Exhibit 10.30
OPTICAL SENSORS
INCORPORATED
SELLING AGENCY
AGREEMENT
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FLEMING
SECURITIES INCORPORATED
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February 6, 2006
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17797 North Perimeter Drive, Suite
105
Scottsdale, Arizona 85255
Gentlemen:
The undersigned, OPTICAL SENSORS
INCORPORATED d/b/a väsamed, a Delaware corporation with its
principal office located at 7615 Golden Triangle Drive, Suite C,
Eden Prairie, Minnesota 55344 (the “Company”), confirms
its agreement with you as follows:
1. Description of Securities
and Offering .
(a) The Company proposes to issue
and sell in a private placement solely to accredited investors, as
such term is defined in Rule 501(a) promulgated under the
Securities Act of a 1933, as amended (“1933 Act”)
(“Purchasers”), a series of convertible promissory
notes in the aggregate principal amount of $4,500,000 (the
“Notes”) with detachable warrants (the
“Warrants”), the Notes and Warrants, collectively,
being referred to herein as (the “Securities”). The
Securities will be sold pursuant the terms of a Note and Warrant
Purchase Agreement between the Company and each Purchaser in the
form annexed hereto as Exhibit “A” (the “Purchase
Agreement”). The minimum investment is $100,000, although the
Company reserves the right to accept purchases of Securities for
such lesser amounts as it may determine in its sole discretion. The
Notes are convertible into shares of the Company’s Series C
Preferred stock (“Series C Stock”) at a conversion
price of $90.00 per share. Each share of Series C Stock by its
terms is initially convertible into 40 shares of the
Company’s common stock at a conversion price of $2.25 per
share. The initial Warrant exercise price is $2.25 per share and is
subject to adjustment if the Company issues securities at a price
of less than $2.25 per share, subject to customary exceptions, as
set forth in the Warrant. The Warrants are exercisable for a period
of five years from the date of issuance. The Purchasers are also
entitled to demand and piggyback registration rights with respect
to the shares of Common Stock underlying the Series C Preferred
Stock issuable upon conversion of the Note and the Common Stock
issuable upon exercise of the Warrants.
(b) You have advised the Company
that Fleming Securities, Inc. (“Fleming Securities” or
“Agent”) will act as exclusive agent for the Company
for the offering of the Securities. You will offer the Securities
on a “best efforts” basis. The Company shall accept or
reject a Purchase Agreement signed by a Purchaser and the funding
offered thereby as such agreement is presented to
the Company by Agent up to the
aggregate principal amount of $4,500,000. The Company retains the
right to reject any Purchase Agreement in whole or in part in its
reasonable discretion. Each acceptance by the Company will
constitute a closing on the accepted Purchase Agreement, and the
Company shall promptly issue to the Purchaser a Note and Warrant
pursuant to the Purchase Agreement. A final closing shall be held
no later than seven (7) business days after termination of the
private placement of the Securities for the purpose of closing any
remaining sales, paying commissions and expenses to Agent and
issuing Placement Agent’s Warrants, as set forth below (the
“Closing Date”, and on such date the final
“Closing” shall occur). You are authorized to offer the
Securities until and including April 6, 2006, which period may
be extended for thirty (30) days upon written request to the
Company or additional periods as mutually agreed to by the Agent
and the Company. The term “Offering Period,” as used
herein, shall include the entire period during which the Securities
may be offered.
In addition, upon the final Closing
Date, the Company agrees to sell to Fleming Securities for an
aggregate price of $100, warrants (“Placement Agent’s
Warrants”) for the purchase of that number of shares of
Common Stock that is equal to 10% of the number of shares of Common
Stock that may be purchased pursuant to warrants sold in this
bridge financing pursuant to the Purchase Agreement
(“Placement Agent’s Shares”). The Placement
Agent’s Warrants will be exercisable at a price of $2.70 per
Placement Agent’s Share for a period of ten (10) years
commencing as of the final Closing Date, such price being
adjustable as provided in the Placement Agent’s Warrants
which shall be in the form attached hereto as Exhibit
“B.”
2. Representations, Warranties
and Agreements of the Company . The Company represents,
warrants to and agrees with you that:
(a) Applications or other filings
necessary to qualify the Securities for sale or to obtain a valid
exemption from qualification in the states set forth in Schedule
2(b) or as you may reasonably designate from time to time (the
“Designated States”), including an exemption from
federal securities laws, have been or will be timely filed to
permit the lawful offer and sale of the Securities in such states.
These applications or other filings, as they may be amended from
time to time, are referred to herein as the “Blue Sky
Applications”. The Blue Sky Applications shall be prepared
and filed by Company counsel and will be accomplished in a timely
manner. The Company shall timely prepare and file a Form D in
connection with the offering contemplated hereby.
(b) The Company knows of no
outstanding claims for services either in the nature of a
finder’s fee or origination fee with respect to the sale of
the Securities hereunder resulting from its acts for which you or
the Company may be responsible.
(c) This Agreement has been duly
authorized by all necessary corporate action of the Company and,
when executed and delivered, will be a legal, valid and binding
obligation of the Company, enforceable in accordance with its
terms, except to the extent that the enforceability hereof may be
limited by bankruptcy, insolvency, moratorium or similar laws
affecting creditors’ rights generally or by general
principles of equity, and except that the indemnification
provisions of the Agreement may be held to be in violation of
public policy under either federal or state laws in the context of
the offer or sale of securities.
