Document:

bioc-ex102_10.htm

Exhibit 10.2

 

September 20, 2018

 

Mr. Michael W. Nall

Chief Executive Officer and President

Biocept, Inc.

5810 Nancy Ridge Drive

San Diego, CA 92121

 

Dear Mr. Nall:

 

This letter (the “Agreement”) constitutes the agreement between Maxim Group LLC (“Maxim”), Dawson James Securities, Inc. (“DJ” and together with Maxim, the “Placement Agents”) and Biocept, Inc., a company incorporated under the laws of the State of Delaware (the “Company”), pursuant to which the Placement Agents shall serve as the placement agents for the Company, on a “reasonable best efforts” basis, in connection with the proposed placement (the “Placement”) of common stock (the “Shares”) of the Company, par value $0.0001 per share (“Common Stock”), pre-funded warrants to purchase Common Stock (the “Pre-Funded Warrants”) and Series A warrants to purchase Common Stock (the “Series A Warrants” and, together with the Pre-Funded Warrants, “the “Warrants,” and the Warrants, collectively with the Shares, the “Securities”). The terms of the Placement and the Securities shall be mutually agreed upon by the Company and the purchasers (each, a “Purchaser” and collectively, the “Purchasers”) and nothing herein constitutes that the Placement Agents would have the power or authority to bind the Company or any Purchaser or an obligation for the Company to issue any Securities or complete the Placement. This Agreement and the documents executed and delivered by the Company and the Purchasers in connection with the Placement, including but not limited to the Purchase Agreement (as defined below) shall be collectively referred to herein as the “Transaction Documents.” The date of the closing of the Placement shall be referred to herein as the “Closing Date.”  The Company expressly acknowledges and agrees that the Placement Agents’ obligations hereunder are on a reasonable best efforts basis only and that the execution of this Agreement does not constitute a commitment by the Placement Agents to purchase the Securities and does not ensure the successful placement of the Securities or any portion thereof or the success of the Placement Agents’ with respect to securing any other financing on behalf of the Company. Following the prior written consent of the Company, the Placement Agents may retain other brokers or dealers to act as sub-agents or selected-dealers on its behalf in connection with the Placement.  The sale of the Securities to any Purchaser will be evidenced by a securities purchase agreement (the “Purchase Agreement”) between the Company and such Purchaser in a form reasonably acceptable to the Company and the Placement Agents.  Capitalized terms that are not otherwise defined herein have the meanings given to such terms in the Purchase Agreement.  Prior to the signing of any Purchase Agreement, officers of the Company will be available to answer inquiries from prospective Purchasers.

 

SECTION 1.REPRESENTATIONS AND WARRANTIES OF THE COMPANY; COVENANTS OF THE COMPANY. 

 

A.Representations of the Company.  Each of the representations and warranties (together with any related disclosure schedules thereto) and covenants made by the Company to the Purchasers in the Purchase Agreement in connection with the Placement is hereby incorporated herein by reference into this Agreement (as though fully restated herein) and is, as of the date of this Agreement and as of the Closing Date, hereby made to, and in favor of, the Placement Agents. In addition to the foregoing, the Company represents and warrants that:

 

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1.The Company has prepared and filed with the Commission a registration statement on Form S-3 (Registration No. 333-224946), and amendments thereto, and related preliminary prospectuses, for the registration under the Securities Act of 1933, as amended (the “Securities Act”), of the Shares and the Pre-Funded Warrants, which registration statement, as so amended (including post-effective amendments, if any) became effective on May 24, 2018.  At the time of such filing, the Company met the requirements of Form S-3 under the Securities Act. Such registration statement meets the requirements set forth in Rule 415(a)(1)(x) under the Securities Act and complies with said Rule. The Company will file with the Commission pursuant to Rule 424(b) under the Securities Act, and the rules and regulations (the “Rules and Regulations”) of the Commission promulgated thereunder, a supplement to the form of prospectus included in such registration statement relating to the placement of the Shares and Pre-Funded Warrants and the plan of distribution thereof and has advised the Placement Agents of all further information (financial and other) with respect to the Company required to be set forth therein. Such registration statement, including the exhibits thereto, as amended at the date of this Agreement, is hereinafter called the “Registration Statement”; such prospectus in the form in which it appears in the Registration Statement is hereinafter called the “Base Prospectus”; and the supplemented form of prospectus, in the form in which it will be filed with the Commission pursuant to Rule 424(b) (including the Base Prospectus as so supplemented) is hereinafter called the “Prospectus Supplement.” Any reference in this Agreement to the Registration Statement, the Base Prospectus or the Prospectus Supplement shall be deemed to refer to and include the documents incorporated by reference therein (the “Incorporated Documents”) pursuant to Item 12 of Form S-3 which were filed under the Exchange Act on or before the date of this Agreement, or the issue date of the Base Prospectus or the Prospectus Supplement, as the case may be; and any reference in this Agreement to the terms “amend,” “amendment” or “supplement” with respect to the Registration Statement, the Base Prospectus or the Prospectus Supplement shall be deemed to refer to and include the filing of any document under the Exchange Act after the date of this Agreement, or the issue date of the Base Prospectus or the Prospectus Supplement, as the case may be, deemed to be incorporated therein by reference. All references in this Agreement to financial statements and schedules and other information which is “contained,” “included,” “described,” “referenced,” “set forth” or “stated” in the Registration Statement, the Base Prospectus or the Prospectus Supplement (and all other references of like import) shall be deemed to mean and include all such financial statements and schedules and other information which is or is deemed to be incorporated by reference in the Registration Statement, the Base Prospectus or the Prospectus Supplement, as the case may be. No stop order suspending the effectiveness of the Registration Statement or the use of the Base Prospectus or the Prospectus Supplement has been issued, and no proceeding for any such purpose is pending or has been initiated or, to the Company's knowledge, is threatened by the Commission. For purposes of this Agreement, “free writing prospectus” has the meaning set forth in Rule 405 under the Securities Act and the “Time of Sale Prospectus” means the preliminary prospectus, if any, together with the free writing prospectuses, if any, used in connection with the Placement, including any documents incorporated by reference therein.

