in Schedule A hereto and the
information included on Schedule B hereto. All references in this Agreement to
the Registration Statement, the Rule 462 Registration Statement, a Preliminary
Prospectus, the Prospectus or the Time of Sale Information, or any amendments or
supplements to any of the foregoing, shall be deemed to refer to and include any
documents incorporated by reference therein, and shall include any copy thereof
filed with the Commission pursuant to its Electronic Data Gathering, Analysis
and Retrieval System (“EDGAR”).

 

1 

 

 

Any reference in this Agreement 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
under the Act, as of the date of the Registration Statement, such Preliminary
Prospectus or the Prospectus, as the case may be, and any reference to any
amendment or supplement to the Registration Statement, any Preliminary
Prospectus or the Prospectus shall be deemed to refer to and include any
documents filed after such date under the Exchange Act that, upon filing, are
incorporated by reference therein, as required by paragraph (b) of Item 12 of
Form S-3. As used herein, the term “Incorporated Documents” means the documents
that at the time of filing are incorporated by reference in the Registration
Statement, any Preliminary Prospectus, the Prospectus or any amendment or
supplement thereto.

 

(b) The Company satisfies all of the requirements of the Act for use of Form S-3
for the offering of the Securities contemplated hereby. The Company was not at
the time of initial filing of the Registration Statement and at the earliest
time thereafter that the Company or another offering participant made a bona
fide offer (within the meaning of Rule 164(h)(2) of the Act) of the Common
Stock, is not on the date hereof and will not be on the applicable Delivery
Date, an “ineligible issuer” (as defined in Rule 405 under the Act).

 

(c) The Registration Statement conformed, and any amendment to the Registration
Statement filed after the date hereof will conform in all material respects when
filed, to the requirements of the Act. The most recent Preliminary Prospectus
conformed, and the Prospectus will conform in all material respects to the
requirements of the Act when filed with the Commission pursuant to Rule 424(b)
under the Act.

 

(d) The Registration Statement does 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 not misleading; provided, that no
representation or warranty is made as to information contained in or omitted
from the Registration Statement in reliance upon and in conformity with the
written information furnished to the Company through the Representatives by or
on behalf of any Placement Agent specifically for inclusion therein, which shall
solely include the twelfth and thirteenth paragraphs concerning stabilization by
the Placement Agents under the caption “Plan of Distribution” in any Preliminary
Prospectus or Prospectus (the “Placement Agents’ Information”).

 

(e) The Registration Statement is effective under the Act, and no stop order
preventing or suspending the effectiveness of the Registration Statement or
suspending or preventing the use of any Preliminary Prospectus, the Prospectus
or any Issuer Free Writing Prospectus has been issued by the Commission and no
proceedings for that purpose have been instituted or, to the Company’s
knowledge, are threatened under the Act. Any required filing of any Preliminary
Prospectus and/or the Prospectus and any supplement thereto pursuant to Rule
424(b) under the Act has been or will be made in the manner and within the time
period required by such Rule 424(b). Any material required to be filed by the
Company pursuant to Rule 433(d) under the Act has been or will be made in the
manner and within the time period by such rules.

 

(f) The Incorporated Documents heretofore filed, when they were filed (or, if
any amendment with respect to any such document was filed, when such amendment
was filed), conformed in all material respects with the requirements of the
Exchange Act and the rules and regulations thereunder, and any further
Incorporated Documents so filed will, when they are filed, conform in all
material respects with the requirements of the Exchange Act and the rules and
regulations thereunder; no such Incorporated Document when it was filed (or, if
an amendment with respect to any such document was filed, when such amendment
was filed), contained an untrue statement of a material fact or omitted to state
a material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading; and no such further Incorporated Document, when it is filed,
will contain an untrue statement of a material fact or will omit to state a
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they are made, not
misleading.

 

2 

 

 

(g) The Prospectus will 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 that no representation or warranty is made as to
information contained in or omitted from the Prospectus in reliance upon and in
conformity with the Placement Agents’ Information.

 

(h) The Time of Sale Information does not, and will not at the time of sale of
the Securities, 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 that no representation or warranty is made as to
information contained in or omitted from the Time of Sale Information in
reliance upon and in conformity with the Placement Agents’ Information.

 

(i) Each Issuer Free Writing Prospectus (including, without limitation, any road
show that is a free writing prospectus under Rule 433 under the Act), when
considered together with the Time of Sale Information at the time of sale of the
Securities, 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.

 

(j) Each Issuer Free Writing Prospectus conformed or will conform in all
material respects to the requirements of the Act on the date of first use, and,
in reliance upon representations from the Representative, the Company has
complied with all prospectus delivery and any filing requirements applicable to
such Issuer Free Writing Prospectus pursuant to the Act. The Company has not
made any offer relating to the Securities that would constitute an Issuer Free
Writing Prospectus without the prior written consent of the Representatives. The
Company has retained in accordance with the Act all Issuer Free Writing
Prospectuses that were not required to be filed pursuant to the Act. The Company
has taken all actions necessary so that any “road show” (as defined in Rule 433
under the Act) in connection with the offering of the Securities will not be
required to be filed pursuant to the Act.

 

(k) The capitalization of the Company is and will be as set forth in the
Prospectus as of the date set forth therein. All the outstanding shares of
Common Stock and Preferred Stock of the Company have been, and as of the Closing
Date, will be, duly authorized and validly issued, fully paid and nonassessable
and free of any preemptive or similar rights; except as set forth in the Time of
Sale Information and the Prospectus, the Company is not a party to or bound by
any outstanding options, warrants or similar rights to subscribe for, or
contractual obligations to issue, sell, transfer or acquire, any of its capital
stock or any securities convertible into or exchangeable for any of such capital
stock; the Securities to be issued and sold by the Company hereunder have been
duly authorized and, when issued and delivered against full payment therefor in
accordance with the terms of this Agreement and the Securities Purchase
Agreement, will be validly issued, fully paid and nonassessable and free of any
preemptive or similar rights; the capital stock of the Company conforms to the
description thereof in the Registration Statement, the Time of Sale Information
and the Prospectus (or any amendment or supplement thereto); the Warrant Shares
and the Conversion Shares, when issued, paid for and delivered upon due exercise
of the Warrants and the conversion of the Shares, will be duly authorized and
validly issued, fully paid and nonassessable, will be issued in compliance with
all applicable securities laws, and will be free of preemptive or similar
rights; the Warrant Shares and the Conversion Shares have been reserved for
issuance; and the delivery of certificates for the Securities being sold by the
Company against payment therefor pursuant to the terms of the Securities
Purchase Agreement will pass valid title to the Securities being sold by the
Company, free and clear of any claim, encumbrance or defect in title, to the
several Purchasers purchasing such shares in good faith and without notice of
any lien, claim or encumbrance. The certificates for the Securities being sold
by the Company are in valid and sufficient form.

 

(l) Each of the Company and its subsidiaries is duly organized and validly
existing as a corporation, limited liability company or other organization in
good standing under the laws of the jurisdiction of its incorporation or
organization with full corporate or organizational power and authority to own,
lease and operate its properties and to conduct its business as presently
conducted and as described in the Registration Statement, the Time of Sale
Information and the Prospectus (and any amendment or supplement thereto filed
prior to the date hereof) and is duly registered and qualified to conduct its
business and is in good standing in each jurisdiction or place where the nature
of its properties or the conduct of its business requires such registration or
qualification, except where the failure to so register or qualify would not have
a material adverse effect on the condition (financial or other), business,
properties, or the results of operations of the Company and its subsidiaries
taken as a whole (a “Material Adverse Effect”).

 

3 

 

 

(m) The issued shares of capital stock of each of the Company’s subsidiaries
have been duly authorized and validly issued, are fully paid and nonassessable
and are owned by the Company free and clear of any security interests, liens,
encumbrances, equities or claims. The Company does not have any subsidiaries and
does not own a material interest in or control, directly or indirectly, any
other corporation, partnership, joint venture, association, trust or other
business organization, except for subsidiaries that are not significant
subsidiaries or as set forth in Exhibit 21 to the Company’s registration
statement on Form S-1 (File No. 333-195783). As used in this Agreement,
subsidiaries shall mean direct and indirect subsidiaries of the Company.

 

(n) There are no legal or governmental proceedings pending or, to the knowledge
of the Company, threatened, against the Company or its subsidiaries, or to which
the Company or its subsidiaries or any of their properties are subject, that are
required to be described in the Registration Statement or the Prospectus (or any
amendment or supplement thereto) but are not described as required. Except as
described in the Registration Statement, the Time of Sale Information and
Prospectus, there is no action, suit, inquiry, proceeding or investigation by or
before any court or governmental or other regulatory or administrative agency or
commission pending or, to the knowledge of the Company, threatened, against or
involving the Company or its subsidiaries, which might individually or in the
aggregate prevent or adversely affect the transactions contemplated by this
Agreement or result in a Material Adverse Effect, nor to the Company’s
knowledge, is there any basis for any such action, suit, inquiry, proceeding or
investigation. There are no (i) agreements, contracts, indentures, leases or
other instruments that are required to be described in the Registration
Statement, the Time of Sale Information or the Prospectus (or any amendment or
supplement thereto) or (ii) agreements to be filed as an exhibit to the
Registration Statement (clauses (i) and (ii), collectively, the “Material
Contracts”) that are not described, filed or incorporated by reference in the
Registration Statement, the Time of Sale Information and the Prospectus as
required by the Act. The Material Contracts have been duly authorized, executed
and delivered by the Company or the applicable subsidiary, constitute valid and
binding agreements of the Company or the applicable subsidiary and are
enforceable against the Company or the applicable subsidiary in accordance with
the terms thereof, except as enforceability thereof may be limited by (i) the
application of bankruptcy, reorganization, insolvency and other laws affecting
creditors’ rights generally and (ii) equitable principles being applied at the
discretion of a court before which any proceeding may be brought. Neither the
Company nor the applicable subsidiary has received notice or been made aware
that any other party is in breach of or default to the Company under any of such
contracts.

