Underwriting Agreement
Exhibit 1.1
PHOTOMEDEX, INC.
2,082,522 Shares
Common Stock
($0.01 par value)
Underwriting Agreement
UNDERWRITING AGREEMENT
April 23, 2012
Canaccord Genuity Inc.
Maxim Group LLC
c/o Canaccord Genuity Inc.
99 High Street, 12th Floor
Boston, MA 02110
Ladies and Gentlemen:
PhotoMedex, Inc., a Nevada corporation (the “Company”), proposes to issue and sell to Canaccord Genuity Inc. and Maxim Group LLC (collectively, the “Underwriters”)
pursuant to this Underwriting Agreement (this “Agreement”) an aggregate of 2,082,522 shares (the “Shares”) of common stock, $0.01 par value (the “Common Stock”), of the Company. Canaccord Genuity
Inc. is the representative for the Underwriters (the “Representative”). The Shares are described in the Prospectus which is referred to below.
Reference is made to the merger of Radiancy, Inc., a Delaware corporation (“Radiancy”), with and into PHMD Merger Sub, Inc., a Delaware corporation and a wholly-owned subsidiary of the
Company (“Merger Sub”), pursuant to the terms and conditions of that certain Amended and Restated Agreement and Plan of Merger, dated as of October 31, 2011 (the “Merger Agreement”), by and among the Company,
Radiancy and Merger Sub (the “Merger”). It is understood that the Underwriters are entering into this Agreement on the basis of the representations and warranties of the Company and its Subsidiaries (as defined herein) in
Section 3 hereof. “Subsidiary,” as used herein, means each direct and indirect subsidiary of the Company, including but not limited to Radiancy and each direct and indirect subsidiary of Radiancy. A true and correct list of the
Subsidiaries is set forth on Exhibit A. “To the knowledge of the Company and its Subsidiaries,” and language of similar import, as used herein, shall include any fact or circumstance known to the Company, Radiancy or any of the
other Subsidiaries. “Material Adverse Change,” as used herein, shall mean a material adverse change in the general affairs, condition (financial or otherwise), business, prospects, property, operations or results of operations of
the Company and its Subsidiaries, taken as a whole.
The Company has prepared and filed, in accordance with the provisions of
the Securities Act of 1933, as amended, and the rules and regulations thereunder (collectively, the “Act”), with the Securities and Exchange Commission (the “Commission”) a registration statement on Form S-3
(File No. 333-178751) under the Act (the “registration statement”), including a prospectus, which registration statement incorporates by reference documents which the Company has filed, or will file, in accordance with the
provisions of the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder (collectively, the “Exchange Act”). Such registration statement has become effective under the Act.
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Except where the context otherwise requires, “Registration Statement,” as
used herein, means the registration statement, as amended at the time of such registration statement’s effectiveness for purposes of Section 11 of the Act, as such section applies to the Underwriters (the “Effective
Time”), including (i) all documents filed as a part thereof or incorporated or deemed to be incorporated by reference therein and (ii) any information contained or incorporated by reference in a prospectus filed with the
Commission pursuant to Rule 424(b) under the Act, to the extent such information is deemed, pursuant to Rule 430B or Rule 430C under the Act, to be part of the registration statement at the Effective Time.
Except where the context otherwise requires, “Basic Prospectus,” as used herein, means the base prospectus included as
part of the Registration Statement, in the form in which it has most recently been filed with the Commission prior to the date of this Agreement. Except where the context otherwise requires, “Prospectus Supplement,” as used herein,
means the final prospectus supplement, relating to the Shares, filed by the Company with the Commission pursuant to Rule 424(b) under the Act on or before the second business day after the date hereof (or such earlier time as may be required
under the Act), in the form furnished by the Company to the Underwriters for use by the Underwriters and by dealers in connection with the offering of the Shares. Except where the context otherwise requires, “Prospectus,” as used
herein, means the Basic Prospectus as supplemented by the Prospectus Supplement.
“Permitted Free Writing
Prospectuses,” as used herein, means the documents listed on Schedule B attached hereto. The Underwriters have not offered or sold and will not offer or sell, without the Company’s consent, any Shares by means of any “free
writing prospectus” (as defined in Rule 405 under the Act) that is required to be filed with the Commission pursuant to Rule 433 under the Act, other than a Permitted Free Writing Prospectus.
“Disclosure Package,” as used herein, means the Basic Prospectus, together with the Permitted Free Writing Prospectuses,
if any.
Any reference herein to the Registration Statement, the Basic Prospectus, the Prospectus Supplement, the Prospectus
or any Permitted Free Writing Prospectus shall be deemed to refer to and include the documents, if any, incorporated by reference, or deemed to be incorporated by reference, therein pursuant to Item 12 of Form S-3 and filed under the
Securities Exchange Act of 1934, as amended (each an “Incorporated Document” and collectively, the “Incorporated Documents”), including, unless the context otherwise requires, the documents, if any, filed as
exhibits to such Incorporated Documents. Any reference herein to the terms “amend,” “amendment” or “supplement” with respect to the Registration Statement, the Basic Prospectus, the Prospectus Supplement, the Prospectus
or any Permitted Free Writing Prospectus shall unless otherwise specifically provided herein be deemed to refer to and include the filing of any document under the Exchange Act on or after the initial effective date of the Registration Statement, or
the date of the Basic Prospectus, the Prospectus Supplement, the Prospectus or such Permitted Free Writing Prospectus, as the case may be, and deemed to be incorporated therein by reference.
As used in this Agreement, “business day” shall mean a day on which the NASDAQ Stock Market (“NASDAQ”) is open
for trading. The terms “herein,” “hereof,” “hereto,” “hereinafter” and similar terms, as used in this Agreement, shall in each case refer to this Agreement as a whole and not to any particular section,
paragraph, sentence or other subdivision of this Agreement. The term “or,” as used herein, is not exclusive.
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The Company and the Underwriters agree as follows:
1. Sale and Purchase. Upon the basis of the representations and warranties and subject to the terms and conditions herein set
forth, the Company agrees to issue and sell to the respective Underwriters and each of the Underwriters, severally and not jointly, agrees to purchase from the Company the number of Shares set forth opposite the name of such Underwriter in Schedule
A hereto, subject to adjustment in accordance herewith, in each case at a purchase price set forth on Schedule A hereto. The Company is advised by the Underwriters that the Underwriters intend (i) to make a public offering of their respective
portions of the Shares as soon after the effectiveness of this Agreement as in the Underwriters’ judgment is advisable and (ii) initially to offer the Shares upon the terms set forth in the Prospectus. The Underwriters may from time to
time increase or decrease the public offering price after the initial public offering to such extent as the Underwriters may determine.
2. Payment and Delivery. Payment of the purchase price for the Shares shall be made to the Company by Federal Funds wire transfer against delivery of the Shares to the Underwriters through the
facilities of The Depository Trust Company (“DTC”) for the respective accounts of the Underwriters. Such payment and delivery shall be made at 10:00 AM, Boston time, on April 27, 2012 (the “Time of Purchase”)
(unless another time shall be agreed to in writing by the Representative and the Company). Electronic transfer of the Shares shall be made to the Underwriters at the Time of Purchase in such names and in such denominations as the Representative
shall specify.
Deliveries of the documents described in Section 6 hereof with respect to the purchase of the Shares
shall be made at the offices of Choate, Hall & Stewart LLP, Two International Place, Boston, Massachusetts 02110, at 9:00 A.M., Boston time, on the date of the closing of the purchase of the Shares.