 

2.The Registration Statement (and any further documents to be filed with the Commission) contains all exhibits and schedules as required by the Securities Act. Each of the Registration Statement and any post-effective amendment thereto, at the time it became effective, complied in all material respects with the Securities Act and the Exchange Act and the applicable Rules and Regulations and did not and, as amended or supplemented, if applicable, will not, contain any 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. The Base Prospectus, the Time of Sale Prospectus and the Prospectus Supplement, each as of its respective date, comply in all material respects with the Securities Act and the Exchange Act and the applicable Rules and Regulations. Each of the Base Prospectus, the Time of Sale Prospectus and the Prospectus Supplement, as amended or supplemented, did not and will not contain as of the date thereof any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. The Incorporated Documents, when they were filed with the Commission, conformed in all material 

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respects to the requirements of the Exchange Act and the applicable Rules and Regulations, and none of such documents, when they were filed with the Commission, contained any untrue statement of a material fact or omitted to state a material fact necessary to make the statements therein (with respect to Incorporated Documents incorporated by reference in the Base Prospectus or Prospectus Supplement), in the light of the circumstances under which they were made not misleading; and any further documents so filed and incorporated by reference in the Base Prospectus, the Time of Sale Prospectus or Prospectus Supplement, when such documents are filed with the Commission, will conform in all material respects to the requirements of the Exchange Act and the applicable Rules and Regulations, as applicable, and will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. No post-effective amendment to the Registration Statement reflecting any facts or events arising after the date thereof which represent, individually or in the aggregate, a fundamental change in the information set forth therein is required to be filed with the Commission. There are no documents required to be filed with the Commission in connection with the transaction contemplated hereby that (x) have not been filed as required pursuant to the Securities Act or (y) will not be filed within the requisite time period. There are no contracts or other documents required to be described in the Base Prospectus, the Time of Sale Prospectus or Prospectus Supplement, or to be filed as exhibits or schedules to the Registration Statement, which (x) have not been described or filed as required or (y) will not be filed within the requisite time period.

 

3.The Company is eligible to use free writing prospectuses in connection with the Placement pursuant to Rules 164 and 433 under the Securities Act. Any free writing prospectus that the Company is required to file pursuant to Rule 433(d) under the Securities Act has been, or will be, filed with the Commission in accordance with the requirements of the Securities Act and the applicable rules and regulations of the Commission thereunder. Each free writing prospectus that the Company has filed, or is required to file, pursuant to Rule 433(d) under the Securities Act or that was prepared by or behalf of or used by the Company complies or will comply in all material respects with the requirements of the Securities Act and the applicable rules and regulations of the Commission thereunder. The Company will not, without the prior consent of the Placement Agents, prepare, use or refer to, any free writing prospectus.

 

4.No registration under the Securities Act is required for the offer and sale of the Series A Warrants or the Series A Warrant Shares by the Company to the Purchasers as contemplated hereby

 

5.There are no affiliations with any FINRA member firm among the Company's officers, directors or, to the knowledge of the Company, any five percent (5.0%) or greater stockholder of the Company, except as set forth in the Registration Statement and SEC Reports.

 

B.Covenants of the Company. The Company has delivered, or will as promptly as practicable deliver, to the Placement Agents complete conformed copies of the Registration Statement and of each consent and certificate of experts, as applicable, filed as a part thereof, and conformed copies of the Registration Statement (without exhibits), the Base Prospectus, the Time of Sale Prospectus and the Prospectus Supplement, as amended or supplemented, in such quantities and at such places as the Placement Agent reasonably requests. Neither the Company nor any of its directors and officers has distributed and none of them will distribute, prior to the Closing Date, any offering material in connection with the offering and sale of the Securities pursuant to the Placement other than the Base Prospectus, the Time of Sale Prospectus, the Prospectus Supplement, the Registration Statement, copies of the documents incorporated by reference therein and any other materials permitted by the Securities Act.