 

(o) Neither the Company nor any of its subsidiaries is (i) in violation of (A)
its articles of incorporation or bylaws, or other organizational documents, (B)
any federal, state or foreign law, ordinance, administrative or governmental
rule or regulation applicable to the Company or any of its subsidiaries, the
violation of which in the case of clause (B) only would have a Material Adverse
Effect or (C) any decree of any federal, state or foreign court or governmental
agency or body having jurisdiction over the Company or any of its subsidiaries,
the violation of which in the case of clause (C) only, would have a Material
Adverse Effect; or (ii) in default in any material respect in the performance of
any obligation, agreement or condition contained in (A) any bond, debenture,
note or any other evidence of indebtedness or (B) any agreement, indenture,
lease or other instrument (each of (A) and (B), an “Existing Instrument”) to
which the Company or any of its subsidiaries is a party or by which any of their
properties may be bound, which default would have a Material Adverse Effect; and
to the knowledge of the Company there does not exist any state of facts that
constitutes an event of default on the part of the Company or any of its
subsidiaries as defined in such documents or that, with notice or lapse of time
or both, would constitute such an event of default.

 

(p) The Company’s execution and delivery of this Agreement and the Securities
Purchase Agreement and the performance by the Company of its obligations
hereunder and thereunder have been duly and validly authorized by the Company
and this Agreement and the Securities Purchase Agreement have been duly executed
and delivered by the Company, and constitute valid and legally binding
agreements of the Company, enforceable against the Company in accordance with
their respective terms, except to the extent enforceability may be limited by
(i) the application of bankruptcy, reorganization, insolvency and other laws
affecting creditors’ rights generally and (ii) equitable principles being
applied at the discretion of a court before which any proceeding may be brought,
except as rights to indemnity and contribution hereunder may be limited by
federal or state securities laws.

 

4 

 

 

(q) None of the issuance and sale of the Securities by the Company, the
execution, delivery or performance of this Agreement and the Securities Purchase
Agreement by the Company nor the consummation by the Company of the transactions
contemplated hereby (i) requires any consent, approval, authorization or other
order of or registration or filing with, any court, regulatory body,
administrative agency or other governmental body, agency or official (except
such as may be required for the registration of the Securities under the Act,
the quotation of the Shares for trading on the OTC Bulletin Board (the “OTCBB”),
the registration of the Common Stock under the Exchange Act and the rules and
regulations of the Commission thereunder and compliance with the securities or
Blue Sky laws of various jurisdictions, all of which will be, or have been,
effected in accordance with this Agreement), (ii) conflicts with or will
conflict with or constitutes or will constitute a breach of, or a default under,
the Company’s articles of incorporation or the Company’s bylaws or any
agreement, indenture, lease or other instrument to which the Company or any of
its subsidiaries is a party or by which any of its properties may be bound,
(iii) violates any statute, law, regulation, ruling, filing, judgment,
injunction, order or decree applicable to the Company or any of its subsidiaries
or any of their properties, or (iv) results in a breach of, or default under, or
results in the creation or imposition of any lien, charge or encumbrance upon
any property or assets of the Company or any of its subsidiaries pursuant to, or
requires the consent of any other party to, any Existing Instrument, except for
such conflicts, breaches, defaults, liens, charges or encumbrances that will
not, individually or in the aggregate, result in a Material Adverse Effect.

 

(r) Except as described in the Time of Sale Information and the Prospectus, and
except for options to purchase capital stock issued pursuant to the Company’s
Amended and Restated 2014 Equity Incentive Plan, neither the Company nor any of
its subsidiaries has outstanding and at the Closing Date will have outstanding
any options to purchase, or any warrants to subscribe for, or any securities or
obligations convertible into, or any contracts or commitments to issue or sell,
any shares of Common Stock or Preferred Stock or any such warrants or
convertible securities or obligations. No holder of securities of the Company
has rights to the registration of any securities of the Company as a result of
or in connection with the filing of the Registration Statement or the
consummation of the transactions contemplated hereby that have not been
satisfied or heretofore waived in writing.

 

(s) OUM & Co., LLP, the certified public accountants who have certified the
financial statements (including the related notes thereto and supporting
schedules) filed as part of the Registration Statement and the Prospectus (or
any amendment or supplement thereto), are independent public accountants as
required by the Act and the Exchange Act.

 

(t) Except as disclosed in the Registration Statement, the Time of Sale
Information and the Prospectus (or any amendment or supplement thereto), since
the date of the last balance sheet included in or incorporated by reference into
the Prospectus (i) neither the Company nor any of its subsidiaries has incurred
any material liabilities or obligations, indirect, direct or contingent, or
entered into any transaction that is not in the ordinary course of business,
(ii) neither the Company nor any of its subsidiaries has sustained any material
loss or interference with its business or properties from fire, flood,
windstorm, accident or other calamity, whether or not covered by insurance,
(iii) neither the Company nor any of its subsidiaries has paid or declared any
dividends or other distributions with respect to its capital stock and the
Company is not in default under the terms of any class of capital stock of the
Company or any outstanding debt obligations, (iv) there has not been any change
in the authorized or outstanding capital stock of the Company or any material
change in the indebtedness of the Company (other than in the ordinary course of
business) and (v) there has not been any material adverse change, or any
development involving or that may reasonably be expected to result in a Material
Adverse Effect, in the condition (financial or otherwise), business, properties,
net worth, result of operations or prospects of the Company.

 

(u) All offers and sales of the Company’s capital stock and other debt or other
securities prior to the date hereof were made in compliance with or were the
subject of an available exemption from the Act and all other applicable state
and federal laws or regulations, or any actions under the Act or any state or
federal laws or regulations in respect of any such offers or sales are
effectively barred by effective waivers or statutes of limitation.

 

(v) The Common Stock is registered pursuant to Section 12(g) of the Exchange Act
and is quoted on the OTCBB, and the Company has taken no action designed to, or
likely to have the effect of, terminating the registration of the Common Stock
under the Exchange Act or terminating the quotation of the Common Stock on the
OTCBB, nor has the Company received any notification that the Commission or the
OTCBB is contemplating terminating such registration or quotation.

 

5 

 

 

(w) Other than excepted activity pursuant to Regulation M under the Exchange
Act, the Company has not taken and will not take, directly or indirectly, any
action that constituted, or any action designed to, or that might reasonably be
expected to cause or result in or constitute, under the Act or otherwise,
stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of the Securities or for any other purpose.

 

(x) The Company and each of its subsidiaries have filed, or have applied for an
extension of time to file, all tax returns required to be filed (other than
certain state or local tax returns, as to which the failure to file,
individually or in the aggregate, would not have a Material Adverse Effect),
which filed returns are complete and correct, and neither the Company nor any
subsidiary is in default in the payment of any taxes that were payable pursuant
to said filed returns or any assessments with respect thereto. Except as
disclosed in the Time of Sale Information and the Prospectus, all deficiencies
asserted as a result of any federal, state, local or foreign tax audits have
been paid or finally settled and no issue has been raised in any such audit
that, by application of the same or similar principles, reasonably could be
expected to result in a proposed deficiency for any other period not so audited.
There are no outstanding agreements or waivers extending the statutory period of
limitation applicable to any federal, state, local or foreign tax return for any
period. On the Closing Date, all stock transfer and other taxes that are
required to be paid in connection with the sale of the shares to be sold by the
Company will have been fully paid by the Company and all laws imposing such
taxes will have been complied with.

 

(y) Except as set forth in the Time of Sale Information and the Prospectus,
there are no transactions with “affiliates” (as defined in Rule 405 under the
Act) or any officer, director or security holder of the Company (whether or not
an affiliate) that are required by the Act to be disclosed in the Registration
Statement. Additionally, no relationship, direct or indirect, exists between the
Company or any of its subsidiaries on the one hand, and the directors, officers,
stockholders, customers or suppliers of the Company or any subsidiary on the
other hand that is required by the Act to be disclosed in the Registration
Statement, the Time of Sale Information and the Prospectus that is not so
disclosed.

 

(z) The Company is not an “investment company” within the meaning of the
Investment Company Act of 1940, as amended.

 

(aa) Each of the Company and its subsidiaries has good and valid title to all
property (real and personal) described in the Time of Sale Information and the
Prospectus as being owned by it, free and clear of all liens, claims, security
interests or other encumbrances except (i) such as are described in the Time of
Sale Information and the Prospectus or (ii) such as are not materially
burdensome and has not had or would not result in a Material Adverse Effect to
the use of the property or the conduct of the business of the Company. All
property (real and personal) held under lease by the Company and its
subsidiaries is held by it under valid, subsisting and enforceable leases with
only such exceptions as in the aggregate are not materially burdensome and do
not have or result in a Material Adverse Effect to the use of the property or
the conduct of the business of the Company.

