SUPERCONDUCTOR TECHNOLOGIES
INC.
PLACEMENT AGENT
AGREEMENT
MDB Capital
Group LLC
401 Wilshire Boulevard, Suite 1020
Santa Monica, California 90401
Pursuant to the
terms of the Common Stock Purchase Agreements in the form of
Exhibit A attached hereto (the “ Purchase
Agreements ”), Superconductor Technologies Inc., a
Delaware corporation (the “ Company ”), proposes
to sell to the Purchasers identified therein (each a “
Purchaser ” and, collectively, the “
Purchasers ”), an aggregate of 3,752,005 shares of
Common Stock, $0.001 par value (the “ Common Stock
”), of the Company. The aggregate of 3,752,005 shares so
proposed to be sold is hereinafter referred to as the “
Shares .” Any capitalized terms used but not
specifically defined herein shall have the meanings set forth in
the form of Purchase Agreement attached hereto as
Exhibit A . Pursuant to this Placement Agent Agreement
(this “ Agreement ”), the Company hereby
confirms its agreement with MDB Capital Group LLC (“
MDB ”) as follows:
1.
Agreement to Act as Placement Agent; Placement of Securities
. On the basis of the representations, warranties and agreements of
the Company herein contained, and subject to all the terms and
conditions of this Agreement:
(a) The
Company hereby authorizes MDB to act as its exclusive agent (in
such capacity, the “ Placement Agent ”) to
solicit offers for the purchase of all or part of the Shares from
the Company in connection with the proposed public offering of the
Shares (the “ Offering ”). Until July 3,
2009, the Company shall not, without the prior consent of the
Placement Agent, solicit or accept offers to purchase Shares
otherwise than through the Placement Agent.
(b) The
Placement Agent shall make commercially reasonable efforts to
assist the Company in obtaining performance by each Purchaser whose
offer to purchase Shares has been solicited by the Placement Agent
and accepted by the Company, but the Placement Agent shall not,
except as otherwise provided in this Agreement, be obligated to
disclose the identity of any potential purchaser or have any
liability to the Company in the event any such purchase is not
consummated for any reason. Under no circumstances will the
Placement Agent be obligated to purchase any Shares for its own
account and, in soliciting purchases of Shares, the Placement Agent
shall act solely as the Company’s agent and not as
principal.
(c) The
Company shall have the sole right to accept offers to purchase the
Shares and may reject any such offer, in whole or in part. The
Placement Agent shall have the
right, in its
discretion reasonably exercised, without notice to the Company, to
reject any offer to purchase Shares received by it, in whole or in
part, and any such rejection shall not be deemed a breach of its
agreement contained herein.
(d) The
purchases of the Shares by the Purchasers shall be evidenced by the
execution of the Purchase Agreements.
(e) As
compensation for services rendered, on each Closing Date the
Company shall pay to the Placement Agent by wire transfer of
immediately available funds to an account or accounts designated by
the Placement Agent, an amount equal to six percent (6%) of the
gross proceeds received by the Company from the sale of the Shares
on such Closing Date.
(f) No
Shares which the Company has agreed to sell pursuant to the
Purchase Agreements shall be deemed to have been purchased and paid
for, or sold by the Company, until such Shares shall have been
delivered to the Purchaser thereof against payment by such
Purchaser. If the Company shall default in its obligations to
deliver Shares to a Purchaser whose offer it has accepted, the
Company shall indemnify and hold the Placement Agent harmless
against any loss, claim or damage arising from or as a result of
such default by the Company.
(g) The
Placement Agent shall make reasonable efforts to obtain a
communication from the Financial Industry Regulatory Authority
(“ FINRA ”) indicating that FINRA shall have
raised no objection to the fairness and reasonableness of the
placement agent terms and arrangements.
2. The
Closing . The time and date of closing and delivery of the
documents required to be delivered to the Placement Agent will be
as set forth in the Purchase Agreements.
3.
Representations and Warranties of the Company . The Company
hereby makes the same representations and warranties to the
Placement Agent as those made to the Purchasers under the Purchase
Agreements.
4.
Representations and Warranties of the Placement Agent . The
Placement Agent hereby represents and warrants to the Company that
it has all necessary licenses to act as Placement Agent
hereunder.