 

SECTION 2.       REPRESENTATIONS OF THE PLACEMENT AGENTS. Each of the Placement Agents, severally and not jointly, represents and warrants that it (i) is a member in good standing of FINRA, 

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(ii) is registered as a broker/dealer under the Exchange Act, (iii) is licensed as a broker/dealer under the laws of the States applicable to the offers and sales of the Securities by such Placement Agent, (iv) is and will be a body corporate validly existing under the laws of its place of incorporation, and (v) has full power and authority to enter into and perform its obligations under this Agreement. Each Placement Agent will immediately notify the Company in writing of any change in its status as such. Each of the Placement Agents, severally and not jointly, covenants that it will use its reasonable best efforts to conduct the Placement hereunder in compliance with the provisions of this Agreement and the requirements of applicable law.  

 

SECTION 3.        COMPENSATION.  In consideration of the services to be provided for hereunder, the Company shall pay to the Placement Agents or their respective designees their pro rata portion (based on the Securities placed) of the following compensation with respect to the Securities which they are placing:

 

A.A cash fee (the “Cash Fee”) equal to an aggregate of seven percent (7%) of the aggregate gross proceeds raised in the Placement, which Cash Fee is payable seventy-five percent (75%) to Maxim and twenty-five percent (25%) to DJ.  The Cash Fee shall be paid at the Closing of the Placement. 

 

B.Subject to compliance with FINRA Rule 5110(f)(2)(D), the Company also agrees to reimburse the Placement Agents for all travel and other out-of-pocket expenses, including the reasonable fees, costs and disbursements of its legal counsel, in an amount not to exceed an aggregate of $50,000, of which $25,000 has been paid to the Placement Agents as an advance against expenses (the “Advance”). The Company will reimburse Placement Agents directly out of the Closing of the Placement.  In the event this Agreement shall terminate prior to the consummation of the Placement, the Placement Agents shall be entitled to reimbursement for actual expenses; provided, however, such expenses shall not exceed $25,000.  Any unused portion of the Advance delivered to Maxim will be returned to the Company to the extent not actually incurred.

 

C.Each Placement Agent reserves the right to reduce any item of its compensation or adjust the terms thereof as specified herein in the event that a determination shall be made by FINRA to the effect that such Placement Agent’s aggregate compensation is in excess of FINRA Rules or that the terms thereof require adjustment.

 

SECTION 4.       INDEMNIFICATION. The Company agrees to the indemnification and other agreements set forth in the Indemnification Provisions (the “Indemnification”) attached hereto as Addendum A, the provisions of which are incorporated herein by reference and shall survive the termination or expiration of this Agreement.

 

SECTION 5.       ENGAGEMENT TERM. The Placement Agents’ engagement hereunder shall be until the earlier of (i) the final closing date of the Placement and (ii) the date a party terminates the engagement according to the terms of the next sentence (such date, the “Termination Date” and the period of time during which this Agreement remains in effect is referred to herein as the “Term”).  After an initial period of three (3) month(s) from the date hereof, the engagement may be terminated at any time by either party upon 10 days written notice to the other party, effective upon receipt of written notice to that effect by the other party. If the Company elects to terminate this Agreement for any reason even though the Placement Agents were prepared to proceed with the Placement reasonably within the intent of this Agreement, and if within six (6) months following such termination, the Company completes any financing of equity, equity-linked or debt or other capital raising activity of the Company (other than the exercise by any person or entity of any options, warrants or other convertible securities) with any of the investors contacted by Placement Agents during the term of this Agreement, then the Company will pay the Placement Agents upon the closing of such financing the compensation set forth in Section 3 herein. 

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Notwithstanding anything to the contrary contained herein, the provisions concerning the Company’s obligation to pay any fees actually earned pursuant to Section 3 hereof and the provisions concerning confidentiality, indemnification and contribution contained herein and the Company’s obligations contained in the Indemnification Provisions will survive any expiration or termination of this Agreement. If this Agreement is terminated prior to the completion of the Placement, all fees due to the Placement Agents shall be paid by the Company to the Placement Agents on or before the Termination Date (in the event such fees are earned or owed as of the Termination Date). The Placement Agents each agree, severally and not jointly, not to use any confidential information concerning the Company provided to the Placement Agents by the Company for any purposes other than those contemplated under this Agreement. 

 

SECTION 6.      PLACEMENT AGENT INFORMATION. The Company agrees that any information or advice rendered by the Placement Agents in connection with this engagement is for the confidential use of the Company only in their evaluation of the Placement and, except as otherwise required by law, the Company will not disclose or otherwise refer to the advice or information in any manner without the Placement Agents’ prior written consent.

 

SECTION 7.       NO FIDUCIARY RELATIONSHIP. This Agreement does not create, and shall not be construed as creating rights enforceable by any person or entity not a party hereto, except those entitled hereto by virtue of the Indemnification Provisions hereof. The Company acknowledges and agrees that each Placement Agent is not and shall not be construed as a fiduciary of the Company and shall have no duties or liabilities to the equity holders or the creditors of the Company or any other person by virtue of this Agreement or the retention of such Placement Agent hereunder, all of which are hereby expressly waived.