 

(bb) Except as otherwise disclosed in the Time of Sale Information and the
Prospectus, each of the Company and its subsidiaries has all permits, licenses,
franchises, approvals, consents and authorizations of governmental or regulatory
authorities (hereinafter “permit” or “permits”) as are necessary to own its
properties and to conduct its business in the manner described in the Time of
Sale Information and the Prospectus, subject to such qualifications as may be
set forth in the Time of Sale Information and the Prospectus, except where the
failure to have obtained any such permit has not had and would not have a
Material Adverse Effect; except as otherwise disclosed in the Time of Sale
Information and the Prospectus, each of the Company and its subsidiaries has
operated and is operating its business in material compliance with and not in
material violation of all of its obligations with respect to each such permit
and no event has occurred that allows, or after notice or lapse of time would
allow, revocation or termination of any such permit or result in any other
material impairment of the rights of any such permit, subject in each case to
such qualification as may be set forth in the Time of Sale Information and the
Prospectus; and, except as described in the Time of Sale Information and the
Prospectus, such permits contain no restrictions that are materially burdensome
to the Company or any of its subsidiaries.

 

6 

 

 

(cc) The consolidated financial statements of the Company, together with the
related schedules and notes thereto, set forth or incorporated by reference in
the Time of Sale Information and the Prospectus present fairly in all material
respects (i) the financial condition of the Company and its consolidated
subsidiaries as of the dates indicated and (ii) the consolidated results of
operations, stockholders’ equity and changes in cash flows of the Company and
its consolidated subsidiaries for the periods therein specified; and such
financial statements and related schedules and notes thereto have been prepared
in conformity with United States generally accepted accounting principles,
consistently applied throughout the periods involved (except as otherwise stated
therein and subject, in the case of unaudited financial statements, to the
absence of footnotes and normal year-end adjustments). There are no other
financial statements (historical or pro forma) that are required to be included
or incorporated by reference in the Time of Sale Information and the Prospectus;
and the Company does not have any material liabilities or obligations, direct or
contingent (including any off-balance sheet obligations), not disclosed in the
Time of Sale Information and the Prospectus; and all disclosures contained in
the Time of Sale Information and the Prospectus regarding “non-GAAP financial
measures” (as such term is defined by the rules and regulations of the
Commission) comply with Regulation G of the Exchange Act and Item 10(e) of
Regulation S-K under the Act, to the extent applicable, and present fairly in
all material respects the information shown therein and the Company’s basis for
using such measures. The interactive data in eXtensible Business Reporting
Language included or incorporated by reference in the Registration Statement
fairly presents the information called for in all material respects and has been
prepared in accordance with the Commission’s rules and guidelines applicable
thereto.

 

(dd) The Company and its subsidiaries maintain a system of internal accounting
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 generally accepted accounting principles and to
maintain accountability for assets, (iii) access to assets is permitted only in
accordance with management’s general or specific authorizations, (iv) the
recorded accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences and (v) the interactive data in eXtensible Business Reporting
Language included or incorporated by reference in the Registration Statement
fairly presents the information called for in all material respects and has been
prepared in accordance with the Commission’s rules and guidelines applicable
thereto.

 

(ee) The Company has established and maintains and evaluates “disclosure
controls and procedures” (as such term is defined in Rule 13a-15 and 15d-15
under the Exchange Act); except as disclosed in the Registration Statement, the
Time of Sale Information and the Prospectus (or any amendment or supplement
thereto), such disclosure controls and procedures are designed to ensure that
material information relating to the Company, including its consolidated
subsidiaries, is made known to the Company’s Chief Executive Officer and its
Chief Financial Officer by others within those entities, and such disclosure
controls and procedures are effective to perform the functions for which they
were established; the Company’s independent auditors and the Audit Committee of
the Board of Directors of the Company have been advised of (i) all significant
deficiencies and material weaknesses in the design or operation of internal
control over financial reporting which could adversely affect the Company’s
ability to record, process, summarize, and report financial data and (ii) any
fraud, whether or not material, that involves management or other employees who
have a significant role in the Company’s internal control over financial
reporting; since the date of the most recent evaluation of such disclosure
controls and procedures, except as described in the Registration Statement, the
Preliminary Prospectus and the Prospectus, there have been no significant
changes in internal control over financial reporting or in other factors that
could significantly affect internal control over financial reporting, including
any corrective actions with regard to significant deficiencies and material
weaknesses; the principal executive officers (or their equivalents) and
principal financial officers (or their equivalents) of the Company have made all
certifications required by the Sarbanes-Oxley Act (the “Sarbanes-Oxley Act”) and
any related rules and regulations promulgated by the Commission, and the
statements contained in each such certification are complete and correct; the
Company and its subsidiaries are, and the Company has taken all necessary
actions to ensure that the Company’s directors and officers in their capacities
as such are, each in compliance in all material respects with all applicable
effective provisions of the Sarbanes-Oxley Act and the rules and regulations of
the Commission promulgated thereunder.

 

(ff) The Company and, to the knowledge of the Company, the Company’s directors
or officers, in their capacities as such, are each in compliance in all material
respects with Section 402 of the Sarbanes-Oxley Act and the rules and
regulations promulgated thereunder.

 

(gg) The Company has not, prior to the date hereof, made any offer or sale of
securities which could be “integrated” for purposes of the Act with the offer
and sale of the Securities pursuant to the Registration Statement and the
Prospectus; and except as disclosed in the Time of Sale Information and the
Prospectus, the Company has not sold or issued any security during the 180-day
period preceding the date of the Prospectus, including but not limited to any
sales pursuant to Rule 144A or Regulation D or S under the Act, other than
shares of Common Stock issued pursuant to employee benefit plans, qualified
stock option plans or other employee compensation plans or pursuant to
outstanding options, rights or warrants as described in the Time of Sale
Information and the Prospectus.

 

7 

 

 

(hh) Neither the Company nor any of its subsidiaries nor, to the knowledge of
the Company, any director, officer, agent, employee or affiliate of the Company
or any of its subsidiaries is aware of or has taken any action, directly or
indirectly, that would result in a violation by such persons of the Foreign
Corrupt Practices Act of 1977, as amended, and the rules and regulations
thereunder (the “Foreign Corrupt Practices Act”), including, without limitation,
making use of the mails or any means or instrumentality of interstate commerce
corruptly in furtherance of an offer, payment, promise to pay or authorization
of the payment of any money, or other property, gift, promise to give, or
authorization of the giving of anything of value to any “foreign official” (as
such term is defined in the Foreign Corrupt Practices Act) or any foreign
political party or official thereof or any candidate for foreign political
office, in contravention of the Foreign Corrupt Practices Act; and the Company,
its subsidiaries and, to the knowledge of the Company, its affiliates have
conducted their businesses in compliance in all material respects with the
Foreign Corrupt Practices Act and have instituted and maintain policies and
procedures designed to ensure, and which are reasonably expected to continue to
ensure, continued compliance in all material respects therewith.

 

(ii) Neither the Company nor any of its subsidiaries nor, to the knowledge of
the Company, any director, officer, agent, employee or affiliate of the Company
or any of its subsidiaries is currently subject to any U.S. sanctions
administered by the Office of Foreign Assets Control of the U.S. Department of
the Treasury (“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.

 

(jj)The operations of the Company and its subsidiaries are and have been
conducted at all times in compliance in all material respects with applicable
financial recordkeeping and reporting requirements of the Currency and Foreign
Transactions Reporting Act of 1970, as amended, the “United and Strengthening
America by Providing Appropriate Tools Required to Intercept and Obstruct
Terrorism Act of 2001” (the “Patriot Act”) or the money laundering statutes of
all jurisdictions, the rules and regulations thereunder and any related or
similar rules, regulations or guidelines, issued, administered or enforced by
any governmental agency.

 

(kk) No labor problem or dispute with the employees of the Company or any of its
subsidiaries exists, or, to the Company’s knowledge, is threatened or imminent,
which would reasonably be expected to result in a Material Adverse Effect. The
Company is not aware that any key employee or significant group of employees of
the Company or any of its subsidiaries plans to terminate employment with the
Company or any of its subsidiaries. Except for matters which would not,
individually or in the aggregate, result in a Material Adverse Effect, neither
the Company nor any of its subsidiaries has engaged in any unfair labor
practice, and (i) there is (A) no unfair labor practice complaint pending or, to
the Company’s knowledge, threatened against the Company or any of its
subsidiaries before the National Labor Relations Board, and no grievance or
arbitration proceeding arising out of or under collective bargaining agreements
is pending or to the Company’s knowledge, threatened, (B) no strike, labor
dispute, slowdown or stoppage pending or, to the Company’s knowledge, threatened
against the Company or any of its subsidiaries and (C) no union representation
dispute currently existing concerning the employees of the Company or any of its
subsidiaries and (ii) to the Company’s knowledge, (A) no union organizing
activities are currently taking place concerning the employees of the Company or
any of its subsidiaries and (B) there has been no violation of any federal,
state, local or foreign law relating to discrimination in the hiring, promotion
or pay of employees, any applicable wage or hour laws or any provision of the
Employee Retirement Income Security Act of 1974 (“ERISA”) or the rules and
regulations promulgated thereunder concerning the employees of the Company or
any of its subsidiaries.