3. Representations and Warranties of the Company. The Company represents and warrants to and agrees with each of the Underwriters
that:
(a) the Registration Statement has heretofore become effective under the Act; no stop order of the Commission
preventing or suspending the use of the Basic Prospectus, the Prospectus Supplement, the Prospectus or any Permitted Free Writing Prospectus, or the effectiveness of the Registration Statement, has been issued, and no proceedings for such purpose
have been instituted or, to the knowledge of the Company, are contemplated by the Commission;
(b) the Registration Statement
complied when it became effective, complies as of the date hereof and, as amended or supplemented, at the Time of Purchase and at all times during which a prospectus is required by the Act to be delivered (whether physically or through compliance
with Rule 172 under the Act or any similar rule) in connection with any sale of Shares by the Company or the Underwriters, will comply, in all material respects, with the requirements of the Act; the Company meets the requirements for use of
Form S-3, set forth in
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the General Instructions thereto; the offering and sale of the Shares as contemplated hereby meets the requirements for use of Form S-3, set forth in the General Instructions thereto; the
Registration Statement meets, and the offering and sale of the Shares as contemplated hereby complies with, the requirements of Rule 415 under the Act; the Registration Statement did not, as of the Effective Time, 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; the Basic Prospectus complied as of its date, complies as of the date hereof and, at the Time of Purchase and
at all times during which a prospectus is required by the Act to be delivered (whether physically or through compliance with Rule 172 under the Act or any similar rule) in connection with any sale of Shares by the Company or the Underwriters,
will comply, in all material respects, with the requirements of the Act; the Disclosure Package does not include an 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; each of the Prospectus Supplement and the Prospectus will comply, as of the date that it is filed with the Commission and the date of the Prospectus Supplement, as applicable, the Time
of Purchase and at all times during which a prospectus is required by the Act to be delivered (whether physically or through compliance with Rule 172 under the Act or any similar rule) in connection with any sale of Shares by the Company or the
Underwriters, in all material respects, with the requirements of the Act (in the case of the Prospectus, including, without limitation, Section 10(a) of the Act); at no time during the period that begins the date of the Prospectus Supplement
and ends at the later of the Time of Purchase and the end of the period during which a prospectus is required by the Act to be delivered (whether physically or through compliance with Rule 172 under the Act or any similar rule) in connection
with any sale of Shares by the Company or the Underwriters did or will any of the Prospectus Supplement or the Prospectus, as then amended or supplemented, include an 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; each Permitted Free Writing Prospectus, if any, does not conflict with the information contained in the Registration Statement, the
Disclosure Package or the Prospectus, and at no time during the period that begins on the date of such Permitted Free Writing Prospectus and ends at the Time of Purchase did or will any Permitted Free Writing Prospectus include an 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; provided, however, that the Company makes no representation or
warranty in this Section 3(b) with respect to any statement contained in the Registration Statement, the Prospectus or any Permitted Free Writing Prospectus in reliance upon and in conformity with information concerning any Underwriter and
furnished in writing by or on behalf of such Underwriter to the Company expressly for use in the Registration Statement, the Prospectus or such Permitted Free Writing Prospectus; each Incorporated Document, at the time such document was filed with
the Commission or at the time such document became effective, as applicable, complied, in all material respects, with the requirements of the Exchange Act and did not include an 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;
(c) prior to the execution of this Agreement, the Company has not, directly or indirectly, offered or sold any of the Shares by means of any “prospectus” (within the meaning of the Act) or used
any “prospectus” (within the meaning of the Act) in connection with the offer
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or sale of the Shares, in each case other than the Basic Prospectus and the Permitted Free Writing Prospectuses, if any; the Company has not, directly or indirectly, prepared, used or referred to
any Permitted Free Writing Prospectus except in compliance with Rule 164 and Rule 433 under the Act; assuming that such Permitted Free Writing Prospectus is so sent or given after the Registration Statement was filed with the Commission (and after
such Permitted Free Writing Prospectus was, if required pursuant to Rule 433(d) under the Act, filed with the Commission), the sending or giving, by any Underwriter, of any Permitted Free Writing Prospectus will satisfy the provisions of Rule 164
and Rule 433 under the Act (without reliance on subsections (b), (c) and (d) of Rule 164 under the Act); the conditions set forth in one or more of subclauses (i) through (iv), inclusive, of Rule 433(b)(1) under the Act are satisfied;
and the registration statement relating to the offering of the Shares contemplated hereby, as initially filed with the Commission, includes a prospectus that, other than by reason of Rule 433 or Rule 431 under the Act, satisfies the requirements of
Section 10 of the Act; neither the Company nor the Underwriters are disqualified, by reason of subsection (f) or (g) of Rule 164 under the Act, from using, in connection with the offer and sale of the Shares, “free writing
prospectuses” (as defined in Rule 405 under the Act) pursuant to Rules 164 and 433 under the Act; the Company is not an “ineligible issuer” (as defined in Rule 405 under the Act) as of the eligibility determination date for purposes
of Rule 164 and Rule 433 under the Act and as of the date hereof with respect to the offering of the Shares contemplated by the Registration Statement;
(d) the financial statements of the Company, together with the related notes, set forth or incorporated by reference, in the Registration Statement, the Disclosure Package and the Prospectus comply in all
material respects with the requirements of the Act and fairly present in all material respects the financial condition of the Company and its Subsidiaries as of the dates indicated and the results of operations and changes in cash flows for the
periods therein specified in conformity with generally accepted accounting principles in the United States consistently applied throughout the periods involved, except as may be set forth in the related notes included or incorporated by reference in
the Disclosure Package; the financial statements of Radiancy, together with the related notes, set forth or incorporated by reference, in the Registration Statement, the Disclosure Package and the Prospectus comply in all material respects with the
requirements of the Act and fairly present in all material respects the financial condition of Radiancy and its subsidiaries as of the dates indicated and the results of operations and changes in cash flows for the periods therein specified in
conformity with generally accepted accounting principles in the United States consistently applied throughout the periods involved; the unaudited pro forma financial information, together with the related notes, set forth or incorporated by
reference, in the Registration Statement, the Disclosure Package and the Prospectus comply in all material respects with the requirements of the Act and fairly present in all material respects the information required to be stated therein in
conformity with generally accepted accounting principles in the United States consistently applied throughout the periods involved; and the supporting schedules included in the Registration Statement, the Disclosure Package and the Prospectus have
been derived from the accounting records of the Company and its Subsidiaries and present fairly in all material respects the information required to be stated therein, except as may be set forth in the related notes included or incorporated by
reference in the General Disclosure Package. Except as included therein, no supporting schedules or other financial statements are required to be included in the Registration Statement, the Disclosure Package or the Prospectus under the Act or the
rules and regulations thereunder. To the Company’s knowledge, Fahn Kanne & Co., which has expressed its opinion with respect to
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certain financial statements filed as a part of the Registration Statement and included in the Registration Statement, the Disclosure Package and the Prospectus, is (x) an independent public
accounting firm within the meaning of the Act, (y) a registered public accounting firm (as defined in Section 2(a)(12) of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”)) and (z) in the performance of their
work for the Company and Radiancy, not in violation of the auditor independence requirements of the Sarbanes-Oxley Act. EisnerAmper LLP, which has expressed its opinion with respect to certain financial statements filed as a part of the Registration
Statement and included in the Registration Statement, the Disclosure Package and the Prospectus, (x) was at the time it provided such opinion an independent public accounting firm within the meaning of the Act, (y) was at the time it
provided such opinion a registered public accounting firm (as defined in Section 2(a)(12) of Sarbanes-Oxley Act)) and (z) in the performance of their work for the Company, not in violation of the auditor independence requirements of the
Sarbanes-Oxley Act. Except as described in the Registration Statement, the Disclosure Package and the Prospectus, there are no material off-balance sheet transactions, arrangements, obligations (including contingent obligations), or any other
relationships with unconsolidated entities or other persons, that may have a current or, to the knowledge of the Company and its Subsidiaries, future material adverse effect on the Company’s or its Subsidiaries’ financial condition,
changes in financial condition, results of operations, liquidity, capital expenditures, capital resources or significant components of revenue or expenses;
(e) the Company has been duly organized and is validly existing as a corporation in good standing under the laws of the State of Nevada. The Company has full corporate power and authority to own its
properties and conduct its business as currently being conducted and as described in the Registration Statement, the Disclosure Package and the Prospectus, and is duly qualified to do business as a foreign corporation in good standing in each
jurisdiction in which it owns or leases real property or in which the conduct of its business makes such qualification necessary and in which the failure to so qualify might result in a Material Adverse Change. The Company has no significant
subsidiaries (as defined in Rule 1-02(w) of Regulation S-X of the Commission) other than the Subsidiaries; except as disclosed in the Registration Statement, the Prospectus and the Permitted Free Writing Prospectuses, if any, the Company owns,
directly or indirectly, all of the issued and outstanding capital stock or limited liability company interests of each of the Subsidiaries; except with respect to the Subsidiaries, the Company does not own, directly or indirectly, any shares of
stock or any other equity interests or long-term debt securities of any corporation, firm, partnership, joint venture, association or other entity; complete and correct copies of the limited liability company agreements, certificates of formation,
articles of incorporation and the by-laws of the Company, Radiancy and each of the other Subsidiaries and all amendments thereto have been delivered to the Underwriters, and no changes therein will be made on or after the date hereof through and
including the Time of Purchase; each Subsidiary (i) has been duly organized or incorporated and is validly existing as a limited liability company or corporation in good standing under the laws of the jurisdiction of its formation or
incorporation, with full limited liability company, corporate or equivalent power and authority to own, lease and operate its properties and to conduct its business as described in the Registration Statement, the Prospectus and the Permitted Free
Writing Prospectuses, if any and (ii) is qualified to do business as a foreign limited liability company or corporation and is in good standing in each jurisdiction where the ownership or leasing of its properties or the conduct of its business
requires such qualification, except in the case of each of clause (i) and (ii) as would not, individually or in the aggregate, result in a
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Material Adverse Change; all of the outstanding shares of capital stock or limited liability company interests of each of the Subsidiaries have been duly authorized and validly issued, are fully
paid and non-assessable, have been issued in compliance with all applicable securities laws, were not issued in violation of any preemptive right, resale right, right of first refusal or similar right and are owned by the Company subject to no
security interest, other encumbrance or adverse claims; no options, warrants or other rights to purchase, agreements or other obligations to issue or other rights to convert any obligation into shares of capital stock or ownership interests in the
Subsidiaries are outstanding;
(f) except as contemplated in the Registration Statement, the Disclosure Package and the
Prospectus, subsequent to the respective dates as of which information is given in the Registration Statement, the Disclosure Package and the Prospectus, (A) neither the Company nor any of its Subsidiaries has incurred any material liabilities
or obligations, direct or contingent, or entered into any material transactions, or declared or paid any dividends or made any distribution of any kind with respect to its capital stock or limited liability company interests; and (B) there has
not been any change in the capital stock or limited liability company interests (other than a change in the number of outstanding shares of Common Stock due to the issuance of shares upon the exercise of options, or due to the tendering to the
Company of shares to pay for taxes in connection therewith), or any material change in the short term or long term debt, or any issuance of options, warrants, convertible securities or other rights to purchase the capital stock, of the Company or
any of its Subsidiaries (other than issuances of options under the Company’s 2005 Equity Incentive Plan), or any Material Adverse Change or any development that could reasonably be expected to result in a Material Adverse Change;
(g) except as set forth in the Registration Statement, the Disclosure Package and the Prospectus, there is not pending or, to the
knowledge of the Company and its Subsidiaries, threatened or contemplated, any action, suit or proceeding to which the Company or any of its Subsidiaries is a party or of which any property or assets of the Company or any of its Subsidiaries is the
subject before or by any court or governmental agency, authority or body, or any arbitrator, which, individually or in the aggregate, could reasonably be expected to result in any Material Adverse Change. There are no current or pending legal,
governmental or regulatory actions, suits or proceedings that are required to be described in the Registration Statement, the Disclosure Package and the Prospectus that have not been so described;
(h) there are no statutes, regulations, contracts or documents that are required to be described in the Registration Statement, the
Disclosure Package and the Prospectus or to be filed as exhibits to the Registration Statement by the Act that have not been so described or filed;
(i) this Agreement has been duly authorized, executed and delivered by the Company, and constitutes a valid, legal and binding obligation of the Company, enforceable in accordance with its terms, except
as rights to indemnity hereunder may be limited by federal or state securities laws and except as such enforceability may be limited by bankruptcy, insolvency, reorganization or similar laws affecting the rights of creditors generally and subject to
general principles of equity. The execution, delivery and performance of this Agreement and the consummation of the transactions herein contemplated will not (A) conflict with or result in a breach or violation of any of the terms or provisions
of, or constitute a default under, or result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of the
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Company or any of the Subsidiaries pursuant to, any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which the Company or any of the Subsidiaries is a party
or by which the Company or any of the Subsidiaries is bound or to which any of the property or assets of the Company or any of the Subsidiaries is subject, (B) result in any violation of the provisions of the limited liability company
agreement, certificate of formation certificate of incorporation, articles of incorporation, by-laws or similar organizational documents of the Company or any of the Subsidiaries or (C) result in the violation of any law or statute or any
judgment, order, rule or regulation of any court or arbitrator or governmental or regulatory authority applicable to the Company or any Subsidiary. No consent, approval, authorization or order of, or filing with, any court or governmental agency or
body is required for the execution, delivery and performance of this Agreement or for the consummation of the transactions contemplated hereby, including the issuance or sale of the Shares by the Company, except such as has been obtained or made or
as may be required under the Act or state securities or blue sky laws, or by the Financial Institution Regulatory Authority (“FINRA”) or NASDAQ; and the Company has full power and authority to enter into this Agreement and to
consummate the transactions contemplated hereby including the authorization, issuance and sale of the Shares as contemplated by this Agreement;
(j) all of the issued and outstanding shares of capital stock of the Company, including the outstanding shares of Common Stock, are duly authorized and validly issued, fully paid and nonassessable, have
been issued in compliance with all federal and state securities laws, were not issued in violation of or subject to any preemptive rights or other rights to subscribe for or purchase securities that have not been waived in writing (a copy of which
has been delivered to counsel to the Underwriters); the Shares which may be sold hereunder by the Company have been duly authorized and, when issued, delivered and paid for in accordance with the terms of this Agreement, will have been validly
issued and will be fully paid and nonassessable; and the capital stock of the Company, including the Common Stock, conforms in all material respects to the description thereof in the Registration Statement, the Disclosure Package and the Prospectus.