 

SECTION 8.       CLOSING. The obligations of the Placement Agents, and the closing of the sale of the Securities hereunder are subject to the accuracy, when made and on the Closing Date, of the representations and warranties on the part of the Company and its Subsidiaries contained herein and in the Purchase Agreement, to the accuracy of the statements of the Company and its Subsidiaries made in any certificates pursuant to the provisions hereof, to the performance by the Company and its Subsidiaries of their obligations hereunder, and to each of the following additional terms and conditions, except as otherwise disclosed to and acknowledged and waived by the Placement Agent by the Company:

 

A.No stop order suspending the effectiveness of the Registration Statement shall have been issued and no proceedings for that purpose shall have been initiated or threatened by the Commission, and any request for additional information on the part of the Commission (to be included in the Registration Statement, the Base Prospectus, the Prospectus Supplement or otherwise) shall have been complied with to the reasonable satisfaction of the Placement Agents. Any filings required to be made by the Company in connection with the Placement shall have been timely filed with the Commission.

 

B.The Placement Agents shall not have discovered and disclosed to the Company on or prior to the Closing Date that the Registration Statement, the Base Prospectus, the Prospectus Supplement or any amendment or supplement thereto contains an untrue statement of a fact which, in the opinion of counsel for the Placement Agents, is material or omits to state any fact which, in the opinion of such counsel, is material and is required to be stated therein or is necessary to make the statements therein not misleading.

 

C.All corporate proceedings and other legal matters incident to the authorization, form, execution, delivery and validity of each of this Agreement, the Securities, the Registration Statement, the Base Prospectus and the Prospectus Supplement and all other legal matters relating to this Agreement and the transactions contemplated hereby shall be reasonably satisfactory in all material respects to counsel for the Placement Agents, and the Company shall have furnished to such counsel all documents and information that they may reasonably request to enable them to pass upon such matters.

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D.The Placement Agents shall have received from outside counsel to the Company such counsel’s written opinions, addressed to the Placement Agents and the Purchasers and dated as of the Closing Date, in form and substance reasonably satisfactory to the Placement Agents.

 

E.On the date of this Agreement and on the Closing Date, the Placement Agents shall have received a “comfort” letter from Mayer Hoffman McCann P.C as of each such date, addressed to each of the Placement Agents and in form and substance satisfactory in all respects to the Placement Agents and Placement Agents’ counsel. 

 

F.On the Closing Date, Placement Agents shall have received a certificate of the chief executive officer of the Company, dated, as applicable, as of the date of such Closing, to the effect that, as of the date of this Agreement and as of the applicable date, the representations and warranties of the Company contained herein and in the Purchase Agreement were and are accurate in all material respects, except for such changes as are contemplated by this Agreement and except as to representations and warranties that were expressly limited to a state of facts existing at a time prior to the applicable Closing Date, and that, as of the applicable date, the obligations to be performed by the Company hereunder on or prior thereto have been fully performed in all material respects.

 

G.On the Closing Date, Placement Agents shall have received a certificate of the Secretary of the Company, dated, as applicable, as of the date of such Closing, certifying to the organizational documents, good standing in the state of incorporation of the Company and board resolutions relating to the Placement of the Securities from the Company.

 

H.Neither the Company nor any of its Subsidiaries (i) shall have sustained since the date of the latest audited financial statements included or incorporated by reference in the Registration Statement, the Base Prospectus and the Prospectus Supplement, any loss or interference with its business from fire, explosion, flood, terrorist act or other calamity, whether or not covered by insurance, or from any labor dispute or court or governmental action, order or decree, otherwise than as set forth in or contemplated by the Registration Statement, the Base Prospectus and the Prospectus Supplement, (ii) since such date there shall not have been any change in the capital stock or long-term debt of the Company or any of its Subsidiaries or any change, or any development involving a prospective change, in or affecting the business, general affairs, management, financial position, stockholders' equity, results of operations or prospects of the Company and its Subsidiaries, otherwise than as set forth in or contemplated by the Registration Statement, the Base Prospectus and the Prospectus Supplement, and (iii) since such date there shall not have been any inquiries by the Commission, FINRA or any other regulatory body regarding the Company’s use of blockchain, IOT, cloud analytics, machine learning or other similar technologies, the effect of which, in any such case described in clause (i), (ii) or (iii), is, in the judgment of the Placement Agents, so material and adverse as to make it impracticable or inadvisable to proceed with the sale or delivery of the Securities on the terms and in the manner contemplated by the Base Prospectus, Time of Sale Prospectus and Prospectus Supplement.

 

I.The Common Stock is registered under the Exchange Act and, as of the Closing Date, the Shares and Warrant Shares shall be listed and admitted and authorized for trading on the Trading Market or other applicable U.S. national exchange and satisfactory evidence of such action shall have been provided to the Placement Agents. The Company shall have taken no action designed to, or likely to have the effect of terminating the registration of the Common Stock under the Exchange Act or delisting or suspending from trading the Common Stock from the Trading Market or other applicable U.S. national exchange, nor has the Company received any information suggesting that the Commission or the Trading Market or other U.S. applicable national exchange is contemplating terminating such registration or listing.

 

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

 

K.The Company shall have prepared and filed with the Commission a Current Report on Form 8-K with respect to the Placement, including as an exhibit thereto this Agreement.

 

L.The Company shall have entered into a Purchase Agreement with each of the Purchasers and such agreements shall be in full force and effect and shall contain representations, warranties and covenants of the Company as agreed between the Company and the Purchasers.