 

8 

 

 

(ll) Except as disclosed in the Registration Statement, the Time of Sale
Information and the Prospectus (or any amendment or supplement thereto), the
Company and its subsidiaries (i) are in compliance with any and all applicable
federal, state, local and foreign laws and regulations relating to the
protection of human health and safety, the environment or hazardous or toxic
substances or wastes, pollutants or contaminants (“Environmental Laws”), (ii)
have received all permits, licenses or other approvals required of them under
applicable Environmental Laws to conduct their respective businesses and (iii)
are in compliance with all terms and conditions of any such permit, license or
approval, except where such noncompliance with Environmental Laws, failure to
receive required permits, licenses or other approvals or failure to comply with
the terms and conditions of such permits, licenses or other approvals would not,
individually or in the aggregate, have a Material Adverse Effect. Neither the
Company nor any of its subsidiaries has been named as a “potentially responsible
party” under the Comprehensive Environmental Response Compensation and Liability
Act of 1980, as amended. Neither the Company nor any of its subsidiaries owns,
leases or occupies any property that appears on any list of hazardous sites
compiled by any state or local governmental agency. There are no costs or
liabilities associated with Environmental Laws (including, without limitation,
any capital or operating expenditures required for clean-up, closure of
properties or compliance with Environmental Laws or any permit, license or
approval, any related constraints on operating activities and any potential
liabilities to third parties) which would, individually or in the aggregate,
result in a Material Adverse Effect.

 

(mm) Except as otherwise disclosed in the Time of Sale Information and the
Prospectus, each of the Company and its subsidiaries owns and has full right,
title and interest in and to, or has valid licenses to use, each material trade
name, trademark, service mark, patent, copyright, approval, trade secret and
other similar rights (collectively “Intellectual Property”) under which the
Company and its subsidiaries conduct all or any material part of its business,
and the Company has not created any lien or encumbrance on, or granted any right
or license with respect to, any such Intellectual Property except where the
failure to own or obtain a license or right to use any such Intellectual
Property would not have a Material Adverse Effect; there is no material claim
pending against the Company or its subsidiaries with respect to any Intellectual
Property, and the Company and its subsidiaries have not received notice or
otherwise become aware that any Intellectual Property that it uses or has used
in the conduct of its business infringes upon or conflicts with the rights of
any third party. Neither the Company nor any of its subsidiaries has become
aware that any material Intellectual Property that it uses or has used in the
conduct of its business infringes upon or conflicts with the rights of any third
party.

 

(nn) The Company has procured Lock-Up Agreements, in the form of Exhibit C
attached hereto, from each of the individuals set forth on Schedule D.

 

(oo) To the Company’s knowledge, there are no affiliations or associations
between (i) any member of FINRA and (ii) the Company or any of the Company’s
officers, directors, 5% or greater security holders or any beneficial owner of
the Company’s unregistered equity securities that were acquired at any time on
or after the 180th day immediately preceding the date the Registration Statement
was initially filed with the Commission, except as otherwise disclosed in the
Registration Statement, the Time of Sale Information, the Prospectus or the
FINRA Questionnaires previously furnished to the Representative.

 

(pp) The Company and each of its subsidiaries are insured by insurers of
recognized financial responsibility against such losses and risks and in such
amounts as are prudent and customary in the businesses in which it is engaged;
and neither the Company nor any of its subsidiaries has reason to believe that
it will not be able to renew its existing insurance coverage as and when such
coverage expires or to obtain similar coverage from similar insurers as may be
necessary to continue its business at a comparable cost.

 

(qq) The Company and its subsidiaries and any “employee benefit plan” (as
defined under ERISA) established or maintained by the Company, its subsidiaries
or their “ERISA Affiliates” (as defined below) are in compliance in all material
respects with ERISA and all other applicable state and federal laws. “ERISA
Affiliate” means, with respect to the Company or a subsidiary, any member of any
group or organization described in Sections 414(b), (c), (m) or (o) of the Code
of which the Company or such subsidiary is a member. No “reportable event” (as
defined in ERISA) has occurred or is reasonably expected to occur with respect
to any “employee benefit plan” established or maintained by the Company, its
subsidiaries or any of their ERISA Affiliates. No “employee benefit plan”
established or maintained by the Company, its subsidiaries or any of their ERISA
Affiliates, if such “employee benefit plan” were terminated, would have any
“amount of unfunded benefit liabilities” (as defined in ERISA). Neither the
Company, its subsidiaries nor any of their ERISA Affiliates has incurred or
reasonably expects to incur any liability under (i) Title IV of ERISA with
respect to termination of, or withdrawal from, any “employee benefit plan” or
(ii) Sections 412, 4971, 4975 or 4980B of the Code. Each “employee benefit plan”
established or maintained by the Company, its subsidiaries or any of their ERISA
Affiliates that is intended to be qualified under Section 401(a) of the Code is
so qualified and nothing has occurred, whether by action or failure to act, that
would cause the loss of such qualification.

 

9 

 

 

(rr) Except as otherwise disclosed in the Time of Sale Information and the
Prospectus, each of the Company and its subsidiaries has all registrations,
permits, licenses, approvals, consents and authorizations (“Regulatory Permits”)
required by the United States Food and Drug Administration (the “FDA”) or any
other regulatory authority engaged in the regulation of medical devices such as
those being developed by the Company (“Regulatory Authority”). The Company is in
material compliance with the requirements of the Regulatory Permits, and all of
the Regulatory Permits are valid and in full force and effect; the Company has
not received any notice of proceedings relating to the revocation, termination,
modification or impairment of rights of any of the Regulatory Permits, that,
individually or in the aggregate, if the subject of an unfavorable decision,
ruling or finding could reasonably be expected to result in a Material Adverse
Effect; the Company has not failed to file with the FDA or any other Regulatory
Authority any required application, submission, report, document, or notice, and
all such filings were in material compliance with applicable laws when filed and
have been supplemented as necessary to remain in material compliance with
applicable laws and no material deficiencies have been asserted by the FDA or
any other Regulatory Authority with respect to any such filings, in each case,
except as otherwise disclosed in the Time of Sale Information and the
Prospectus.

 

(ss) The non-clinical studies and, as applicable, clinical trials conducted by
the Company, and each of its subsidiaries have been and, if still pending, are
being conducted, in all material respects, in accordance with experimental
protocols and procedures pursuant to all applicable laws and Regulatory Permits,
and the results of such studies and clinical trials described in the Time of
Sale Information and the Prospectus are accurate and fairly present, in all
material respects, the data derived from such studies and clinical trials; any
studies and clinical trials conducted by the Company, or its subsidiaries, if
still pending, are being conducted in all material respects in accordance with
applicable professional and scientific standards and the applicable requirements
of the FDA and other Regulatory Authorities; neither the Company nor any
subsidiary has received any notice or correspondence from the FDA nor any
Regulatory Authority requiring the termination, suspension or modification of
any such study or clinical trial; and the Company is not aware of any study or
clinical trial, the results of which the Company believes reasonably call into
question the results described or referred to in the Time of Sale Information
and the Prospectus.

 

4. FURTHER AGREEMENTS OF THE COMPANY. The Company agrees with the Placement
Agents:

 

(a) To prepare the Rule 462(b) Registration Statement, if necessary, in a form
approved by the Representative 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 Representative 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) of 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 of the Rules and
Regulations; to notify the Representative immediately of the Company’s intention
to file or prepare any supplement or amendment to any Registration Statement or
to the Prospectus in connection with this Offering and to make no amendment or
supplement to the Registration Statement, the Time of Sale Information or to the
Prospectus to which the Representative shall reasonably object by notice to the
Company after a reasonable period to review; to advise the Representative,
promptly after it receives notice thereof, of the time when any amendment to the
Registration Statement has been filed or becomes effective or any supplement to
the Time of Sale Information or the Prospectus or any amended Prospectus has
been filed and to furnish the Representative 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 Sections
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) of the Rules and Regulations) is required
in connection with the Offering or sale of the Securities; to advise the
Representative, 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 Time of Sale
Information 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 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.

 

10 

 

 

(b) The Company represents and agrees that, it has not made, and unless it
obtains the prior consent of the Representative, it will not make, any offer
relating to the Units that would constitute a “free writing prospectus” as
defined in Rule 405 of the Rules and Regulations (each, a “Permitted Free
Writing Prospectus”); provided that the prior written consent of the
Representative 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 of 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 Agents or the Company being required
to file with the Commission pursuant to Rule 433(d) of the Rules and Regulations
a free writing prospectus prepared by or on behalf of such Placement Agent that
such Placement Agent otherwise would not have been required to file thereunder.

 

(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
Representative, and upon the Representative’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 Agents, without charge, such number of copies thereof as the
Placement Agents may reasonably request. The Company consents to the use of the
Prospectus or any amendment or supplement thereto by the Placement Agents.

 

(d) If the Time of Sale Information 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 Representative, it becomes
necessary to amend or supplement the Time of Sale Information in order to make
the statements therein, in the light of the circumstances under which they were
made, 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 Time of Sale Information to comply with any law, the
Company promptly will either (i) prepare, file with the Commission (if required)
and furnish to the Placement Agents and any dealers an appropriate amendment or
supplement to the Time of Sale Information or (ii) prepare and file with the
Commission an appropriate filing under the Exchange Act which shall be
incorporated by reference in the Time of Sale Information so that the Time of
Sale Information as so amended or supplemented will not, in the light of the
circumstances under which they were made, be misleading or conflict with the
Registration Statement then on file, or so that the Time of Sale Information
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, Preliminary Prospectus or 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 under which they were
made, not misleading, the Company has promptly notified or will promptly notify
the Representative 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 the Representative by or on behalf of
the Placement Agents specifically for inclusion therein, which information the
parties hereto agree is limited to the Placement Agents’ Information (as defined
in Section 3(d)).

 

11 

 

 

(f) To the extent not available on the Commission’s EDGAR system or any
successor system, to furnish promptly to the Placement Agents and to counsel for
the Placement Agents 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.