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(d) The Securities to be sold by the
Company hereunder have been duly authorized. The Securities, when
issued and delivered pursuant to this Agreement, will be validly
issued and delivered pursuant to this Agreement and will be valid
and binding obligations of the Company, enforceable in accordance
with their terms. A sufficient number of shares of the Series C
Stock and Common Stock of the Company have been reserved for
issuance of all shares of Series C Stock and Common Stock that may
be issued upon the conversion of the Note, the Series C Stock and
upon the exercise of the Warrants and Placement Agent’s
Warrants. Upon payment for, and delivery of, the Securities
pursuant to the Purchase Agreement, the Purchasers will acquire
good and marketable title to the Securities, free and clear of all
liens, encumbrances or claims, except those created by the
Purchasers.
(e) The Placement Agent’s
Warrants and the Placement Agent’s Shares to be issued upon
exercise of the Placement Agent’s Warrants, when issued and
delivered to you, will constitute valid and binding obligations of
the Company in accordance with their terms. All Placement
Agent’s Shares issuable upon exercise of the Placement
Agent’s Warrants, when issued in accordance with the terms of
this Agreement upon the due exercise of the Placement Agent’s
Warrants, will be fully paid and non-assessable, and subject to no
preemptive rights or similar rights on the part of any person or
entity.
(f) Neither the Company nor any
affiliate has offered to sell, offered for sale or sold any
securities, the offer to sell, offer for sale or sale of which
would be integrated (as that term is used in Rule 502(a) of
Regulation D promulgated under the 1933 Act (“Regulation
D”)) with the offers to sell, offers for sale and sales of
the Securities so as to render the exemption upon which the Company
is relying in connection with the sale of Securities unavailable
with respect to the offering of the Securities
hereunder.
(g) The Company will perform its
obligations with respect to the offering in a manner intended to be
in compliance with the requirements of Regulation D. The Company is
not disqualified from claiming exemption under Regulation D by Rule
505(b)(2)(iii) of Regulation D and the offering meets the
requirements to claim exemption under Rule 506 of Regulation
D.
3. Appointment of Placement
Agent and Representations, Warranties and Agreements Thereof
.
(a) On the basis of the
representations, warranties and agreements herein contained, and
subject to the terms and conditions herein set forth, the Company
appoints you as its exclusive agent during the Offering Period to
effect sales of the Securities for the account of the Company upon
the other terms and conditions set forth herein and you agree to
use your best efforts as such agent to produce Purchasers for the
Securities during the Offering Period upon the terms and conditions
set forth herein.
(b) You may in your discretion use
the services of other registered brokers or dealers
(“Participating Dealers”) in connection with the
offering and sale of the Securities, and you may allow and pay to
such Participating Dealers (but only as consideration for services
rendered in placement of the Securities), out of the compensation
payable to you by the Company on account of the sale of the
Securities, an amount as determined by you in your discretion,
provided that all such
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Participating Dealers are members in
good standing of the National Association of Securities Dealers,
Inc. (“NASD”) who are actually engaged in the
investment banking or securities business and who have executed and
delivered to you the written agreement prescribed by
Section 24(c) of Article III of the NASD’s Rules of Fair
Practice.
(c) As compensation for your
services hereunder, the Company will (i) pay to you as Agent,
a selling commission equal to 10% of the gross proceeds from the
sales of the Notes and Warrants sold in this bridge financing;
(ii) sell to the Agent, for an aggregate price of $100,
ten-year warrants to purchase Common Stock at 120% of the exercise
price of the warrants sold in this bridge financing, a number of
shares of Common Stock equal to 10% of the number of shares of
Common Stock that may be purchased pursuant to warrants sold in
this bridge financing; (iii) pay the Agent a non-accountable
expense allowance equal to 3% of the gross proceeds from sales of
Notes and Warrants in this bridge financing; and
(iv) reimburse the Agent for its accountable expenses of this
bridge financing not to exceed $50,000. Such amounts shall be paid
to you at the time of the final Closing Date of this offering. No
compensation shall be payable under this Agreement with respect to
the exercise of any of the Placement Agent’s
Warrants.
(d) Your appointment by the Company
as exclusive agent shall commence upon the date of the execution of
this Agreement, and shall continue until and through the last day
of the Offering Period, unless (i) the Securities shall be
completely sold prior to that date, (ii) the offering has been
terminated by agreement between you and us, or (iii) this
Agreement shall be terminated at a prior date as provided
herein.
(e) It is expressly understood and
agreed that you are an independent contractor and that neither you
nor your agent or employees are in any manner employees of the
Company and that the Company shall have no responsibility for
unemployment insurance, social security or income tax withholding
in connection with your employees.
(f) You represent that you are a
member in good standing of the NASD and a broker-dealer registered
as such under the Securities Exchange Act of 1934, as amended
(“1934 Act”), and under the securities laws of the
states in which the Securities will be offered or sold by you and
in which states registration as a broker-dealer is required and/or
necessary.
(g) You will offer the Securities in
accordance with the applicable provisions of the 1933 Act in a
manner so as to preserve the exemption from registration as
provided in Rule 506 and Regulation D under the 1933 Act and will
not take, or omit to take, any action in connection with offers and
sales of the Securities which would cause the offering not to be
made in compliance therewith; you will not offer the Securities for
sale in any jurisdiction unless and until the Company or your
counsel shall have advised you that the Securities are exempt from
registration under the state securities laws applicable thereto;
and you have not and will not take any action which would require
registration of the Securities under any federal or state
securities laws, or any other laws, orders, rules or regulations
without the consent of the Company.
(h) The offering of the Securities
will be limited to persons who have executed a Purchase Agreement
and who have otherwise satisfied you as to such person’s
status as an “accredited investor” as defined in Rule
501(a) promulgated under the 1933 Act.
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(i) You