 

M.FINRA shall have raised no objection to the fairness and reasonableness of the terms and arrangements of this Agreement. In addition, the Company shall, if requested by the Placement Agents, make or authorize Placement Agents’ counsel to make on the Company’s behalf, any filing with the FINRA Corporate Financing Department pursuant to FINRA Rule 5110 with respect to the Placement and pay all filing fees required in connection therewith.

 

N.Prior to the Closing Date, the Company shall have furnished to the Placement Agents such further information, certificates and documents as the Placement Agents may reasonably request.

 

If any of the conditions specified in this Section 8 shall not have been fulfilled when and as required by this Agreement, or if any of the certificates, opinions, written statements or letters furnished to the Placement Agents or to Placement Agents’ counsel pursuant to this Section 8 shall not be reasonably satisfactory in form and substance to the Placement Agents and to Placement Agents’ counsel, all obligations of the Placement Agents hereunder may be cancelled by the Placement Agents at, or at any time prior to, the consummation of the Closing. Notice of such cancellation shall be given to the Company in writing or orally. Any such oral notice shall be confirmed promptly thereafter in writing.

 

SECTION 9.RIGHT OF FIRST REFUSAL. Upon the Closing of a Placement, for a period of twelve (12) months from the commencement of sales of the offering, the Company grants Maxim the right of first refusal to act as lead managing underwriter and book runner and/or lead placement agent, with at least eighty percent (80%) of the economics, and DJ shall have the right of first refusal to act as a co-placement agent or underwriter or co-manager, with at least twenty percent (20%) of the economics, for any and all future equity, equity-linked or debt (excluding commercial bank debt) offerings undertaken during such period by the Company or any subsidiary of the Company. 

 

SECTION 10.     GOVERNING LAW. This Agreement will be governed by, and construed in accordance with, the laws of the State of New York applicable to agreements made and to be performed entirely in such State. This Agreement may not be assigned by either party without the prior written consent of the other party. This Agreement shall be binding upon and inure to the benefit of the parties hereto, and their respective successors and permitted assigns. Any right to trial by jury with respect to any dispute arising under this Agreement or any transaction or conduct in connection herewith is waived. Any dispute arising under this Agreement may be brought into the courts of the State of New York or into the Federal Court located in New York, New York and, by execution and delivery of this Agreement, the Company hereby accepts for itself and in respect of its property, generally and unconditionally, the jurisdiction of aforesaid courts. Each party hereto hereby irrevocably waives personal service of process and consents to 

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process being served in any such suit, action or proceeding by delivering a copy thereof via overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. If either party shall commence an action or proceeding to enforce any provisions of a Transaction Document, then the prevailing party in such action or proceeding shall be reimbursed by the other party for its attorney's fees and other costs and expenses incurred with the investigation, preparation and prosecution of such action or proceeding. 

  

SECTION 11.     ENTIRE AGREEMENT/MISC. This Agreement (including the attached Indemnification Provisions) embodies the entire agreement and understanding between the parties hereto, and supersedes all prior agreements and understandings, relating to the subject matter hereof. If any provision of this Agreement is determined to be invalid or unenforceable in any respect, such determination will not affect such provision in any other respect or any other provision of this Agreement, which will remain in full force and effect. This Agreement may not be amended or otherwise modified or waived except by an instrument in writing signed by both Placement Agents and the Company. The representations, warranties, agreements and covenants contained herein shall survive the closing of the Placement and delivery of the Securities. This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party, it being understood that both parties need not sign the same counterpart. In the event that any signature is delivered by facsimile transmission or a .pdf format file, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile or .pdf signature page were an original thereof. 

 

SECTION 12.CONFIDENTIALITY.  Each of the Placement Agents, severally and not jointly, (i) will keep the Confidential Information (as such term is defined below) confidential and will not (except as required by applicable law or stock exchange requirement, regulation or legal process (“Legal Requirement”)), without the Company’s prior written consent, disclose to any person any Confidential Information, and (ii) will not use any Confidential Information other than in connection with the Placement.  The Placement Agents further agree, severally and not jointly, to disclose the Confidential Information only to its Representatives (as such term is defined below) who need to know the Confidential Information for the purpose of the Placement, and who are informed by the Placement Agents of the confidential nature of the Confidential Information. The term “Confidential Information” shall mean, all confidential, proprietary and non-public information (whether written, oral or electronic communications) furnished by the Company to a Placement Agent or its Representatives in connection with such Placement Agent’s evaluation of the Placement. The term “Confidential Information” will not, however, include information which (i) is or becomes publicly available other than as a result of a disclosure by a Placement Agent or its Representatives in violation of this Agreement, (ii) is or becomes available to a Placement Agent or any of its Representatives on a non-confidential basis from a third-party, (iii) is known to a Placement Agent or any of its Representatives prior to disclosure by the Company or any of its Representatives, or (iv) is or has been independently developed by a Placement Agent and/or the Representatives without use of any Confidential Information furnished to it by the Company. The term “Representatives” shall mean each Placement Agent’s directors, board committees, officers, employees, financial advisors, attorneys and accountants. This provision shall be in full force until the earlier of (a) the date that the Confidential Information ceases to be confidential and (b) two years from the date hereof.  Notwithstanding any of the foregoing, in the event that the Placement Agents or any of their respective Representatives are required by Legal Requirement to disclose any of the Confidential Information, such Placement Agent and their respective Representatives will furnish only that portion of the Confidential Information which such Placement Agent or their respective Representative, as applicable, is required to disclose by Legal 

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Requirement as advised by counsel, and will use reasonable efforts to obtain reliable assurance that confidential treatment will be accorded the Confidential Information so disclosed.