 

(g) To the extent not available on the Commission’s EDGAR system or any
successor system, to deliver promptly to the Representative in New York City
such number of the following documents as the Representative shall reasonably
request: (i) conformed copies of the Registration Statement as originally filed
with the Commission (in each case excluding exhibits), (ii) each Preliminary
Prospectus (if any), (iii) any Issuer Free Writing Prospectus, (iv) the
Prospectus (the delivery of the documents referred to in clauses (i), (ii),
(iii) and (iv) 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), (v) conformed copies of any amendment to the Registration Statement
(excluding exhibits), (vi) any amendment or supplement to the Time of Sale
Information or the Prospectus (the delivery of the documents referred to in
clauses (v) and (vi) 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 (vii) any document incorporated by reference in the Time of Sale
Information or the Prospectus (excluding exhibits thereto) (the delivery of the
documents referred to in clause (vi) 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 stockholders 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) of the Rules and
Regulations), an earnings statement of the Company and its subsidiaries (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).

 

(i) The Company will cooperate with you and counsel for the Representative in
connection with the registration or qualification of the Securities under the
securities or Blue Sky laws of such jurisdictions as you may reasonably
designate and will file such consents to service of process or other documents
as may be reasonably necessary in order to effect and maintain such registration
or qualification for so long as required to complete the distribution of the
Securities; provided that in no event shall the Company be obligated to qualify
to do business in any jurisdiction where it is not now so qualified or to take
any action that would subject it to general service of process in suits, other
than those arising out of the offering or sale of the Securities, as
contemplated by this Agreement and the Prospectus, in any jurisdiction where it
is not now so subject. In the event that the qualification of the Securities in
any jurisdiction is suspended, the Company shall so advise you promptly in
writing. The Company will use its reasonable best efforts to qualify or register
the Conversion Shares and Warrant Shares for sale in non-issuer transactions
under (or obtain exemptions from the application of) the Blue Sky laws of each
state where necessary to permit market making transactions and secondary trading
and will comply with such Blue Sky laws and will continue such qualifications,
registrations and exemptions in effect until the earlier of such time as the
Common Stock is listed or quoted, as the case may be, on the New York Stock
Exchange, the American Stock Exchange or quoted on the NASDAQ Stock Market, or
three (3) years from the date hereof, provided that if the Company obtains and
keeps current a listing of its Common Stock in the Standard & Poor’s Corporation
Records Services or Mergent’s Industrial Manual it shall be deemed to have
satisfied such requirement, except that Mergent’s OTC Industrial Manual is not
sufficient for these purposes. Unless the Common Stock is listed or quoted, as
the case may be, on the New York Stock Exchange, the American Stock Exchange or
quoted on the NASDAQ Stock Market, the Company shall at the beginning of each
fiscal quarter, provide you with a written report detailing those states in
which the Conversion Shares and Warrant Shares may be traded in non-issuer
transactions under the Blue Sky laws of the fifty States for a period of three
(3) years after the date hereof.

 

(j) Upon request, during the period of three (3) years from the date hereof, to
the extent not available on the Commission’s EDGAR system or any successor
system, to deliver to the Placement Agents, as soon as they are available
(i) copies of all reports or other communications furnished to stockholders, and
(ii) 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 Common Stock is listed or quoted.

 

12 

 

 

(k) For a period commencing on the date hereof and ending on the 90th day after
the date of the Prospectus (the “Lock-Up Period”), the Company agrees not to,
directly or indirectly, and other than in connection with an Exempt Issuance (as
defined in the Securities Purchase Agreement), (1) offer for sale, sell, pledge
or otherwise dispose of (or enter into any transaction or device that is
designed to do any of the foregoing) any shares of Common Stock or securities
convertible into or exchangeable for Common Stock (other than Common Stock
issued pursuant to employee benefit plans, qualified stock option plans or other
employee compensation plans existing on the date hereof or pursuant to currently
outstanding options, warrants or rights or Common Stock issued pursuant to other
agreements existing on the date hereof and disclosed in the Registration
Statement or the Prospectus), or sell or grant options, rights or warrants with
respect to any shares of Common Stock or securities convertible into or
exchangeable for Common Stock (other than the grant of options, warrants or
rights pursuant to employee benefit plans, qualified stock option plans or other
employee compensation plans existing on the date hereof), (2) enter into any
swap or other derivatives transaction that transfers to another, in whole or in
part, any of the economic benefits or risks of ownership of such shares of
Common Stock, whether any such transaction described in clause (1) or (2) above
is to be settled by delivery of Common Stock or other securities, in cash or
otherwise, (3) file or cause to be filed a registration statement, including any
amendments, with respect to the registration of any shares of Common Stock or
securities convertible, exercisable or exchangeable into Common Stock or any
other securities of the Company (other than the filing of a registration
statement on Form S-8, including any amendments thereto, or any post effective
amendments or prospectus supplements with respect to the Company’s registration
statement on Form S-1 (File No. 333-195783), effective as of the date hereof) or
(4) publicly disclose the intention to do any of the foregoing, in each case
without the prior written consent of the Representative, and to cause each
individual set forth on Schedule D to furnish to the Representative, prior to
the Closing Date, a letter or letters, substantially in the form of Exhibit C
hereto (the “Lock-Up Agreements”).

 

(l) To the extent not available on EDGAR, to supply the Representative 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.

 

(m) 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 marketing communications in
the ordinary course of business and consistent with the past practices of the
Company, and of which the Representative is notified), without the prior written
consent of the Representative, unless in the judgment of the Company and its
counsel, and after notification to the Representative, such press release or
communication is required by law or applicable stock exchange rules.

 

(n) Until the Representative shall have notified the Company of the completion
of the Offering, 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 purchases for
the purpose of creating actual, or apparent, active trading in or of raising the
price of the Securities.

 

(o) Not to take any action prior to the Closing Date, which would require the
Prospectus to be amended or supplemented pursuant to Section 4.

 

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

 

(q) To apply the net proceeds from the sale of the Securities as set forth in
the Registration Statement, the Time of Sale Information and the Prospectus
under the heading “Use of Proceeds.”

 

(r) To use its best efforts to assist the Placement Agents with any filings
with, and to obtain clearance from, FINRA.

 

(s) To use its best efforts to list, subject to notice of issuance, effect and
maintain the quotation and listing of the Common Stock on the OTCBB.

 

13 

 

 

(t) To timely file with OTCBB all documents and notices required by the OTCBB of
companies that have or will issue securities that are quoted on the OTCBB.

 

(u) To use its 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 Securities.

 

5. PAYMENT OF EXPENSES. Whether or not the transactions contemplated hereby are
consummated or this Agreement becomes effective or is terminated, the Company
agrees to pay or cause to be paid the following: (i) the fees, disbursements and
expenses of the Company’s counsel and accountants in connection with the
registration of the sale of Securities under the Act and all other expenses in
connection with the preparation, printing and filing of the Registration
Statement and the Prospectus and amendments and supplements thereto and the
mailing and delivering of copies thereof and of any Preliminary Prospectus; (ii)
the printing and delivery (including postage, air freight charges and charges
for counting and packaging) of such copies of the Registration Statement, the
Prospectus, each Preliminary Prospectus, the Time of Sale Information, the Blue
Sky memoranda, this Agreement, the Selected Dealers Agreement and all amendments
or supplements to any of them as may be reasonably requested for use in
connection with the offering and sale of the Securities; (iii) consistent with
the provisions of Section 4(i), all expenses in connection with the
qualification of the Securities for offering and sale under state securities
laws or Blue Sky laws; (iv) the filing fees incident to securing any required
review by FINRA of the fairness of the terms of the sale of the Securities and
the reasonable fees and disbursements of the Placement Agents’ counsel relating
thereto; (v) the fees and expenses associated with quoting the Common Stock on
the OTCBB; (vi) the cost of preparing stock certificates; (vii) the costs and
charges of any transfer agent or registrar; (viii) the cost of the tax stamps,
if any, in connection with the issuance and delivery of the Securities; (ix) all
other fees, costs and expenses referred to in Part II, Item 14 of the
Registration Statement; and (x) the transportation, lodging, graphics and other
expenses incidental to the Company’s preparation for and participation in the
“roadshow” for the offering contemplated hereby. Except as provided in this
Section 5 and in Section 7 hereof, the Placement Agents shall pay their own
expenses, including the fees and disbursements of their counsel, provided
however that upon the closing of the sale of Securities, the Company shall
reimburse the Placement Agents for fees, disbursements and other charges of
counsel to the Placement Agents in an amount not to exceed $62,500.

 

6. CONDITIONS TO THE OBLIGATIONS OF THE PLACEMENT AGENTS, AND THE SALE OF THE
SECURITIES. The respective obligations of the Placement Agents hereunder, and
the closing of the sale of the Units, are subject to each of the following terms
and conditions:

 

(a) All filings require by Rules 424(b), 430B and 462 under the Act shall have
been timely made.