Except as otherwise described in the Registration Statement, the Disclosure Package and the Prospectus, there are no preemptive rights or other rights to subscribe for or to purchase, or any restriction upon the voting or transfer of, any shares of
Common Stock pursuant to the Company’s articles of incorporation, by-laws or any agreement or other instrument to which the Company is a party or by which the Company is bound. Neither the filing of the Registration Statement nor the offering
or sale of the Shares as contemplated by this Agreement gives rise to any rights for or relating to the registration of any shares of Common Stock or other Shares of the Company that have not been fully complied with or previously waived. Except as
described or contemplated in the Registration Statement, the Disclosure Package and the Prospectus, there are no options, warrants, agreements, contracts or other rights in existence to purchase or acquire from the Company any shares of the capital
stock of the Company. The Company has an authorized and outstanding capitalization as set forth in the Registration Statement, the Disclosure Package and the Prospectus. The description of the Company’s stock option, stock bonus and other stock
plans or arrangements, and the options or other rights granted thereunder, set forth in the Registration Statement, the Disclosure Package and the Prospectus accurately and fairly presents in all material respects the information required to be
shown therein with respect to such plans, arrangements, options and rights;
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(k) except as described in the Registration Statement, the Disclosure Package and the
Prospectus, the Company and each Subsidiary possesses all licenses, certificates, permits and other authorizations issued by, and has made all declarations and filings with, the appropriate federal, state, local or foreign governmental or regulatory
authorities that are necessary for the ownership or lease of its properties or the conduct of its business, except where the failure to possess or obtain such licenses, certificates, permits or authorizations or make such declarations and filings
could not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Change; except as described in the Registration Statement, the Disclosure Package and the Prospectus, neither the Company nor any Subsidiary has
received notice of any revocation or modification of any such license, certificate, permit or authorization or has any reason to believe that any such license, certificate, permit or authorization will not be renewed in the ordinary course; and the
Company and each Subsidiary is in compliance in all material respects with all applicable federal, state, local and foreign laws, regulations, orders and decrees;
(l) the Company and each Subsidiary has good and marketable title to all property (whether real or personal) described in the Registration Statement, the Disclosure Package and the Prospectus as being
owned by it, in each case free and clear of all liens, claims, security interests, other encumbrances or defects except as described in the Registration Statement, the Disclosure Package and the Prospectus, and except those that could not,
individually or in the aggregate, reasonably be expected to result in a Material Adverse Change. The property held under lease by the Company or any Subsidiary is held by it under valid, subsisting and enforceable leases with only such exceptions
with respect to any particular lease as do not interfere in any material respect with the conduct of the business of the Company or such Subsidiary;
(m) the Company and the Subsidiaries own, possess, or license, or can acquire or license on commercially reasonable terms, all Intellectual Property necessary for the conduct of the Company’s and the
Subsidiaries’ business as now conducted or as described in the Registration Statement, the Disclosure Package and the Prospectus to be conducted, except as and to the extent that any failure to own, possess, license, or acquire such rights
could not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Change. Except as set forth in the Registration Statement, the Disclosure Package and the Prospectus, (A) to the knowledge of the Company and
its Subsidiaries, there is no infringement, misappropriation or violation by third parties of any such Intellectual Property, except as and to the extent that any infringement, misappropriation or violation could not, individually or in the
aggregate, reasonably be expected to result in a Material Adverse Change; (B) there is no pending or, to the knowledge of the Company and its Subsidiaries, threatened action, suit, proceeding or claim by others challenging the Company’s or
any of its Subsidiaries’ rights in or to any such Intellectual Property, and, to the knowledge of the Company and its Subsidiaries, there are no facts which would form a reasonable basis for any such claim, except as and to the extent that any
threatened suit, proceeding or claim could not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Change; (C) the Intellectual Property owned by the Company and its Subsidiaries and to the knowledge of the
Company and its Subsidiaries, the Intellectual Property licensed to the Company and its Subsidiaries has not been adjudged invalid or unenforceable, in whole or in part, and there is no pending or threatened action, suit, proceeding or claim by
others challenging the validity or scope of any such Intellectual Property, and to the knowledge of the Company and its Subsidiaries, there are no
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facts which would form a reasonable basis for any such claim, except as and to the extent that any threatened action, suit, proceeding or claim could not, individually or in the aggregate,
reasonably be expected to result in a Material Adverse Change; (D) there is no pending or, to the knowledge of the Company and its Subsidiaries, threatened action, suit, proceeding or claim by others that the Company or any of its Subsidiaries
infringes, misappropriates or otherwise violates any Intellectual Property or other proprietary rights of others, and neither the Company nor any of its Subsidiaries has received any written notice of such claim, and, to the knowledge of the Company
and its Subsidiaries, there are no facts which would form a reasonable basis for any such claim, except as and to the extent that any threatened action, suit, proceeding or claim could not, individually or in the aggregate, reasonably be expected to
result in a Material Adverse Change; and (E) to the knowledge of the Company and its Subsidiaries, no employee of the Company or any of its Subsidiaries is in or has ever been in violation of any term of any employment contract, patent
disclosure agreement, invention assignment agreement, non-competition agreement, non-solicitation agreement, nondisclosure agreement or any restrictive covenant to or with a former employer where the basis of such violation relates to such
employee’s employment with the Company or any of its Subsidiaries or actions undertaken by the employee while employed with the Company of any of its Subsidiaries, except as and to the extent that any violation could not, individually or in the
aggregate, reasonably be expected to result in a Material Adverse Change. “Intellectual Property” shall mean all patents, patent applications, trade and service marks, trade and service mark registrations, trade names, copyrights,
licenses, inventions, trade secrets, technology, know-how and other intellectual property;
(n) neither the Company nor any of
its Subsidiaries is (A) in violation of its certificate of incorporation or limited liability company agreement, certificate of formation, articles of incorporation, by-laws or similar organizational documents; (B) in breach of or
otherwise in default, and no event has occurred which, with notice or lapse of time or both, would constitute such a default in the performance or observance of any term, covenant, obligation, agreement or condition contained in any bond, debenture,
note, indenture, loan agreement, mortgage, deed of trust or any other contract, lease or other instrument to which it is subject or by which it may be bound, or to which any of the material property or assets of the Company or any of its
Subsidiaries is subject; or (C) in violation of any law or statute or any judgment, order, rule or regulation of any court or arbitrator or governmental or regulatory authority, except in the case of (B) and (C) above, as could not,
individually or in the aggregate, reasonably be expected to result in a Material Adverse Change;
(o) the Company and each of
its Subsidiaries have timely filed all federal, state, local and foreign income and franchise tax returns required to be filed and are not in default in the payment of any material taxes which were payable pursuant to said returns or any assessments
with respect thereto, other than any which the Company or any of its Subsidiaries is contesting in good faith. There is no pending dispute with any taxing authority relating to any of such returns and neither the Company nor any of its Subsidiaries
has any knowledge of any proposed liability for any tax to be imposed upon the properties or assets of the Company or any of its Subsidiaries for which there is not an adequate reserve reflected in the financial statements of the Company or Radiancy
included in the Registration Statement;
10
(p) the Company has not distributed and will not distribute any prospectus or other offering
material in connection with the offering and sale of the Shares other than the Disclosure Package or the Prospectus or other materials permitted by the Act to be distributed by the Company; provided, however, that, except as set forth on
Schedule B, the Company has not made and will not make any offer relating to the Shares that would constitute a “free writing prospectus” as defined in Rule 405 under the Act;
(q) the Common Stock of the Company is registered and listed on NASDAQ under the ticker symbol “PHMD.” The Company has not
received any notice that it is not in compliance with the listing or maintenance requirements of NASDAQ. The Company believes that it is, and has no reason to believe that it will not in the foreseeable future continue to be, in material compliance
with all such listing and maintenance requirements. Except as described in the Registration Statement, the Disclosure Package and the Prospectus, there are no affiliations among the Company’s directors and officers and members of FINRA. A
registration statement relating to the Common Stock on Form 8-A or other applicable form under the Exchange Act has become effective;
(r) the Company maintains a system of internal accounting controls sufficient to provide reasonable assurances that (A) transactions are executed in accordance with management’s general or
specific authorization; (B) transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles in the United States and to maintain accountability for assets;
(C) access to assets is permitted only in accordance with management’s general or specific authorization; and (D) the recorded accountability for assets is compared with existing assets at reasonable intervals and appropriate action
is taken with respect to any differences. Except as may be disclosed in the Registration Statement, the Disclosure Package and in the Prospectus, the Company’s internal control over financial reporting is effective; and since the end of the
latest audited fiscal year, there has been no change in the Company’s internal control over financial reporting (whether or not remediated) that has materially affected, or is reasonably likely to materially affect, the Company’s internal
control over financial reporting; to the knowledge of the Company, the consummation of the Merger has not resulted in a material degradation to the effectiveness of the Company’s internal controls;
(s) The Company’s board of directors has validly appointed an audit committee whose composition satisfies the applicable
requirements of NASDAQ Marketplace Rule 5605(c)(2) and the Company’s board of directors and/or the audit committee has adopted a charter that satisfies the requirements of NASDAQ Marketplace Rule 5605(c)(1). Neither the Company’s board of
directors nor the audit committee has been informed, nor is any director of the Company aware, of (A) any material weaknesses or significant deficiencies in the design or operation of the Company’s internal controls which could adversely
affect the Company’s ability to record, process, summarize and report financial data or any material weakness in the Company’s internal controls; or (B) any fraud, whether or not material, that involves management or other employees
of the Company who have a significant role in the Company’s internal controls;
(t) no relationship, direct or indirect,
exists between or among the Company and its Subsidiaries, on the one hand, and the directors, officers, stockholders, customers or
11
suppliers of the Company and its Subsidiaries, on the other hand, which is required to be described in the Registration Statement, the Disclosure Package and the Prospectus which is not so
described. Neither the Company nor any of its Subsidiaries has, directly or indirectly, extended or maintained credit, or arranged for the extension of credit, or renewed an extension of credit, in the form of a personal loan to or for any of its
directors or executive officers in violation of applicable laws, including Section 402 of the Sarbanes-Oxley Act;
(u)
except as described in the Registration Statement, the Disclosure Package and the Prospectus, the Company and each of its Subsidiaries: (A) is and at all times has been in material compliance with all statutes, rules, or regulations applicable
to the Company or any of its Subsidiaries and the ownership, testing, development, manufacture, packaging, processing, use, distribution, marketing, labeling, promotion, sale, offer for sale, storage, import, export or disposal of any product
manufactured or distributed by the Company or any of its Subsidiaries (“Applicable Laws”); (B) has not received any FDA Form 483 notice of adverse finding, warning letter, untitled letter or other correspondence or notice from
the U.S. Food and Drug Administration or any other federal, state, local or foreign governmental authority having authority over the Company or any of its Subsidiaries (“Governmental Authority”) alleging or asserting noncompliance