SECTION 13.     NOTICES. Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and shall be deemed given and effective on the earliest of (a) the date of transmission, if such notice or communication is sent to the email address specified on the signature pages attached hereto prior to 6:30 p.m. (New York City time) on a business day, (b) the next business day after the date of transmission, if such notice or communication is sent to the email address on the signature pages attached hereto on a day that is not a business day or later than 6:30 p.m. (New York City time) on any business day, (c) the third business day following the date of mailing, if sent by U.S. internationally recognized air courier service, or (d) upon actual receipt by the party to whom such notice is required to be given. The address for such notices and communications shall be as set forth on the signature pages hereto.

 

SECTION 14.Press Announcements. The Company agrees that the Placement Agents shall, from and after any Closing, have the right to reference the Placement and the Placement Agents’ role in connection therewith in the Placement Agents’ marketing materials and on its website and to place advertisements in financial and other newspapers and journals, in each case at its own expense.

 

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Please confirm that the foregoing correctly sets forth our agreement by signing and returning to Maxim and DJ the enclosed copy of this Agreement.

 

	
 
	
Very truly yours,

	
 
	
 

	
 
	
Maxim GROUP LLC

	
 
	
 

	
 
	
By: 
	
/s/ Clifford A. Teller

	
 
	
 
	
Name: Clifford A. Teller

	
 
	
 
	
Title:    Executive Managing Director, 

Investment Banking

	
 
	
 

	
 
	
Address for notice:

	
 
	
405 Lexington Avenue

	
 
	
New York, NY 10174

	
 
	
Attention: James Siegel, General Counsel

Email: jsiegel@maximgrp.com

 

	
 
	
Dawson james securities, inc.

	
 
	
 

	
 
	
By: 
	
/s/ Robert D. Keyser, Jr.

	
 
	
 
	
Name: Robert D. Keyser, Jr., CEO

	
 
	
 
	
 

	
 
	
 

	
 
	
Address for notice:

	
 
	
1 North Federal Highway, Suite 500

	
 
	
Boca Raton, FL 33432

	
 
	
Attention: Robert D. Keyser, Jr., CEO

Email: bob@dawsonjames.com

 

Accepted and Agreed to as of

the date first written above:

 

	
BIOCEPT, INC.

	
 
	
	
By: 
	
/s/ Michael W. Nall
	
 

	
 
	
Name: Michael W. Nall
	
 

	
 
	
Title:  Chief Executive Officer and President
	
 

 

Address for notice:

Biocept, Inc.

5810 Nancy Ridge Drive

San Diego, CA 92121
Attn: Chief Executive Officer and President

Email: mnall@biocept.com

 

[Signature Page to Placement Agency Agreement Between 

Biocept, Inc., Maxim Group LLC and Dawson James Securities, Inc.]

 

 

 

 

ADDENDUM A

INDEMNIFICATION PROVISIONS

 

 In connection with the engagement of Maxim Group LLC and Dawson James Securities, Inc. (the “Lead Managers”) by Biocept, Inc. (the “Company”) pursuant to a placement agency agreement dated as of the date hereof, between the Company and the Lead Managers, as it may be amended from time to time in writing (the “Agreement”), the Company hereby agrees as follows: 

 

1.To the extent permitted by law, the Company will indemnify the Lead Managers and each of their affiliates, directors, officers, employees and controlling persons (within the meaning of Section 15 of the Securities Act of 1933, as amended, or Section 20 of the Securities Exchange Act of 1934) against all losses, claims, damages, expenses and liabilities, as the same are incurred (including the reasonable fees and expenses of counsel), relating to or arising out of its activities hereunder or pursuant to the Agreement, except, with regard to the Lead Managers, to the extent that any losses, claims, damages, expenses or liabilities (or actions in respect thereof) are found in a final judgment (not subject to appeal) by a court of law to have resulted primarily and directly from the Lead Managers’ willful misconduct or gross negligence in performing the services described herein, as the case may be. 

 

2.Promptly after receipt by the Lead Managers of notice of any claim or the commencement of any action or proceeding with respect to which the Lead Managers are entitled to indemnity hereunder, the Lead Managers will notify the Company in writing of such claim or of the commencement of such action or proceeding, and the Company will assume the defense of such action or proceeding and will employ counsel reasonably satisfactory to the Lead Managers and will pay the fees and expenses of such counsel. Notwithstanding the preceding sentence, the Lead Managers will be entitled to employ counsel separate from counsel for the Company and from any other party in such action if counsel for the Lead Managers reasonably determines that it would be inappropriate under the applicable rules of professional responsibility for the same counsel to represent both the Company and the Lead Managers. In such event, the reasonable fees and disbursements of no more than one such separate counsel will be paid by the Company. The Company will have the exclusive right to settle the claim or proceeding provided that the Company will not settle any such claim, action or proceeding without the prior written consent of the Lead Managers, which will not be unreasonably withheld. 