 

(b) You shall be reasonably satisfied that since the respective dates as of
which information is given in the Registration Statement, the Time of Sale
Information and Prospectus, (i) there shall not have been any change in the
capital stock of the Company or any material change in the indebtedness (other
than in the ordinary course of business) of the Company, (ii) except as set
forth or contemplated by the Registration Statement, the Time of Sale
Information or the Prospectus, no material oral or written agreement or other
transaction shall have been entered into by the Company that is not in the
ordinary course of business or that could reasonably be expected to result in a
material reduction in the future earnings of the Company, (iii) no loss or
damage (whether or not insured) to the property of the Company shall have been
sustained that had or could reasonably be expected to have a Material Adverse
Effect, (iv) no legal or governmental action, suit or proceeding affecting the
Company or any of its properties that is material to the Company or that affects
or could reasonably be expected to affect the transactions contemplated by this
Agreement shall have been instituted or threatened and (v) there shall not have
been any material change in the condition (financial or otherwise), business,
management, results of operations or prospects of the Company or its
subsidiaries that makes it impractical or inadvisable in your judgment to
proceed with the public offering or purchase of the Securities as contemplated
hereby.

 

(c) You shall have received on the Closing Date an opinion of Nutter McClennen &
Fish LLP, counsel to the Company, addressed to the Representative, substantially
in the form heretofore approved by you.

 

In rendering such opinion, counsel may rely, to the extent they deem such
reliance proper, as to matters of fact upon certificates of officers of the
Company and of government officials, provided that counsel shall state their
belief that they and you are justified in relying thereon. Copies of all such
certificates shall be furnished to you and your counsel on the Closing Date.

 

14 

 

 

 

(d) You shall have received on the Closing Date an opinion of Diederiks &
Whitelaw, PLC, special intellectual property counsel to the Company, addressed
to the Representative, substantially in the form heretofore approved by you.

 

(e) You shall have received on the Closing Date an opinion of Mintz, Levin,
Cohn, Ferris, Glovsky and Popeo, P.C., as counsel for the Placement Agents,
dated the Closing Date with respect to the issuance and sale of the Securities,
the Registration Statement and other related matters as you may reasonably
request, and the Company and its counsel shall have furnished to your counsel
such documents as they may reasonably request for the purpose of enabling them
to pass upon such matters.

 

(f) You shall have received letters addressed to you and dated the date hereof
and the Closing Date, from (i) the firm of OUM & Co. LLP, independent certified
public accountants and (ii) the Chief Financial Officer of the Company,
substantially in the forms heretofore approved by you.

 

(g) (i) No stop order suspending the effectiveness of the Registration Statement
shall have been issued by the Commission and no proceedings for that purpose
shall be pending or, to the knowledge of the Company, shall be threatened or
contemplated by the Commission at or prior to the Closing Date; (ii) to the
knowledge of the Company no order suspending the effectiveness of the
Registration Statement or the qualification or registration of the Securities
under the securities or Blue Sky laws of any jurisdiction shall be in effect and
no proceeding for such purpose shall be pending or, to the knowledge of the
Company, threatened or contemplated by the authorities of any jurisdiction;
(iii) any request for additional information on the part of the staff of the
Commission or any such authorities shall have been complied with to the
satisfaction of the staff of the Commission or such authorities; (iv) after the
date hereof, no amendment or supplement to the Registration Statement or the
Prospectus shall have been filed unless a copy thereof was first submitted to
you and you did not object thereto in good faith; and (v) all of the
representations and warranties of the Company contained in this Agreement shall
be true and correct in all material respects (except for such representations
and warranties qualified by materiality, which representations and warranties
shall be true and correct in all respects) on and as of the date hereof and on
and as of the Closing Date, as if made on and as of the Closing Date, and you
shall have received a certificate, dated the Closing Date and signed by the
chief executive officer and the chief financial officer of the Company (or such
other officers as are acceptable to you) to the effect set forth in this Section
6(g) and in Sections 6(b) and 6(i) hereof.

 

(h) You shall have received on the Closing Date a certificate of the Company
signed by the Secretary of the Company, dated the Closing Date certifying: (i)
that each of the Company’s articles of incorporation and bylaws is true and
complete, has not been modified and is in full force and effect; (ii) that the
resolutions of the Company’s board of directors relating to the offering of the
Securities are in full force and effect and have not been modified; and (iii) as
to the incumbency of the officers of the Company. The documents referred to in
such certificate shall be attached to such certificate.

 

(i) The Company shall not have failed in any material respect at or prior to the
Closing Date to have performed or complied with any of its agreements herein
contained and required to be performed or complied with by it hereunder at or
prior to the Closing Date.

 

(j) The Company shall have furnished or caused to have been furnished to you
such further certificates and documents as you shall have reasonably requested.

 

(k) At or prior to the Closing Date, you shall have received the written Lock-Up
Agreements from each of the individuals set forth on Schedule D.

 

(l) At or prior to the date of this Agreement, you shall have received a letter
from the Corporate Financing Department of FINRA confirming that such Department
has determined to raise no objections with respect to the fairness or
reasonableness of the placement agency terms and arrangements of the offering
contemplated hereby.

 

15 

 

 

(n) The Company shall have entered into Securities Purchase Agreement with each
of the Purchasers and such agreements shall be in full force and effect.

 

(o) The Company shall have filed the Certificate of Designation with the
Secretary of State of the State of Nevada.

 

(p) The Company shall have furnished to the Representative such further
information, good standing certificates of the Company, opinions, certificates
(including a Secretary’s Certificate), letters or such other documents as the
Representative 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 Agents.

 

7. INDEMNIFICATION AND CONTRIBUTION.

 

Subject to the limitations in this paragraph below, the Company agrees to
indemnify and hold harmless you and each other Placement Agent, the directors,
officers, employees and agents of each Placement Agent, and each person, if any,
who controls any Placement Agent within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act (collectively, the “Placement Agent Indemnified
Parties,” and each a “Placement Agent Indemnified Party”) from and against any
and all losses, claims, damages, liabilities and expenses, including reasonable
costs of investigation and attorneys’ fees and expenses (collectively,
“Damages”) arising out of or based upon (i) any untrue statement or alleged
untrue statement of a material fact contained in any Preliminary Prospectus, in
the Registration Statement, the Time of Sale Information, any Issuer Free
Writing Prospectus or the Prospectus or in any amendment or supplement thereto,
or any omission or alleged omission to state therein a 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, except to the extent
that any such Damages arise out of or are based upon an untrue statement or
omission or alleged untrue statement or omission that has been made therein or
omitted therefrom in reliance upon and in conformity with the Placement Agents’
Information or (ii) any inaccuracy in or breach of the representations and
warranties of the Company contained herein or any failure of the Company to
perform its obligations hereunder or under law; provided, however, that with
respect to any untrue statement or omission made in any Preliminary Prospectus,
the indemnity agreement contained in this paragraph shall not inure to the
benefit of any Placement Agent (or to the benefit of any person controlling such
Placement Agent or to any officer, director, employee or agent of any Placement
Agent) if both (A) such Placement Agent failed to deliver a copy of the Time of
Sale Information to the person asserting such Damages at or prior to the written
confirmation of the sale of such Securities to such person as required by the
Act and (B) the untrue statement or omission in the Preliminary Prospectus was
corrected in the Time of Sale Information. This indemnification shall be in
addition to any liability that the Company may otherwise have.

 

If any action or claim shall be brought against any Placement Agent or any
person controlling any Placement Agent in respect of which indemnity may be
sought against the Company, such Placement Agent or such controlling person
shall promptly notify in writing the party(s) against whom indemnification is
being sought (the “indemnifying party” or “indemnifying parties”), and such
indemnifying party(s) shall assume the defense thereof, including the employment
of counsel reasonably acceptable to such Placement Agent or such controlling
person and the payment of all reasonable fees of and expenses incurred by such
counsel. Such Placement Agent or any such controlling person shall have the
right to employ separate counsel in any such action and participate in the
defense thereof, but the fees and expenses of such counsel shall be at the
expense of such Placement Agent or such controlling person, unless (i) the
indemnifying party(s) has (have) agreed in writing to pay such fees and
expenses, (ii) the indemnifying party(s) has (have) failed to assume the defense
and employ counsel reasonably acceptable to the Placement Agent or such
controlling person or (iii) the named parties to any such action (including any
impleaded parties) include both such Placement Agent or such controlling person
and the indemnifying party(s), and such Placement Agent or such controlling
person shall have been advised by its counsel that one or more legal defenses
may be available to the Placement Agent that may not be available to the
Company, or that representation of such indemnified party and any indemnifying
party(s) by the same counsel would be inappropriate under applicable standards
of professional conduct (whether or not such representation by the same counsel
has been proposed) due to actual or potential differing interests between them
(in which case the indemnifying party(s) shall not have the right to assume the
defense of such action on behalf of such Placement Agent or such controlling
person (but the Company shall not be liable for the fees and expenses of more
than one counsel for the Placement Agents and such controlling persons)). The
indemnifying party(s) shall not be liable for any settlement of any such action
effected without its (their several) written consent, but if settled with such
written consent, or if there be a final judgment for the plaintiff in any such
action, the indemnifying party(s) agree(s) to indemnify and hold harmless any
Placement Agent and any such controlling person from and against any loss,
claim, damage, liability or expense by reason of such settlement or judgment,
but in the case of a judgment only to the extent stated in the first paragraph
of this Section 7.