with any Applicable Laws or any licenses, certificates, approvals, clearances, authorizations, permits and supplements or amendments thereto required by any such Applicable Laws (“Authorizations”); (C) possesses all material
Authorizations and such Authorizations are valid and in full force and effect and is not in material violation of any term of any such Authorizations; (D) has not received notice of any claim, action, suit, proceeding, hearing, enforcement,
investigation, arbitration or other action from any Governmental Authority or third party alleging that any product operation or activity is in violation of any Applicable Laws or Authorizations and has no knowledge that any such Governmental
Authority or third party is considering any such claim, litigation, arbitration, action, suit, investigation or proceeding; (E) has not received notice that any Governmental Authority has taken, is taking or intends to take action to limit,
suspend, modify or revoke any Authorizations and has no knowledge that any such Governmental Authority is considering such action; and (F) has filed, obtained, maintained or submitted all material reports, documents, forms, notices,
applications, records, claims, submissions and supplements or amendments as required by any Applicable Laws or Authorizations and that all such reports, documents, forms, notices, applications, records, claims, submissions and supplements or
amendments were complete and correct in all material respects on the date filed (or were corrected or supplemented by a subsequent submission);
(v) the studies, tests and preclinical and clinical trials conducted by or on behalf of the Company or any of its Subsidiaries were and, if still pending, are, in all material respects, being conducted in
accordance with experimental protocols, procedures and controls pursuant to accepted professional scientific standards and all Applicable Laws and Authorizations, including, without limitation, the Federal Food, Drug and Cosmetic Act and
implementing regulations at 21 C.F.R. Parts 50, 54, 56, 58 and 812; the descriptions of the results of such studies, tests and trials contained in the Registration Statement, the Disclosure Package and the Prospectus are accurate and complete in all
material respects and fairly present the data derived from such studies, tests and trials; except to the extent disclosed in the Registration Statement, the Disclosure Package and the Prospectus, (i) neither the Company nor any of its
Subsidiaries is aware of any studies, tests or trials the results of which the Company
12
believes reasonably call into question the study, test, or trial results described or referred to in the Registration Statement, the Disclosure Package and the Prospectus when viewed in the
context in which such results are described and the clinical state of development, and (ii) neither the Company nor any of its Subsidiaries has received any notice or correspondence from any Governmental Authority requiring the termination,
suspension or material modification of any studies, tests or preclinical or clinical trials conducted by or on behalf of the Company or any of its Subsidiaries;
(w) the Company and each of its Subsidiaries (A) is in compliance with any and all applicable federal, state, local and foreign laws, rules, regulations, decisions and orders relating to the
protection of human health and safety, the environment or hazardous or toxic substances or wastes, pollutants or contaminants (collectively, “Environmental Laws”); (B) has received and is in compliance with all permits,
licenses or other approvals required of it under applicable Environmental Laws to conduct its business; and (C) has not received notice of any actual or potential liability for the investigation or remediation of any disposal or release of
hazardous or toxic substances or wastes, pollutants or contaminants, except in any such case for any such failure to comply, or failure to receive required permits, licenses or approvals, or liability as would not, individually or in the aggregate,
result in a Material Adverse Change;
(x) the Company and each of its Subsidiaries (A) is in compliance, in all material
respects, with any and all applicable foreign, federal, state and local laws, rules, regulations, treaties, statutes and codes promulgated by any and all governmental authorities (including pursuant to the Occupational Health and Safety Act)
relating to the protection of human health and safety in the workplace (“Occupational Laws”); (B) has received all material permits, licenses or other approvals required of it under applicable Occupational Laws to conduct its
business as currently conducted; and (C) is in compliance, in all material respects, with all terms and conditions of such permit, license or approval. No action, proceeding, revocation proceeding, writ, injunction or claim is pending or, to
the knowledge of the Company and its Subsidiaries, threatened against the Company or any of its Subsidiaries relating to Occupational Laws, and neither the Company nor any of its Subsidiaries have knowledge of any facts, circumstances or
developments relating to its operations or cost accounting practices that could reasonably be expected to form the basis for or give rise to such actions, suits, investigations or proceedings;
(y) each employee benefit plan, within the meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974, as
amended (“ERISA”), that is maintained, administered or contributed to by the Company or any of its affiliates for employees or former employees of the Company and its affiliates has been maintained in material compliance with its
terms and the requirements of any applicable statutes, orders, rules and regulations, including but not limited to, ERISA and the Internal Revenue Code of 1986, as amended (the “Code”). No prohibited transaction, within the meaning
of Section 406 of ERISA or Section 4975 of the Code, has occurred with respect to any such plan excluding transactions effected pursuant to a statutory or administrative exemption; and for each such plan that is subject to the funding
rules of Section 412 of the Code or Section 302 of ERISA, no “accumulated funding deficiency” as defined in Section 412 of the Code has been incurred, whether or not waived, and the fair market value of the assets of each
such plan (excluding for these purposes accrued but unpaid contributions) exceeds the present value of all benefits accrued under such plan determined using reasonable actuarial assumptions;
13
(z) except as set forth in the Registration Statement, the Disclosure Package and the
Prospectus, neither the Company nor any of its Subsidiaries has granted rights to develop, manufacture, produce, assemble, distribute, license, market or sell its products to any other person nor is it bound by any agreement that affects the
Company’s or any Subsidiary’s exclusive right to develop, manufacture, produce, assemble, distribute, license, market or sell its products;
(aa) nothing has come to the attention of the Company that has caused the Company to believe that the statistical and market-related data included in the Registration Statement, the Disclosure Package and
the Prospectus is not based on or derived from sources that are reliable and accurate in all material respects and the Company has obtained the written consent to the use of such data from such sources to the extent required;
(bb) other than as contemplated by this Agreement, neither the Company nor any Subsidiary has incurred any liability for any
finder’s or broker’s fee or agent’s commission in connection with the execution and delivery of this Agreement or the consummation of the transactions contemplated hereby;
(cc) neither the Company nor any of its affiliates is presently doing business with the government of Cuba or with any person or
affiliate located in Cuba;
(dd) the Company and each of its Subsidiaries carries, or is covered by, insurance issued by
insurers of nationally recognized financial responsibility in such amounts and covering such risks as is adequate for the conduct of its business and the value of its properties and as is customary for companies engaged in similar businesses in
similar industries; 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 at reasonable cost from
similar insurers as may be necessary to continue its business. All such insurance is outstanding and duly in force on the date hereof;
(ee) neither the Company nor any of its Subsidiaries nor, to the best knowledge of the Company and its Subsidiaries, any director, officer, agent, employee or other person associated with or acting on
behalf of the Company or any of its Subsidiaries has (A) used any corporate funds for any unlawful contribution, gift, entertainment or other unlawful expense relating to political activity; (B) made any direct or indirect unlawful payment
to any foreign or domestic government official or employee from corporate funds; (C) violated or is in violation of any provision of the Foreign Corrupt Practices Act of 1977; or (D) made any bribe, rebate, payoff, influence payment,
kickback or other unlawful payment;
(ff) neither the Company nor any of its Subsidiaries is and, after giving effect to the
offering and sale of the Shares, will not be an “investment company,” as such term is defined in the Investment Company Act of 1940, as amended;
14
(gg) the Company is and, if and to the extent applicable, its Subsidiaries are, in
compliance in all material respects with all applicable provisions of the Sarbanes-Oxley Act and the rules and regulations of the Commission thereunder;
(hh) the Company has established and maintains disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act), which (i) are designed to ensure that
information required to be disclosed by the Company in the reports it files or submits under the Exchange Act, including information about its consolidated Subsidiaries, but not including Radiancy (Israel) Ltd., is accumulated and communicated to
management, including the Company’s principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure, (ii) have been evaluated by the Company’s management, for
effectiveness as of the end of the Company’s most recent fiscal quarter; and (iii) the Company’s principal executive officer and principal financial officer have concluded to be effective at the end of the most recent fiscal quarter;
(ii) Reserved;
(jj) Reserved;
(kk) neither the Company nor any of the Subsidiaries is engaged
in any unfair labor practice; except for matters which would not, individually or in the aggregate, result in a Material Adverse Change, (i) there is (A) no unfair labor practice complaint pending or, to the knowledge of the Company and
its Subsidiaries, threatened against the Company or any of the 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
knowledge of the Company and its Subsidiaries, threatened, (B) no strike, labor dispute, slowdown or stoppage pending or, to the knowledge of the Company and its Subsidiaries, threatened against the Company or any of the Subsidiaries and
(C) no union representation dispute currently existing concerning the employees of the Company or any of the Subsidiaries, (ii) to the knowledge of the Company and its Subsidiaries, no union organizing activities are currently taking place
concerning the employees of the Company or any of the Subsidiaries and (iii) 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, any provision of the Worker Adjustment and Retraining Notification Act of 1988, as amended (“WARN Act”) or the WARN Act’s state, foreign or local equivalent, or any provision of the Employee Retirement Income
Security Act of 1974 or the rules and regulations promulgated thereunder concerning the employees of the Company or any of the Subsidiaries;
(ll) the Company had a reasonable basis for each “forward-looking statement” (within the meaning of Section 27A of the Act or Section 21E of the Exchange Act) contained or incorporated
by reference in the Registration Statement, the Prospectus and the Permitted Free Writing Prospectuses, if any, at the time such statement was made;
(mm) the operations of the Company and the Subsidiaries are and have been conducted at all times in compliance with applicable financial recordkeeping and reporting requirements of the Currency and
Foreign Transactions Reporting Act of 1970, as amended, the money laundering statutes of all jurisdictions, the rules and regulations thereunder and any
15
related or similar rules, regulations or guidelines, issued, administered or enforced by any governmental agency (collectively, the “Money Laundering Laws”); and no action, suit
or proceeding by or before any court or governmental agency, authority or body or any arbitrator or non-governmental authority involving the Company or any of the Subsidiaries with respect to the Money Laundering Laws is pending or, to the knowledge
of the Company and its Subsidiaries, threatened;
(nn) neither the Company nor any of the Subsidiaries nor, to the knowledge
of the Company and its Subsidiaries, any director, officer, agent, employee or affiliate of the Company or any of the Subsidiaries is currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Treasury
Department (“OFAC”); and the Company will not directly or indirectly use the proceeds of the offering of the Shares contemplated hereby, 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;
(oo) no Subsidiary is currently prohibited, directly or indirectly, from paying any dividends to the Company, from making any other distribution on such Subsidiary’s capital stock, from repaying to
the Company any loans or advances to such Subsidiary from the Company or from transferring any of such Subsidiary’s property or assets to the Company or any other Subsidiary of the Company, except 1) Radiancy (Israel) Ltd., and 2) as described
in the Registration Statement, the Disclosure Package and the Prospectus;
(pp) the Company has not received any notice from
NASDAQ regarding the delisting of the Common Stock from NASDAQ; and
(qq) neither the Company nor any of the Subsidiaries nor
any of their respective directors, officers or, to the knowledge of the Company and its Subsidiaries, any of their affiliates or controlling persons has taken, directly or indirectly, any action designed, or which has constituted or might reasonably
be expected to cause or result in the stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of the Shares.