 

3.The Company agrees to notify the Lead Managers promptly of the assertion against it or any other person of any claim or the commencement of any action or proceeding relating to a transaction contemplated by the Agreement. 

 

4.If for any reason the foregoing indemnity is unavailable to the Lead Managers or insufficient to hold the Lead Managers harmless, then the Company shall contribute to the amount paid or payable by the Lead Managers, as the case may be, as a result of such losses, claims, damages or liabilities in such proportion as is appropriate to reflect not only the relative benefits received by the Company on the one hand, and the Lead Managers on the other, but also the relative fault of the Company on the one hand and the Lead Managers on the other that resulted in such losses, claims, damages or liabilities, as well as any relevant equitable considerations. The amounts paid or payable by a party in respect of losses, claims, damages and liabilities referred to above shall be deemed to include any legal or other fees and expenses incurred in defending any litigation, proceeding or other action or claim. Notwithstanding the provisions hereof, the Lead Managers’ share of the liability hereunder shall not be in excess of the amount of fees actually received, or to be received, by the Lead Managers under the Agreement (excluding any amounts received as reimbursement of expenses incurred by the Lead Managers). 

 

5.These Indemnification Provisions shall remain in full force and effect whether or not the transaction contemplated by the Agreement is completed and shall survive the termination of the 

 

 

 

Agreement, and shall be in addition to any liability that the Company might otherwise have to any indemnified party under the Agreement or otherwise.

 

 

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

 

 

 

 

 

	
 
	
Very truly yours,

	
 
	
 

	
 
	
Maxim GROUP LLC

	
 
	
 

	
 
	
By: 
	
/s/ Clifford A. Teller

	
 
	
 
	
Name: Clifford A. Teller

	
 
	
 
	
Title:    Executive Managing Director, 

Investment Banking

	
 
	
 

	
 
	
Address for notice:

	
 
	
405 Lexington Avenue

	
 
	
New York, NY 10174

	
 
	
Attention: James Siegel, General Counsel

Email: jsiegel@maximgrp.com

 

	
 
	
Dawson james securities, inc.

	
 
	
 

	
 
	
By: 
	
/s/ Robert D. Keyser, Jr.

	
 
	
 
	
Name: Robert D. Keyser, Jr., CEO

	
 
	
 
	
 

	
 
	
 

	
 
	
Address for notice:

	
 
	
1 North Federal Highway, Suite 500

	
 
	
 Boca Raton, FL 33432

	
 
	
Attention: Robert D. Keyser, Jr., CEO

Email: bob@dawsonjames.com

 

Accepted and Agreed to as of

the date first written above:

 

	
BIOCEPT, INC.

	
 
	
	
By: 
	
/s/ Michael W. Nall
	
 

	
 
	
Name: Michael W. Nall
	
 

	
 
	
Title:  Chief Executive Officer and President
	
 

 

Address for notice:

Biocept, Inc.

5810 Nancy Ridge Drive

San Diego, CA 92121
Attn: Chief Executive Officer and President

Email: mnall@biocept.com

 

 

[Signature Page to Indemnification Provisions

Pursuant to Placement Agency Agreement

between Biocept, Inc., Maxim Group LLC and Dawson James Securities, Inc.]POST-RETIREMENT AGREEMENT

 

 

Mr. Richard A. Meeusen

Chairman, President and Chief Executive Officer

 Badger Meter, Inc.

Re: Retirement Agreement

 

Dear Rich:

 

I am pleased to confirm in this letter (the “Agreement”) additional terms and conditions related to the valuable services that you provide to Badger Meter, Inc. (“Badger Meter” or the “Company”) and its shareholders.  This Agreement shall become effective upon being signed by you and the Company.  The benefits and support described herein are being provided in consideration for your agreement to (1) remain as the Chairman of the Board of Directors of the Company (the “Board”) for the period specified herein, (2) provide the consulting services described in Section 3, and (3) refrain from taking certain actions as described in Section 4.

 

1.            Retirement Date

 

You agree to continue to serve as Chief Executive Officer (“CEO”) of the Company until your retirement on December 31, 2018.  Beginning January 1, 2019, you agree to serve as Chairman of the Board of Directors of the Company until such time as the Board determines that your services in that role are no longer required.  In your role as a director of the Company, you will receive director compensation commensurate with the compensation paid to all other directors.

 

2.            Benefit Plans

 

Your existing unvested stock options and restricted stock shall vest as of September 30, 2018, with no further restrictions.  The original exercise period will remain in place for all outstanding stock options.  In addition, the Company shall pay out any accrued value for your outstanding but unvested long-term incentive plans as of December 31, 2018.

 

3.            Post-Retirement Consulting Services

 

For the period from December 31, 2018 until March 2, 2023 (the “Consulting Period”), you agree to make yourself reasonably available during normal working hours to consult with the CEO or the Board, or their respective delegates, at their discretion and at no additional cost, for up to 40 hours (the “Consulting Services”).  You will be reimbursed for expenses incurred in connection with providing the Consulting Services in accordance with Company policy.