 

16 

 

 

Each Placement Agent agrees, severally and not jointly, to indemnify and hold
harmless the Company, its directors, its officers who sign the Registration
Statement and any person who controls the Company within the meaning of Section
15 of the Act or Section 20 of the Exchange Act (collectively, the “Company
Indemnified Parties,” and each a “Company Indemnified Party”), to the same
extent as the foregoing several indemnity from the Company to each Placement
Agent, but only with respect to information furnished in writing by or on behalf
of such Placement Agent through you expressly for use in the Registration
Statement, the Prospectus, the Time of Sale Information, any Issuer Free Writing
Prospectus or any Preliminary Prospectus, or any amendment or supplement
thereto. If any action or claim shall be brought or asserted against the
Company, any of its directors, any of its officers or any such controlling
person based on the Registration Statement, the Prospectus, the Time of Sale
Information or any Preliminary Prospectus, or any amendment or supplement
thereto, and in respect of which indemnity may be sought against any Placement
Agent pursuant to this paragraph, such Placement Agent shall have the rights and
duties given to the Company by the immediately preceding paragraph (except that
if the Company shall have assumed the defense thereof such Placement Agent shall
not be required to do so, but may employ separate counsel therein and
participate in the defense thereof, but the fees and expenses of such counsel
shall be at such Placement Agent’s expense), and the Company, its directors, any
such officers and any such controlling persons, shall have the rights and duties
given to the Placement Agents by the immediately preceding paragraph.

 

In any event, the Company will not, without the prior written consent of the
Representative, settle or compromise or consent to the entry of any judgment in
any proceeding or threatened claim, action, suit or proceeding in respect of
which indemnification may be sought hereunder (whether or not the Representative
or any person who controls the Representative within the meaning of Section 15
of the Act or Section 20 of the Exchange Act is a party to such claim, action,
suit or proceeding) unless such settlement, compromise or consent includes an
unconditional release of all Placement Agents and such controlling persons from
all liability arising out of such claim, action, suit or proceeding.

 

If the indemnification provided for in this Section 7 is unavailable or
insufficient for any reason whatsoever to an indemnified party in respect of any
Damages referred to herein, then an indemnifying party, in lieu of indemnifying
such indemnified party, shall contribute to the amount paid or payable by such
indemnified party as a result of such Damages (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company on the one
hand, and the Placement Agents on the other hand, from the offering and sale of
the Securities or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above but also the relative
and several fault of the Company on the one hand, and the Placement Agents on
the other hand, in connection with the statements or omissions that resulted in
such Damages as well as any other relevant equitable considerations. The
relative and several benefits received by the Company on the one hand, and the
Placement Agents on the other hand, shall be deemed to be in the same proportion
as the total net proceeds from the offering (before deducting expenses) received
by the Company bear to the total fees and commissions received by the Placement
Agents, 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
Agents on the other hand, shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company on the one hand, or by the Placement Agents on the other
hand and the parties’ relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.

 

17 

 

 

The Company and the Placement Agents agree that it would not be just and
equitable if contribution pursuant to this Section 7 was determined by a pro
rata allocation (even if the Placement Agents were treated as one entity for
such purpose) or by any other method of allocation that does not take into
account the equitable considerations referred to in the immediately preceding
paragraph. The amount paid or payable by an indemnified party as a result of the
Damages referred to in the immediately preceding paragraph shall be deemed to
include, subject to the limitations set forth above, any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of this
Section 7, in no event shall any indemnity by any Placement Agent under this
Section 7 exceed the total fees and commission received by such Placement Agent
in connection with the Offering. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation.

 

Any Damages for which an indemnified party is entitled to indemnification or
contribution under this Section 7 shall be paid by the indemnifying party to the
indemnified party as Damages are incurred after receipt of reasonably itemized
invoices therefor. The indemnity, contribution and reimbursement agreements
contained in this Section 7 and the representations and warranties of the
Company set forth in this Agreement shall remain operative and in full force and
effect, regardless of (i) any investigation made by or on behalf of any
Placement Agent or any person controlling any Placement Agent, the Company, its
directors or officers or any person controlling the Company, (ii) acceptance of
any Securities and payment therefor hereunder and (iii) any termination of this
Agreement. A successor to any Placement Agent or any person controlling any
Placement Agent, or to the Company, its directors or officers or any person
controlling the Company, shall be entitled to the benefits of the indemnity,
contribution and reimbursement agreements contained in this Section 7.

 

8. TERMINATION. This Agreement shall be subject to termination in your absolute
discretion, without liability on the part of any Placement Agent to the Company,
by notice to the Company, if prior to the Closing Date, in your sole judgment,
(i) trading in the Company’s Common Stock shall have been suspended by the
Commission or quotation of the Company’s Common Stock shall have been suspended
by the OTCBB, (ii) quotation in securities generally on the OTCBB or trading in
securities generally on the New York Stock Exchange or the NASDAQ Stock Market
shall have been suspended or materially limited, or minimum or maximum prices
shall have been generally established on such quotations service or exchange, or
additional material governmental restrictions, not in force on the date of this
Agreement, shall have been imposed upon trading in securities generally by any
such exchange or the OTCBB or by order of the Commission or any court or other
governmental authority, (iii) a general moratorium on commercial banking
activities shall have been declared by either federal or New York State
authorities or (iv) there shall have occurred any outbreak or escalation of
hostilities or other international or domestic calamity, crisis or change in
political, financial or economic conditions or other material event the effect
of which on the financial markets of the United States is such as to make it, in
your judgment, impracticable or inadvisable to market the Securities or to
enforce contracts for the sale of the Securities. Notice of such cancellation
shall be promptly given to the Company and its counsel by telegraph, telecopy or
telephone and shall be subsequently confirmed by letter.

 

9. REIMBURSEMENT OF PLACEMENT AGENTS’ EXPENSES. Notwithstanding anything to the
contrary in this Agreement, if (a) this Agreement shall have been terminated
pursuant to Section 8, (b) the Company shall fail to tender the Units for
delivery to the Purchasers for any reason not permitted under this Agreement,
(c) the Purchasers shall decline to purchase the Units for any reason permitted
under the Securities Purchase Agreement or (d) the sale of the Units is not
consummated because any condition to the obligations of the Placement Agents 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 out-of-pocket expenses in accordance with Section 5, the Company
shall reimburse the Placement Agents for the fees and expenses of the Placement
Agents’ counsel and for such other accountable out-of-pocket expenses as shall
have been reasonably incurred by them in connection with this Agreement and the
proposed purchase of the Securities, and upon demand the Company shall pay the
full amount thereof to the Representative on behalf of the Placement Agents.

 

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

 

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

 

18 

 

 

(b) the price of the Units set forth in this Agreement was established by the
Company following discussions and arms-length negotiations with the
Representative, 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 Ladenburg and Trout, and each of their affiliates,
are engaged in a broad range of transactions which may involve interests that
differ from those of the Company and that the Placement Agents have no
obligation to disclose such interests and transactions to the Company by virtue
of any fiduciary, advisory or agency relationship; and

 

(d) it waives, to the fullest extent permitted by law, any claims it may have
against the Placement Agents for breach of fiduciary duty or alleged breach of
fiduciary duty and agrees that the Placement Agents 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 stockholders, employees or creditors of the Company.

 

11. SUCCESSORS; PERSONS ENTITLED TO BENEFIT OF AGREEMENT. This Agreement shall
inure to the benefit of and be binding upon the several Placement Agents, the
Company, and their respective successors and assigns. Notwithstanding the
foregoing, the determination as to whether any condition in Section 6 hereof
shall have been satisfied, and the waiver of any condition in Section 6 hereof,
may be made by the Representative in its sole discretion, and any such
determination or waiver shall be binding on each of the Placement Agents and
shall not require the consent of any Placement Agent. 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 several indemnities of the Placement
Agents shall be for the benefit of the Company Indemnified Parties. It is
understood that each Placement Agent’s responsibility to the Company is solely
contractual in nature and the Placement Agents do not owe the Company, or any
other party, any fiduciary duty as a result of this Agreement.

 

12. SURVIVAL OF INDEMNITIES, REPRESENTATIONS, WARRANTIES, ETC. The respective
indemnities, covenants, agreements, representations, warranties and other
statements of the Company and the several Placement Agents, 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 any Placement Agent, the Company 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 Section 8, the payment obligations contained in Section 5, the
indemnity and contribution and reimbursement agreements contained in Sections 7
and 9 and the covenants, representations, warranties set forth in this Agreement
shall not terminate and shall remain in full force and effect at all times.

 

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

 

(a) if to the Representative, shall be delivered or sent by mail, facsimile
transmission or email to Ladenburg Thalmann & Co. Inc., 570 Lexington Avenue,
11th Floor, New York, New York 10022, Attention: Managing Director, Legal, with
a copy to Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C., Chrysler Center,
666 Third Avenue, New York, New York 10017, Attention: Ivan K. Blumenthal, Esq.;
and

 

(b) if to the Company, shall be delivered or sent by mail, facsimile
transmission or email to: Ekso Bionics Holdings, Inc., 1414 Harbour Way South,
Suite 1201, Richmond, California 94804, Attention: Nathan Harding, Chief
Executive Officer, with a copy to Nutter McClennen & Fish LLP, Seaport West, 155
Seaport Blvd., Boston, Massachusetts 02210-2604, Attention: Michelle Basil

 

provided, however, that any notice to the Placement Agents pursuant to Section 7
shall be delivered or sent by mail or facsimile transmission to the
Representative c/o Ladenburg Thalmann & Co. Inc. at the address set forth above
in this Section 13. 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.

 

19 

 

 

14. DEFINITION OF CERTAIN TERMS. For purposes of this Agreement, (a) “business
day” means any day on which the New York Stock Exchange, Inc. is open for
trading, (b) “knowledge” means the actual knowledge of the directors and
officers of the Company after reasonable inquiry and (c) “subsidiary” has the
meaning set forth in Rule 405 of the Rules and Regulations.