In addition, any certificate signed by any officer of the Company or any of the Subsidiaries and delivered to the Underwriters or counsel for the Underwriters in connection with the offering of the Shares
shall be deemed to be a representation and warranty by the Company, as to matters covered thereby, to each Underwriter.
4.
Certain Covenants of the Company. The Company hereby agrees with each Underwriter:
(a) to furnish such information as
may be required and otherwise to cooperate in qualifying the Shares for offering and sale under the securities or blue sky laws of such states or other jurisdictions as the Representative may designate and to maintain such qualifications in effect
so long as the Representative may request for the distribution of the Shares; provided, however, that the Company shall not be required to qualify as a foreign corporation or to consent to the service of process under the laws of any such
jurisdiction (except service of process with
16
respect to the offering and sale of the Shares); and to promptly advise the Underwriters of the receipt by the Company of any notification with respect to the suspension of the qualification of
the Shares for offer or sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose;
(b) to
make available to the Underwriters, as soon as practicable after this Agreement becomes effective, and thereafter from time to time to furnish to the Underwriters, as many copies of the Prospectus (or of the Prospectus as amended or supplemented if
the Company shall have made any amendments or supplements thereto after the Effective Time) as the Underwriters may reasonably request for the purposes contemplated by the Act; in case any Underwriter is required to deliver (whether physically or
through compliance with Rule 172 under the Act or any similar rule), in connection with the sale of the Shares, a prospectus after the nine-month period referred to in Section 10(a)(3) of the Act, or after the time a post-effective amendment to
the Registration Statement is required pursuant to Item 512(a) of Regulation S-K under the Act, the Company will prepare, at its expense, promptly upon request such amendment or amendments to the Registration Statement and the Prospectus as may
be necessary to permit compliance with the requirements of Section 10(a)(3) of the Act or Item 512(a) of Regulation S-K under the Act, as the case may be;
(c) if, at the time this Agreement is executed and delivered, it is necessary or appropriate for a post-effective amendment to the Registration Statement to be filed with the Commission and become
effective before the Shares may be sold, the Company will use its best efforts to cause such post-effective amendment to be filed and become effective; and the Company will advise the Underwriters promptly and, if requested by the Underwriters, will
confirm such advice in writing, (i) when such post-effective amendment has become effective, and (ii) if Rule 430A under the Act is used, when the Prospectus is filed with the Commission pursuant to Rule 424(b) under the Act (which the
Company agrees to file in a timely manner in accordance with such rules);
(d) if, at any time during the period when a
prospectus is required by the Act to be delivered (whether physically or through compliance with Rule 172 under the Act or any similar rule) in connection with any sale of Shares, the Company or the offering and sale of the Shares contemplated
hereby ceases to be eligible to use the form on which the Registration Statement was filed with the Commission, to (i) promptly notify the Underwriters, (ii) promptly file with the Commission a new registration statement under the Act,
relating to the Shares, or a post-effective amendment to the Registration Statement, which new registration statement or post-effective amendment shall comply with the requirements of the Act and shall be in a form reasonably satisfactory to the
Representative, (iii) use its best efforts to cause such new registration statement or post-effective amendment to become effective under the Act as soon as practicable, (iv) promptly notify the Underwriters of such effectiveness and
(v) take all other actions necessary or appropriate to permit the public offering and sale of the Shares to continue as contemplated in the Prospectus; all references herein to the Registration Statement shall be deemed to include each such new
registration statement or post-effective amendment, if any;
(e) if the third anniversary of the initial effective date of the
Registration Statement shall occur at any time during the period when a prospectus is required by the Act to be delivered (whether physically or through compliance with Rule 172 under the Act or any
17
similar rule) in connection with any sale of Shares, to file with the Commission, prior to such third anniversary, a new registration statement under the Act relating to the Shares, which new
registration statement shall comply with the requirements of the Act and shall be in a form satisfactory to the Representative; the Company shall use its best efforts to cause such new registration statement to become effective under the Act as soon
as practicable, but in any event within 180 days after such third anniversary and promptly notify the Underwriters of such effectiveness; the Company shall take all other action necessary or appropriate to permit the public offering and sale of the
Shares to continue as contemplated in the Prospectus; all references herein to the Registration Statement shall be deemed to include each such new registration statement, if any;
(f) to advise the Underwriters promptly, confirming such advice in writing, of any request by the Commission for amendments or
supplements to the Registration Statement, the Prospectus or any Permitted Free Writing Prospectus or for additional information with respect thereto, or of notice of institution of proceedings for, or the entry of a stop order, suspending the
effectiveness of the Registration Statement and, if the Commission should enter a stop order suspending the effectiveness of the Registration Statement, to use its reasonable best efforts to obtain the lifting or removal of such order as soon as
possible; to advise the Underwriters promptly of any proposal to amend or supplement the Registration Statement or the Prospectus (excluding the filing of any reports or statements under Section 13(a) or 15(d) of the Exchange Act), and to
provide the Underwriters and Underwriters’ counsel copies of any such documents for review and comment a reasonable amount of time prior to any proposed filing and to file no such amendment or supplement to which the Representative shall
reasonably object in writing;
(g) subject to Section 4(f) hereof, to file promptly all reports and documents and any
preliminary or definitive proxy or information statement required to be filed by the Company with the Commission in order to comply with the Exchange Act for so long as a prospectus is required by the Act to be delivered (whether physically or
through compliance with Rule 172 under the Act or any similar rule) in connection with any sale of Shares; and to provide the Underwriters, for the Underwriters’ review and comment, with a copy of such reports and statements and other documents
to be filed by the Company pursuant to Section 13, 14 or 15(d) of the Exchange Act during such period a reasonable amount of time prior to any proposed filing, and to file no such report, statement or document without the prior consent of the
Representative; and to promptly notify the Underwriters of such filing;
(h) to advise the Underwriters promptly of the
happening of any event within the period during which a prospectus is required by the Act to be delivered (whether physically or through compliance with Rule 172 under the Act or any similar rule) in connection with any sale of Shares, which event
could require the making of any change in the Prospectus then being used so that the Prospectus would not include an 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 are made, not misleading, and to advise the Underwriters promptly if, during such period, it shall become necessary to amend or supplement the Prospectus to cause the Prospectus to comply with the requirements
of the Act, and, in each case, during such time, subject to Section 4(f) hereof, to prepare and furnish, at the Company’s expense, to the Underwriters promptly such amendments or supplements to such Prospectus as may be necessary to
reflect any such change or to effect such compliance;
18
(i) if not publicly available within the time proscribed under the Exchange Act, to make
generally available to its security holders, and to deliver to the Underwriters, as soon as practicable but in no event later then 15 months after the end of the Company’s current fiscal quarter, an earnings statement of the Company which will
satisfy the provisions of Section 11(a) of the Act covering a period of twelve months which will satisfy the provisions of Section 11(a) of the Act and Rule 158 under the Act;
(j) to furnish to the Underwriters two copies of the Registration Statement, as initially filed with the Commission, and of all
amendments thereto (including all exhibits thereto and documents incorporated by reference therein);
(k) to furnish to the
Underwriters as early as practicable prior to the Time of Purchase, but not later than one business day prior thereto, for any periods subsequent to the periods covered by the financial statements appearing in the Registration Statement and the
Prospectus, a copy of the latest available unaudited interim and monthly consolidated financial statements, if any, of the Company and the Subsidiaries which have been read by the Company’s independent registered public accountants, as stated
in their letter to be furnished pursuant to Section 6(d) hereof;
(l) to apply the net proceeds from the sale of the
Shares in the manner set forth under the caption “Use of Proceeds” in the Prospectus Supplement;
(m) to pay all
costs, expenses, fees and taxes in connection with (i) the preparation and filing of the Registration Statement, the Basic Prospectus, the Prospectus Supplement, the Prospectus, each Permitted Free Writing Prospectus and any amendments or
supplements thereto, and the printing and furnishing of copies of each thereof to the Underwriters and to dealers (including costs of mailing and shipment), (ii) the registration, issue, sale and delivery of the Shares including any stock or
transfer taxes and stamp or similar duties payable upon the sale, issuance or delivery of the Shares to the Underwriters, (iii) the production, word processing and/or printing of this Agreement, any agreement among underwriters, any dealer
agreements, any powers of attorney and any closing documents (including compilations thereof) and the reproduction and/or printing and furnishing of copies of each thereof to the Underwriters and (except closing documents) to dealers (including
costs of mailing and shipment), (iv) the qualification of the Shares for offering and sale under state or foreign laws and the determination of their eligibility for investment under state or foreign law and the printing and furnishing of
copies of any blue sky surveys or legal investment surveys to the Underwriters and to dealers, (v) any listing of the Shares on any securities exchange or qualification of the Shares for quotation on NASDAQ, (vi) any filing for review of
the public offering of the Shares by FINRA, if any, (vii) the fees and disbursements of any transfer agent or registrar for the Shares, (viii) the costs and expenses of the Company relating to presentations or meetings undertaken in
connection with the marketing of the offering and sale of the Shares to prospective investors and the Underwriters’ sales forces, including, without limitation, expenses associated with the production of road show slides and graphics, fees and
expenses of any consultants engaged in connection with the road show presentations, travel, lodging and other
19