 

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4.            Conditions Applicable to Benefits and Support Granted Under This Agreement

 

The rights and benefits described in this Agreement are subject to the following terms and conditions (collectively, the “Conditions Precedent”):

 

		·	
Prior to the end of the Consulting Period, and other than positions you currently hold, you may not accept a position as an employee, consultant or director with another company, organization or entity that engages in substantial competition with the Company or its subsidiaries unless the Compensation Committee has otherwise consented to your service in such position; and

 

		·	
You must provide the Consulting Services if requested.

 

If the Company determines, in its good faith judgment, that you have not satisfied one or more of the Conditions Precedent, Badger Meter shall have the right to cease providing the value of any consideration you realize pursuant to this Agreement; provided, however, that the Company shall not have any of the rights or remedies described in this sentence unless (A) the Company gives you written notice of its intention to terminate your benefits and support under this Agreement, setting forth in reasonable detail your specific conduct that the Company considers to constitute a violation of the Conditions Precedent and the specific provision of this Section 4 on which it relies, and stating the date, time and place of a Compensation Committee meeting relating thereto (which shall be no less than thirty (30) days following the date you receive such written notice), (B) you are given an opportunity to cure such conduct within thirty (30) days following receipt of such notice, if cure is possible, and an opportunity to be heard at the Compensation Committee meeting, and (C) a resolution is duly adopted at the Compensation Committee meeting stating that, in the good faith determination of the Compensation Committee, you are guilty of the conduct described in the written notice, such conduct has not been cured and such conduct constitutes a violation of the Conditions Precedent.  It is further understood and agreed that money damages may not be a sufficient remedy for any breach of this Agreement by you and that the Company shall be entitled to seek equitable relief, including injunction and specific performance, as a remedy for any such breach.  Such remedy shall not be deemed to be the exclusive remedy for the breach of this Agreement by you, but shall be in addition to all other remedies at law or equity to the Company.

 

5.            Company Car

 

You will continue to have use of the Company car until the expiration of the lease in November 2019, including reimbursement for cost of operation, maintenance and insurance.

 

6.            Death

 

For the avoidance of doubt (without limitation to any rights you have under any other plan, agreement or arrangement with Badger Meter), upon your death, your surviving spouse shall be entitled to the benefits described in this Agreement, if any (you will be deemed to have complied with and satisfied all of the Conditions Precedent with respect to such benefits).

 

7.            Modification and Waiver

 

This Agreement may be amended or modified only by an agreement in writing.  The failure by you or the Company to declare a breach or otherwise to assert its rights under this Agreement shall not be construed as a waiver of any right that you or the Company has under this Agreement.

 

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8.            Dispute Resolution and Governing Law

 

This Agreement and the rights and obligations hereunder shall be governed by and construed in accordance with the laws of the State of Wisconsin, without reference to the conflict of law principles thereof.  Any dispute arising out of this Agreement shall, at your election, be determined by arbitration under the rules of the American Arbitration Association then in effect (in which case both parties shall be bound by the arbitration award) or by litigation.  Whether the dispute is to be settled by arbitration or litigation, the venue for the arbitration or litigation shall be Milwaukee, Wisconsin or, at your election, if you are not then residing or working in the Milwaukee, Wisconsin metropolitan area, in the judicial district encompassing the city in which you reside; provided, that, if you are not then residing in the United States, your election with respect to such venue shall be either Milwaukee, Wisconsin or in the judicial district encompassing that city in the United States among the thirty cities having the largest population (as determined by the most recent United States Census data available at December 31, 2018) which is closest to your residence.  The parties consent to personal jurisdiction in each trial court in the selected venue having subject matter jurisdiction notwithstanding their residence or situs, and each party irrevocably consents to service of process in the manner provided hereunder for the giving of notices.

 

9.            Section 409A

 

You and the Company intend that any amounts payable hereunder that could constitute “deferred compensation” within the meaning of Section 409A of the Internal Revenue Code of 1986, as amended (“Section 409A”) shall comply with Section 409A, and this Agreement shall be administered, interpreted and construed in a manner that does not result in the imposition of additional taxes, penalties or interest under Section 409A.  If any in-kind benefit or expense reimbursement made hereunder shall be determined to be “deferred compensation” within the meaning of Section 409A, then (a) the amount of the in-kind benefit or expense reimbursement during one taxable year shall not affect the amount of the in-kind benefits or expense reimbursement during any other taxable year, (b) the expense reimbursement shall be made on or before the last day of your taxable year following the year in which the expense was incurred and (c) the right to in-kind benefits or expense reimbursement hereunder shall not be subject to liquidation or exchange for another benefit.

 

*******

 

[Signatures follow on the next page.]

 

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Please indicate your acceptance of the terms and conditions of this letter by returning a signed copy of this letter to my attention. Thank you. We look forward to your continued leadership.

 

 

/s/ Todd Teske                                                                                                                                                        /s/ Gale Klappa

Todd Teske, Lead Director                                                                                                                              Gale Klappa, Chair, Compensation Committee

Read and Accepted:

/s/ Richard A. Meeusen                                                                                                                                Date:  September 24, 2018

 Richard A. Meeusen

 

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