 

15. 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 Agents each hereby consent to the
jurisdiction of such courts and personal service with respect thereto. The
Company and the Placement Agents 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 Agents and may be
enforced in any other courts in the jurisdiction of which the Company is or may
be subject, by suit upon such judgment. 

 

16. 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.

 

17. 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 Representative.

 

18. RESEARCH ANALYST INDEPENDENCE. The Company acknowledges that each Placement
Agent’s research analysts and research departments are required to be
independent from its investment banking division and are subject to certain
regulations and internal policies, and that such Placement Agent’s research
analysts may hold views and make statements or investment recommendations and/or
publish research reports with respect to the Company and/or the Offering that
differ from the views of their investment banking division. The Company hereby
waives and releases, to the fullest extent permitted by law, any claims that the
Company may have against either Placement Agent with respect to any conflict of
interest that may arise from the fact that the views expressed by its
independent research analysts and research departments may be different from or
inconsistent with the views or advice communicated to the Company by such
Placement Agent’s investment banking division. The Company acknowledges that
each Placement Agent is a full service securities firm and as such from time to
time, subject to applicable securities laws, rules and regulations, may effect
transactions for its own account or the account of its customers and hold long
or short positions in debt or equity securities of the Company; provided,
however, that nothing in this Section 18 shall relieve either Placement Agent of
any responsibility or liability it may otherwise bear in connection with
activities in violation of applicable securities laws, rules or regulations.

 

19. EFFECTIVENESS. This Agreement shall become effective upon the execution and
delivery hereof by the parties hereto.

 

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.

 

20 

 

 

If the foregoing is in accordance with your understanding of the agreement
between the Company and the Placement Agents, kindly indicate your acceptance in
the space provided for that purpose below.

 

  Very truly yours,       EKSO BIONICS HOLDINGS, INC.         By: /s/ Max
Scheder-Bieschin     Name: Max Scheder-Bieschin             Title: Chief
Financial Officer

 

Confirmed as of the date first

above mentioned, on behalf of

themselves and the Placement Agents

named in Schedule C hereto:

      LADENBURG THALMANN & CO. INC.         By: /s/ David J. Strupp Jr.    
Name: David J. Strupp Jr.           Title: Managing Director

 

 

[Signature page to Placement Agency Agreement]

 

21 

 

 

SCHEDULE A

 

General Use Free Writing Prospectuses

 

None.

 

22 

 

 

SCHEDULE B

 

Pricing Information

 

Number of Shares of Preferred Stock to be Issued: 15,000

 

Number of Shares of Common Stock Issuable Upon Exercise of All Warrants:
14,851,486

 

Number of Shares of Common Stock Issuable Upon Exercise of each Warrant: 990.1

 

Offering Price: $1,000 per unit

 

Conversion Price: $1.01 per share

 

Warrant Exercise Price: $1.25 per share

 

 23

 

 

 

 

SCHEDULE C

 

PLACEMENT AGENT  NUMBER OF UNITS PLACED        LADENBURG THALMANN & CO. INC. 
 12,900  TROUT CAPITAL LLC  2,100         TOTAL:   15,000 

 

 24

 

 

SCHEDULE D

 

Steve Sherman

Nathan Harding

Dan Boren

Marilyn Hamilton

Jack Peurach

Stanley Stern

Amy Wendell

Max Scheder-Bieschin

Thomas Looby

Russ Angold

 

 25

 

 

EXHIBIT A

 

Form of Securities Purchase Agreement

 

 26

 

 

EXHIBIT B

 

Form of Warrant

 

 27

 

 

EXHIBIT C

  

Form of Lock-up Agreement

 

December __, 2015

 

EKSO BIONICS HOLDINGS, INC.

1414 Harbour Way South

Suite 1201

Richmond, CA 94804

 

LADENBURG THALMANN & CO. INC.

As Representative of the Placement Agents

c/o Ladenburg Thalmann & Co. Inc.

570 Lexington Avenue, 11th Floor

New York, NY 10022

 

Re:Ekso Bionics Holdings, Inc. (the "Company”) - Restriction on Stock Sales

 

Dear Sirs:

 

This letter is delivered to you pursuant to the Placement Agency Agreement (the
“Placement Agency Agreement”) to be entered into by the Company, as issuer, and
Ladenburg Thalmann & Co. Inc., the representative (the “Representative”) of
certain placement agents (the “Placement Agents”) to be named therein. Upon the
terms and subject to the conditions of the Placement Agency Agreement, the
Placement Agents intend to effect a public offering of units (the “Units”) each
consisting of one share of Convertible Preferred Stock, par value $0.001 per
share, of the Company and a warrant to purchase shares of the Company’s Common
Stock, par value $0.001 per share, as described in and contemplated by the
registration statement of the Company on Form S-3, File No. 333-205168 (the
“Registration Statement”), as filed with the Securities and Exchange Commission
on June 23, 2015 (the “Offering”).

 

The undersigned recognizes that it is in the best financial interests of the
undersigned, as an officer or director, or an owner of stock, options, warrants
or other securities of the Company (the “Company Securities”), that the Company
complete the proposed Offering.

 

The undersigned further recognizes that the Company Securities held by the
undersigned are, or may be, subject to certain restrictions on transferability,
including those imposed by United States federal securities laws.
Notwithstanding these restrictions, the undersigned has agreed to enter into
this letter agreement to further assure the Placement Agents that the Company
Securities of the undersigned, now held or hereafter acquired, will not enter
the public market at a time that might impair the placement effort.

 

 28

 

 

Therefore, as an inducement to the Placement Agents to execute the Placement
Agent Agreement, the undersigned hereby acknowledges and agrees that the
undersigned will not (i) offer, sell, contract to sell, pledge, grant any option
to purchase or otherwise dispose of (collectively, a “Disposition”) any Company
Securities, or any securities convertible into or exercisable or exchangeable
for, or any rights to purchase or otherwise acquire, any Company Securities held
by the undersigned or acquired by the undersigned after the date hereof, or that
may be deemed to be beneficially owned by the undersigned (collectively, the
“Lock-Up Shares”), pursuant to the Rules and Regulations promulgated under the
Securities Act of 1933, as amended (the “Act”), and the Securities Exchange Act
of 1934, as amended, for a period commencing on the date hereof and ending 90
days after the date of the Company’s Prospectus for the Offering first filed
pursuant to Rule 424(b) under the Act, inclusive (the “Lock-Up Period”), without
the prior written consent of Ladenburg Thalmann & Co. Inc. or (ii) exercise or
seek to exercise or effectuate in any manner any rights of any nature that the
undersigned has or may have hereafter to require the Company to register under
the Act the undersigned’s sale, transfer or other disposition of any of the
Lock-Up Shares or other securities of the Company held by the undersigned, or to
otherwise participate as a selling securityholder in any manner in any
registration effected by the Company under the Act, including under the
Registration Statement, during the Lock-Up Period. The foregoing restrictions
are expressly agreed to preclude the undersigned from engaging in any hedging,
collar (whether or not for any consideration) or other transaction that is
designed to or reasonably expected to lead or result in a Disposition of Lock-Up
Shares during the Lock-Up Period, even if such Lock-Up Shares would be disposed
of by someone other than such holder. Such prohibited hedging or other
transactions would include any short sale or any purchase, sale or grant of any
right (including any put or call option or reversal or cancellation thereof)
with respect to any Lock-Up Shares or with respect to any security (other than a
broad-based market basket or index) that includes, relates to or derives any
significant part of its value from Lock-Up Shares.

 

Notwithstanding the agreement not to make any Disposition during the Lock-Up
Period, you have agreed that the foregoing restrictions shall not apply to:

 

(1)the Company Securities being offered in the prospectus included in the
Registration Statement;

(2)any grant or exercise of options pursuant to the Company’s Amended and
Restated 2014 Equity Incentive Plan;

(3)the exercise of currently outstanding warrants to purchase Company
Securities;

(4)any transaction relating to Company Securities acquired in open market
transactions after the completion of the Offering;  (5)any transfer of Company
Securities as a bona fide gift;

(6)any transfer of Company Securities to a trust for the direct or indirect
benefit of the undersigned or one or more members of the undersigned’s immediate
family (which for purposes of this lock-up agreement shall mean any relationship
by blood, marriage or adoption, not more remote than first cousin); or

(7)any transfer of Company Securities by will or intestate succession upon the
death of the undersigned;

 

provided that in the case of any transfer or distribution pursuant to clause
(5), (6), or (7), each donee, trustee distributee, or other transferee, as the
case may be, shall sign and deliver a lock-up letter substantially in the form
of this letter for the balance of the Lock-up Period.

 

 29

 

 

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 Act, 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 Lock-Up Shares. In
order to enable the aforesaid covenants to be enforced, the undersigned hereby
authorizes the Company, and any duly appointed transfer agent for the
registration or transfer of the shares of Common Stock, securities convertible
into or exercisable or exchangeable for Common Stock or Lock-Up Shares, to
decline to make any transfer of securities if such transfer would constitute a
violation or breach of this letter agreement.

 

It is understood that, if the Placement Agent Agreement (other than the
provisions thereof that survive termination) shall terminate or be terminated
prior to payment for and delivery of the Units, this letter agreement shall
automatically terminate.

 

Capitalized terms used but not defined herein have the respective meanings
assigned to such terms in the Placement Agent Agreement.

 

[Rest of page intentionally left blank.]

 

 30

 

 

 

This letter shall be binding on the undersigned and the respective successors,
heirs, personal representatives and assigns of the undersigned.

 

  Very truly yours,       Signature of Securityholder

 

 

 31