expenses incurred by the officers of the Company and any such consultants and the cost of any aircraft chartered in connection with the road show, and (ix) the performance of the
Company’s other obligations hereunder;
(n) to comply with Rule 433(d) under the Act (without reliance on Rule 164(b)
under the Act) and with Rule 433(g) under the Act;
(o) beginning on the date hereof and ending ninety (90) days after
the date of the Prospectus Supplement (the “Lock-Up Period”), without the prior written consent of the Representative, not to directly or indirectly, offer for sale, sell, contract to sell, pledge, grant any option for the sale of,
or otherwise issue or dispose of, directly or indirectly (or publicly disclose the intention to make any such offer, sale, pledge, grant, issuance or other disposition), any Common Stock or any securities convertible into or exchangeable for, or any
options or rights to purchase or acquire, Common Stock, except (A) to the Underwriters pursuant to this Agreement, (B) the issuance of restricted Common Stock or options to acquire Common Stock pursuant to the Company’s 2005 Equity
Compensation Plan and the 2000 Non-employee Director Stock Option Plan, (C) upon exercise or conversion of securities outstanding as of the date hereof and (D) the issuance of 940,910 shares of Common Stock pursuant to the terms of that
certain Securities Purchase Agreement among the Company and the Investors signatory thereto, dated April 24, 2012, which shares shall be issued under the Registration Statement. The Company agrees not to accelerate the vesting of any option or
warrant or the lapse of any repurchase right prior to the expiration of the Lock-Up Period. Notwithstanding the foregoing, for the purpose of allowing the Underwriters to comply with NASD Conduct Rule 2711(f)(4), if (Y) during the last 17 days
of the Lock-Up Period, the Company releases earnings results or publicly announces other material news or a material event relating to the Company occurs or (Z) prior to the expiration of the Lock-Up Period, the Company announces that it will
release earnings results during the 16-day period beginning on the last day of the Lock-Up Period, then in each case the Lock-Up Period will be extended until the expiration of the 18-day period beginning on the date of release of the earnings
results or the public announcement regarding the material news or the occurrence of the material event, as applicable, unless the Representative waives, in writing, such extension;
(p) prior to the Time of Purchase to issue no press release or other communication directly or indirectly and hold no press conferences
with respect to the Company or any Subsidiary, the financial condition, results of operations, business, properties, assets, or liabilities of the Company or any Subsidiary, or the offering of the Shares, without the Representative’s prior
written consent, such consent not to be unreasonably withheld or delayed;
(q) not, at any time at or after the execution of
this Agreement, to, directly or indirectly, offer or sell any of the Shares by means of any “prospectus” (within the meaning of the Act), or use any “prospectus” (within the meaning of the Act) in connection with the offer or
sale of the Shares, in each case other than the Prospectus, as it may be amended or supplemented;
(r) not to, and to cause
the Subsidiaries not to, take, directly or indirectly, any action designed, or which will constitute, or has constituted, or might reasonably be expected to cause or result in the stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Shares;
20
(s) to use its best efforts to cause the Shares to be listed on NASDAQ and to maintain the
listing of the Common Stock for quotation on NASDAQ;
(t) to maintain a transfer agent and, if necessary under the
jurisdiction of incorporation of the Company, a registrar for the Common Stock; and
(u) that, without the prior consent of
the Representative, it will not make any offer relating to the Shares that would constitute a “free writing prospectus” (as defined in Rule 405 under the Act), other than a Permitted Free Writing Prospectus; the Company will comply with
the requirements of Rule 433 under the Act applicable to any Permitted Free Writing Prospectus, including timely filing with the Commission or retention where required and legending; and the Company agrees that if at any time following issuance of
any Permitted Free Writing Prospectus any event occurred or occurs as a result of which such Permitted Free Writing Prospectus would conflict with the information in the Registration Statement, the Disclosure Package or the Prospectus or would
include an untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they are made, not misleading, the Company will give prompt notice
thereof to the Underwriters and, if requested by the Representative, will prepare and furnish without charge to the Underwriters a Permitted Free Writing Prospectus or other document which will correct such conflict, statement or omission.
5. Reimbursement of the Underwriters’ Expenses. If, after execution of this Agreement, the Shares are not
delivered to the Underwriters for any reason other than the default of one or more Underwriters in its or their respective obligations hereunder, the Company shall, in addition to paying the amounts described in Section 4(m) hereof, reimburse
the Underwriters for all of their out-of-pocket expenses, including the fees and disbursements of their counsel.
6.
Conditions of the Underwriters’ Obligations. The several obligations of the Underwriters hereunder are subject to the accuracy of the representations and warranties on the part of the Company on the date hereof and at the Time of
Purchase, the performance by the Company of its obligations hereunder and to the following additional conditions precedent:
(a) The Company shall furnish to the Underwriters at the Time of Purchase opinions and negative assurances statement of Proskauer Rose,
LLP, special counsel for the Company, dated the Time of Purchase, in form and substance reasonably satisfactory to the Representative.
(b) The Company shall furnish to the Underwriters at the Time of Purchase an opinion of Knobbe Martens Olson & Bear LLP, special intellectual property counsel for the Company, addressed to the
Underwriters, and dated the Time of Purchase, in form and substance reasonably satisfactory to the Representative.
(c) The
Company shall furnish to the Underwriters at the Time of Purchase an opinion of Woodburn and Wedge, Nevada counsel for the Company, addressed to the Underwriters, and dated the Time of Purchase, in form and substance reasonably satisfactory to the
Representative.
21
(d) The Underwriters shall have received from Fahn Kanne & Co. letters dated,
respectively, the date of this Agreement and the Time of Purchase and addressed to the Underwriters in forms satisfactory to the Representative, which letters shall cover, together with the letters delivered pursuant to Section 6(f), the
various financial disclosures contained in the Registration Statement, the Prospectus and the Permitted Free Writing Prospectuses, if any.
(e) The Company shall furnish to the Underwriters at the Time of Purchase an opinion of its internal counsel, addressed to the Underwriters, and dated the Time of Purchase, in form and substance
reasonably satisfactory to the Representative.
(f) The Underwriters shall have received at the Time of Purchase, the
favorable opinion and negative assurances statement of Choate, Hall & Stewart LLP, counsel for the Underwriters, dated the Time of Purchase, in form and substance reasonably satisfactory to the Representative.
(g) No Prospectus or amendment or supplement to the Registration Statement or the Prospectus shall have been filed to which the
Representative shall have objected in writing.
(h) The Prospectus Supplement shall have been filed with the Commission
pursuant to Rule 424(b) under the Act at or before 5:30 P.M., Boston time, on the second full business day after the date of this Agreement (or such earlier time as may be required under the Act).
(i) Prior to and at the Time of Purchase, (i) no stop order with respect to the effectiveness of the Registration Statement shall
have been issued under the Act or proceedings initiated under Section 8(d) or 8(e) of the Act; (ii) the Registration Statement and all amendments thereto shall 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; (iii) neither the Prospectus nor amendment or supplement thereto shall include an 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 are made, not misleading; (iv) the Disclosure Package, and no amendment or supplement thereto, shall include an 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 are made, not misleading; and (v) none of the Permitted Free Writing Prospectuses, if any,
shall include an 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 are made, not misleading.
(j) The Company will at the Time of Purchase deliver to the Underwriters a certificate of its Chief Executive Officer and its Chief
Financial Officer, dated the Time of Purchase, in form reasonably satisfactory to the Representative.
(k) Reserved.
(l) The Company shall have furnished to the Underwriters such other documents and certificates as to the accuracy and
completeness of any statement in the Registration Statement, the Prospectus or any Permitted Free Writing Prospectus as of the Time of Purchase as the Representative may reasonably request.
22
(m) The Shares shall have been approved for listing on NASDAQ, subject only to notice of
issuance at or promptly after the Time of Purchase.
(n) FINRA shall not have raised any objection with respect to the
fairness or reasonableness of the underwriting, or other arrangements of the transactions, contemplated hereby.
7.
Effective Date of Agreement; Termination. This Agreement shall become effective when the parties hereto have executed and delivered this Agreement.
The obligations of the several Underwriters hereunder shall be subject to termination in the absolute discretion of the Representative, if (1) since the time of execution of this Agreement or the
earlier respective dates as of which information is given in the Registration Statement, the Prospectus and the Permitted Free Writing Prospectuses, if any, there has been any change or any development involving a prospective change in the business,
properties, management, financial condition or results of operations of the Company and the Subsidiaries taken as a whole, the effect of which change or development is, in the sole judgment of the Representative, so material and adverse as to make
it impractical or inadvisable to proceed with the public offering or the delivery of the Shares on the terms and in the manner contemplated in the Registration Statement, the Prospectus and the Permitted Free Writing Prospectuses, if any, or
(2) since the time of execution of this Agreement, there shall have occurred: (A) a suspension or material limitation in trading in securities generally on NASDAQ or the New York Stock Exchange; (B) a suspension or material limitation
in trading in the Company’s securities on NASDAQ; (C) a general moratorium on commercial banking activities declared by either federal or New York State authorities or a material disruption in commercial banking or securities settlement or
clearance services in the United States; (D) an outbreak or escalation of hostilities or acts of terrorism involving the United States or a declaration by the United States of a national emergency or war; or (E) any other calamity or
crisis or any change in financial, political or economic conditions in the United States or elsewhere, if the effect of any such event specified in clause (D) or (E), in the sole judgment of the Representative, makes it impractical or
inadvisable to proceed with the public offering or the delivery of the Shares on the terms and in the manner contemplated in the Registration Statement, the Prospectus and the Permitted Free Writing Prospectuses, if any.
If the Representative elects to terminate this Agreement as provided in this Section 7, the Company and each other Underwriter shall
be notified promptly in writing.
If the sale to the Underwriters of the Shares, as contemplated by this Agreement, is not
carried out by the Underwriters for any reason permitted under this Agreement, or if such sale is not carried out because the Company shall be unable to comply with any of the terms of this Agreement, the Company shall not be under any obligation or
liability under this Agreement (except to the extent provided in Sections 4(m), 5 and 9 hereof), and the Underwriters shall be under no obligation or liability to the Company under this Agreement (except to the extent provided in Section 9
hereof).
23
8. Increase in Underwriters’ Commitments. Subject to Sections 6 and 7 hereof, if
any Underwriter shall default in its obligation to take up and pay for the Shares to be purchased by it hereunder (otherwise than for a failure of a condition set forth in Section 6 hereof or a reason sufficient to justify the termination of
this Agreement under the provisions of Section 7 hereof) and if the number of Shares which all Underwriters so defaulting shall have agreed but failed to take up and pay for does not exceed 10% of the total number of Shares, the non-defaulting
Underwriters (including the Underwriters, if any, substituted in the manner set forth below) shall take up and pay for (in addition to the aggregate number of Shares they are obligated to purchase pursuant to Section 1 hereof) the number of
Shares agreed to be purchased by all such defaulting Underwriters, as hereinafter provided. Such Shares shall be taken up and paid for by such non-defaulting Underwriters in such amount or amounts as the Representative may designate with the consent
of each Underwriter so designated or, in the event no such designation is made, such Shares shall be taken up and paid for by all non-defaulting Underwriters pro rata in proportion to the aggregate number of Shares set forth opposite the names of
such non-defaulting Underwriters in Schedule A.
Without relieving any defaulting Underwriter from its obligations hereunder,
the Company agrees with the non-defaulting Underwriters that it will not sell any Shares hereunder unless all of the Shares are purchased by the Underwriters (or by substituted Underwriters selected by the Representative with the approval of the
Company or selected by the Company with the Representative’s approval).
If a new Underwriter or Underwriters are
substituted by the Representative or by the Company for a defaulting Underwriter or Underwriters in accordance with the foregoing provision, the Company or the Representative shall have the right to postpone the time of purchase for a period not
exceeding five business days in order that any necessary changes in the Registration Statement and the Prospectus and other documents may be effected.
The term “Underwriter” as used in this Agreement shall refer to and include any Underwriter substituted under this Section 8 with like effect as if such substituted Underwriter had
originally been named in Schedule A hereto.
If the aggregate number of Shares which the defaulting Underwriter or
Underwriters agreed to purchase exceeds 10% of the total number of Shares which all Underwriters agreed to purchase hereunder, and if neither the non-defaulting Underwriters nor the Company shall make arrangements within the five business day period
stated above for the purchase of all the Shares which the defaulting Underwriter or Underwriters agreed to purchase hereunder, this Agreement shall terminate without further act or deed and without any liability on the part of the Company to any
Underwriter and without any liability on the part of any non-defaulting Underwriter to the Company. Nothing in this paragraph, and no action taken hereunder, shall relieve any defaulting Underwriter from liability in respect of any default of such
Underwriter under this Agreement.
9. Indemnity and Contribution.
(a) The Company agrees to indemnify, defend and hold harmless each Underwriter, its partners, directors and officers, any person who
controls any Underwriter within the meaning of Section 15 of the Act or Section 20 of the Exchange Act, and the successors and
24
assigns of all of the foregoing persons, from and against any loss, damage, expense, liability or claim (including the reasonable cost of investigation) which any Underwriter or any such person
may incur or become subject under the Act, the Exchange Act, the common law or otherwise, insofar as such loss, damage, expense, liability or claim arises out of or is based upon (i) any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement (or in the Registration Statement as amended by any post-effective amendment thereof by the Company) or arises out of or is based upon any omission or alleged omission to state a material fact
required to be stated therein or necessary to make the statements therein not misleading, except insofar as any such loss, damage, expense, liability or claim arises out of or is based upon any untrue statement or alleged untrue statement of a
material fact contained in, and in conformity with information concerning such Underwriter furnished in writing by such Underwriter to the Company expressly for use in, the Registration Statement or arises out of or is based upon any omission or
alleged omission to state a material fact in the Registration Statement in connection with such information, which material fact was not contained in such information and which material fact was required to be stated in such Registration Statement
or was necessary to make such information not misleading or (ii) any untrue statement or alleged untrue statement of a material fact included in any Prospectus (the term Prospectus for the purpose of this Section 9 being deemed to include
any Basic Prospectus, the Prospectus Supplement, the Prospectus and any amendments or supplements to the foregoing), in any Permitted Free Writing Prospectus, in any “issuer information” (as defined in Rule 433 under the Act) of the
Company or in any Prospectus together with any combination of one or more of the Permitted Free Writing Prospectuses, if any, or arises out of or is based upon any omission or alleged omission 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, except, with respect to such Prospectus or Permitted Free Writing Prospectus, insofar as any such loss, damage, expense, liability or claim arises out
of or is based upon any untrue statement or alleged untrue statement of a material fact contained in, and in conformity with information concerning such Underwriter furnished in writing by such Underwriter to the Company expressly for use in, such
Prospectus or Permitted Free Writing Prospectus or arises out of or is based upon any omission or alleged omission to state a material fact in such Prospectus or Permitted Free Writing Prospectus in connection with such information, which material
fact was not contained in such information and which material fact was necessary in order to make the statements in such information, in the light of the circumstances under which they were made, not misleading.
(b) Each Underwriter severally agrees to indemnify, defend and hold harmless the Company, its directors and officers, and any person who
controls the Company within the meaning of Section 15 of the Act or Section 20 of the Exchange Act, and the successors and assigns of all of the foregoing persons, from and against any loss, damage, expense, liability or claim (including
the reasonable cost of investigation) which, jointly or severally, the Company or any such person may incur or become subject under the Act, the Exchange Act, the common law or otherwise, insofar as such loss, damage, expense, liability or claim
arises out of or is based upon (i) any untrue statement or alleged untrue statement of a material fact contained in, and in conformity with information concerning such Underwriter furnished in writing by such Underwriter to the Company
expressly for use in, the Registration Statement (or in the Registration Statement as amended by any post-effective amendment thereof by the Company), or arises out of or is based upon any omission or alleged omission to state a material fact in
such Registration Statement in connection with such information, which material fact was not
25
contained in such information and which material fact was required to be stated in such Registration Statement or was necessary to make such information not misleading or (ii) any untrue
statement or alleged untrue statement of a material fact contained in, and in conformity with information concerning such Underwriter furnished in writing by such Underwriter to the Company expressly for use in, a Prospectus or a Permitted Free
Writing Prospectus, or arises out of or is based upon any omission or alleged omission to state a material fact in such Prospectus or Permitted Free Writing Prospectus in connection with such information, which material fact was not contained in
such information and which material fact was necessary in order to make the statements in such information, in the light of the circumstances under which they were made, not misleading.
(c) If any action, suit or proceeding (each, a “Proceeding”) is brought against a person (an “indemnified
party”) in respect of which indemnity may be sought against the Company or an Underwriter (as applicable, the “indemnifying party”) pursuant to subsection (a) or (b), respectively, of this Section 9, such
indemnified party shall promptly notify such indemnifying party in writing of the institution of such Proceeding and such indemnifying party shall assume the defense of such Proceeding, including the employment of counsel reasonably satisfactory to
such indemnified party and payment of all fees and expenses; provided, however, that the omission to so notify such indemnifying party shall not relieve such indemnifying party from any liability which such indemnifying party may have to any
indemnified party or otherwise. The indemnified party or parties shall have the right to employ its or their own counsel in any such case, but the fees and expenses of such counsel shall be at the expense of such indemnified party or parties unless
the employment of such counsel shall have been authorized in writing by the indemnifying party in connection with the defense of such Proceeding or the indemnifying party shall not have, within a reasonable period of time in light of the
circumstances, employed counsel to defend such Proceeding or such indemnified party or parties shall have reasonably concluded that there may be defenses available to it or them which are different from, additional to or in conflict with those
available to such indemnifying party (in which case such indemnifying party shall not have the right to direct the defense of such Proceeding on behalf of the indemnified party or parties), in any of which events such reasonable fees and expenses
shall be borne by such indemnifying party and paid as incurred (it being understood, however, that such indemnifying party shall not be liable for the expenses of more than one separate counsel (in addition to any local counsel) in any one
Proceeding or series of related Proceedings in the same jurisdiction representing the indemnified parties who are parties to such Proceeding). The indemnifying party shall not be liable for any settlement of any Proceeding effected without its
written consent, such consent not to be unreasonably withheld, but, if settled with its written consent, such indemnifying party agrees to indemnify and hold harmless the indemnified party or parties from and against any loss or liability by reason
of such settlement. Notwithstanding the foregoing sentence, if at any time an indemnified party shall have requested an indemnifying party to reimburse the indemnified party for reasonable fees and expenses of counsel as contemplated by the second
sentence of this Section 9(c), then the indemnifying party agrees that it shall be liable for any settlement of any Proceeding effected without its written consent if (i) such settlement is entered into more than 60 business days after
receipt by such indemnifying party of the aforesaid request, (ii) such indemnifying party shall not have fully reimbursed the indemnified party in accordance with such request prior to the date of such settlement and (iii) such indemnified
party shall have given the indemnifying party at least 30 days’ prior notice of its intention to settle. No indemnifying party shall, without the
26
prior written consent of the indemnified party, effect any settlement of any pending or threatened Proceeding in respect of which any indemnified party is or could have been a party and indemnity
could have been sought hereunder by such indemnified party, unless such settlement includes an unconditional release of such indemnified party from all liability on claims that are the subject matter of such Proceeding and does not include an
admission of fault or culpability or a failure to act by or on behalf of such indemnified party.
(d) If the indemnification
provided for in this Section 9 is unavailable to an indemnified party under subsections (a) and (b) of this Section 9 or insufficient to hold an indemnified party harmless in respect of any losses, damages, expenses, liabilities
or claims referred to therein, then each applicable indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of such losses, damages, expenses, liabilities or claims (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company on the one hand and the Underwriters on the other hand from the offering of the Shares or (ii) if the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Company on the one hand and of the Underwriters on the other in connection with
the statements or omissions which resulted in such losses, damages, expenses, liabilities or claims, as well as any other relevant equitable considerations. The relative benefits received by the Company on the one hand and the Underwriters on the
other shall be deemed to be in the same respective proportions as the total proceeds from the offering (net of underwriting discounts and commissions but before deducting expenses) received by the Company, and the total underwriting discounts and
commissions received by the Underwriters, bear to the aggregate public offering price of the Shares. The relative fault of the Company on the one hand and of the Underwriters on the other shall be determined by reference to, among other things,
whether the untrue statement or alleged untrue statement of a material fact or omission or alleged omission relates to information supplied by the Company or by the Underwriters and the parties’ relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission. The amount paid or payable by a party as a result of the losses, damages, expenses, liabilities and claims referred to in this subsection shall be deemed to include any legal or other
fees or expenses reasonably incurred by such party in connection with investigating, preparing to defend or defending any Proceeding.
(e) The Company and the Underwriters agree that it would not be just and equitable if contribution pursuant to this Section 9 were determined by pro rata allocation or by any other method of
allocation that does not take account of the equitable considerations referred to in subsection (d) above. Notwithstanding the provisions of this Section 9, the Underwriters shall not be required to contribute any amount in excess of the
amount by which the total price at which the Shares underwritten by such Underwriter and distributed to the public were offered to the public exceeds the amount of any damage which such Underwriter has otherwise been required to pay by reason of
such untrue statement or alleged untrue statement or omission or alleged omission. 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. The Underwriters’ obligations to contribute pursuant to this Section 9 are several in proportion to their respective underwriting commitments and not joint.
27
(f) The indemnity and contribution agreements contained in this Section 9 and the
covenants, warranties and representations of the Company contained in this Agreement shall remain in full force and effect regardless of any investigation made by or on behalf of any Underwriter, its partners, directors or officers or any person
(including each partner, director or officer of such person) who controls any Underwriter within the meaning of Section 15 of the Act or Section 20 of the Exchange Act, or by or on behalf of the Company, its directors or officers or any
person who controls the Company within the meaning of Section 15 of the Act or Section 20 of the Exchange Act, and shall survive any termination of this Agreement or the issuance and delivery of the Shares. The Company and each Underwriter
agree promptly to notify each other of the commencement of any Proceeding against it and, in the case of the Company, against any of the Company’s officers or directors in connection with the issuance and sale of the Shares, or in connection
with the Registration Statement, any Basic Prospectus, the Prospectus Supplement, the Prospectus or any Permitted Free Writing Prospectus.
10. Notices. Except as otherwise herein provided, all statements, requests, notices and agreements shall be in writing or by telegram or facsimile and, if to the Representative or the Underwriters,
shall be sufficient in all respects if delivered or sent to Canaccord Genuity Inc., 99 High Street, 12th Floor, Boston, MA 02210, Attention: Syndicate Department (fax no.: 617-788-1553) with a copy (which shall not constitute notice) to Choate,
Hall & Stewart LLP, Two International Place, Boston, MA 02110, Attention: Fredrick P. Callori, Esq. (fax no.: 617-248-4000); and if to the Company, shall be sufficient in all respects if delivered or sent to the Company at the offices of
the Company at 147 Keystone Drive, Montgomeryville, PA 18936, Attention: Davis Woodward, Esq. (fax no.: 215-619-3208) with a copy (which shall not constitute notice) to Proskauer Rose LLP, Eleven Times Square, New York, NY 10036, Attention: Paul
Rachlin, Esq. (fax no.: 212-969-2900). Any party hereto may change the address for receipt of communications by giving written notice to the others.
In accordance with the requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)), the Underwriters are required to obtain, verify and record information
that identifies their respective clients, including the Company, which information may include the name and address of their respective clients, as well as other information that will allow the Underwriters to properly identify their respective
clients.
11. Governing Law; Construction. This Agreement and any claim, counterclaim or dispute of any kind or nature
whatsoever arising out of or in any way relating to this Agreement (“Claim”), directly or indirectly, shall be governed by, and construed in accordance with, the laws of the Commonwealth of Massachusetts, without giving effect to
its choice of law rules or principles. The section headings in this Agreement have been inserted as a matter of convenience of reference and are not a part of this Agreement.
12. Submission to Jurisdiction. Except as set forth below, no Claim may be commenced, prosecuted or continued in any court other than the courts of the Commonwealth of Massachusetts or in the
United States District Court located in the Commonwealth of Massachusetts, which courts shall have jurisdiction over the adjudication of such matters, and the Company consents to the jurisdiction of such courts and personal service with respect
thereto. The Company hereby consents to personal jurisdiction, service and venue in any court in which any Claim arising out of or in any way relating to this Agreement is brought by any third party
28
against any Underwriter or any indemnified party. Each Underwriter and the Company (on its behalf and, to the extent permitted by applicable law, on behalf of its shareholders and affiliates)
waives all right to trial by jury in any action, proceeding or counterclaim (whether based upon contract, tort or otherwise) in any way arising out of or relating to this Agreement. Each of the parties agrees that a final judgment in any such
action, proceeding or counterclaim brought in any such court shall be conclusive and binding upon such party and may be enforced in any other courts to the jurisdiction of which such party or is or may be subject, by suit upon such judgment.
13. Parties at Interest. The Agreement herein set forth has been and is made solely for the benefit of the
Underwriters and the Company and to the extent provided in Section 9 hereof the controlling persons, partners, directors and officers referred to in such Section 9, and their respective successors, assigns, heirs, personal representatives
and executors and administrators. No other person, partnership, association or corporation (including a purchaser, as such purchaser, from any of the Underwriters) shall acquire or have any right under or by virtue of this Agreement.
14. No Fiduciary Relationship. The Company hereby acknowledges that the Underwriters are acting solely as underwriters in
connection with the purchase and sale of the Company’s securities. The Company further acknowledges that the Underwriters are acting pursuant to a contractual relationship created solely by this Agreement entered into on an arm’s length
basis, and in no event do the parties intend that the Underwriters act or be responsible as a fiduciary to the Company, its management, shareholders or creditors or any other person in connection with any activity that the Underwriters may undertake
or have undertaken in furtherance of the purchase and sale of the Company’s securities, either before or after the date hereof. The Underwriters hereby expressly disclaim any fiduciary or similar obligations to the Company, either in connection
with the transactions contemplated by this Agreement or any matters leading up to such transactions, and the Company hereby confirms its understanding and agreement to that effect. The Company and the Underwriters agree that they are each
responsible for making their own independent judgments with respect to any such transactions and that any opinions or views expressed by the Underwriters to the Company regarding such transactions, including, but not limited to, any opinions or
views with respect to the price or market for the Company’s securities, do not constitute advice or recommendations to the Company. The Company hereby waives and releases, to the fullest extent permitted by law, any claims that the Company may
have against the Underwriters with respect to any breach or alleged breach of any fiduciary or similar duty to the Company in connection with the transactions contemplated by this Agreement or any matters leading up to such transactions.
15. Counterparts. This Agreement may be signed by the parties in one or more counterparts which together shall constitute one and
the same agreement among the parties. In the event any signature is delivered by facsimile, digital or electronic transmission, such transmission shall constitute delivery of the manually executed original.
16. Successors and Assigns. This Agreement shall be binding upon the Underwriters and the Company and their successors and assigns
and any successor or assign of any substantial portion of the Company’s and any of the Underwriters’ respective businesses and/or assets.
29
17. General Provisions. This Agreement constitutes the entire agreement of the
parties to this Agreement and supersedes all prior written or oral and all contemporaneous oral agreements, understandings and negotiations with respect to the subject matter hereof. This Agreement may not be amended or modified unless in writing by
all of the parties hereto, and no condition herein (express or implied) may be waived unless waived in writing by each party for whom the condition is meant to benefit. In all dealings hereunder, the Representative may, in its discretion, act on
behalf of each of the Underwriters, and the parties hereto shall be entitled to act and rely upon any statement, request, notice or agreement on behalf of any Underwriter made or given by the Representative on behalf of the Underwriters.
[The Remainder of This Page Intentionally Left Blank; Signature Page Follows]
30
If the foregoing correctly sets forth the understanding among the Company and the several
Underwriters, please so indicate in the space provided below for that purpose, whereupon this Agreement and the Underwriters’ acceptance shall constitute a binding agreement among the Company and the Underwriters, severally.
|
|
|
|
|
| Very truly yours, |
|
| PhotoMedex, Inc. |
|
|
| By: |
|
/s/ Dennis McGrath |
|
|
Name: |
|
Dennis McGrath |
|
|
Title: |
|
President & CEO |
|
|
|
|
|
| Accepted and agreed to as of the date first above written, on behalf of itself and as Representative of the Underwriters |
|
| Canaccord Genuity Inc. |
|
|
| By: |
|
/s/ Jeffrey G. Barlow |
|
|
Name: |
|
Jeffrey G. Barlow |
|
|
Title: |
|
Managing Director |
[Underwriting Agreement]
SCHEDULE A
List of Underwriters
|
|
|
|
|
| Name of Underwriter |
|
Number of
Shares |
|
|
|
| Canaccord Genuity Inc. |
|
|
1,770,144 |
|
|
|
| Maxim Group LLC |
|
|
312,378 |
|
|
|
| Total |
|
|
2,082,522 |
|
|
|
|
|
|
Purchase Price – Underwriters’ Commission
The offering price per share for the Shares shall be $13.23 per share.
The purchase price per share for the Shares to be paid by the several Underwriters shall be $12.6439, being an amount equal to the offering price set forth above, less $0.5861 per Share, representing the
underwriting commission as set forth below.
The total underwriting commission is 4.43% of the aggregate cash proceeds received from the sale
of the Shares.
SCHEDULE B
Permitted Free Writing Prospectuses
None.
EXHIBIT A
List of Subsidiaries of PhotoMedex, Inc.
| 2. |
Radiancy (Israel) Ltd. |
| 3. |
Photo Therapeutics Limited |