5.
Covenants of the Company . The Company hereby agrees with
the Placement Agent that:
(a) The
Company consents to the use by the Placement Agent of the
Registration Statement and Prospectus and any issuer free writing
prospectus or any amendment or supplement thereto and any issuer
information used or referred to in any Permitted Free Writing
Prospectus (as defined below) in connection with the
Offering.
(b) The
Company will make “generally available” (as such term
is described in Rule 158(b) of the Act) to its security holders and
to the Placement Agent as soon as practicable, but in any event not
later than twelve months after the effective date of the
Registration Statement (as defined in Rule 158(c) under the Act),
an earnings statement of the
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Company and the
Subsidiaries which need not be audited, complying with Section
11(a) of the Act (including, at the option of the Company,
Rule 158 under the Act).
(c) The
Company will take all action required in connection with the
qualification of the Shares under the securities or blue sky laws
of such jurisdictions as the Placement Agent may request and
continue such qualification in effect so long as reasonably
required; provided, the Company shall not be required to qualify as
a foreign corporation or to file a general consent to service of
process in any jurisdiction where it is not now so qualified or
required to file such a consent.
(d) Whether
or not the Offering or any of the transactions contemplated in this
Agreement or the Registration Statement and Prospectus are
consummated or this Agreement is terminated, to pay (i) all
costs, expenses, fees and taxes incidental to and in connection
with: (A) the preparing, printing, filing and distributing of
the Registration Statement, any Preliminary Prospectus, the
Prospectus and any issuer free writing prospectus and all
amendments and supplements thereto (including, without limitation,
financial statements and exhibits), and all other agreements,
memoranda, correspondence and other documents prepared and
delivered in connection herewith, (B) negotiating, printing,
processing and distributing (including, without limitation, word
processing and duplication costs) and delivering, each of the
Preliminary Prospectus, the Prospectus and any issuer free writing
prospectus and all amendments and supplements thereto (including,
without limitation, financial statements and exhibits), and all
other agreements, memoranda, correspondence and other documents
prepared and delivered in connection herewith, (C) the
preparing, issuing and delivering the Shares, (D) qualifying
the Shares for offer and sale under the securities or blue sky laws
of the several states and (E) furnishing such copies of the
Registration Statement, any Preliminary Prospectus and the
Prospectus, and all amendments and supplements thereto, as may
reasonably be requested for use by the Placement Agent,
(ii) all reasonable fees and expenses of the counsel,
accountants and any other experts or advisors retained by the
Company, (iii) all fees and expenses (including reasonable
fees and expenses of counsel) of the Company in connection with
approval of the Shares by the Depository Trust Company for
“book-entry” transfer, (iv) any listing fees of
the Shares on the NASDAQ Stock Market, (v) 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 Placement Agent,
(vi) all fees, disbursements and out-of-pocket expenses
incurred by the Placement Agent in connection with its services to
be rendered hereunder including, without limitation, reasonable
travel and lodging expenses, reasonable 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 expenses incurred by any
such consultants, word processing charges, messenger and
duplicating services, facsimile expenses and other customary
expenditures, including (subject to the following sentence)
reasonable legal fees, (vii) the fees of FINRA in connection
with its review of the Offering, and (viii) all other costs
and expenses incident to the performance by the Company of its
obligations hereunder. The Placement Agent will not incur any costs
to be reimbursed hereunder without the prior written consent of the
Company; provided, at Closing, the Company shall reimburse the
Placement Agent’s reasonable legal fees and expenses incurred
by it in connection with the Offering, up to a maximum aggregate of
$30,000; provided, further, that such reimbursement payment will
fully satisfy all obligations of the Company to reimburse the
Placement Agent’s legal fees for the Placement Agent’s
selling efforts for the Offering
3
through and
including the Closing. The parties hereto agree that there are no
outstanding reimbursable expenses or fees owing to the Placement
Agent in respect of prior offerings of securities by the
Company.
(e) Not
to, and to ensure that no “affiliate” (as defined in
Rule 501(b) of the Act) of the Company will, sell, offer for sale
or solicit offers to buy or otherwise negotiate in respect of any
“security” (as defined in the Act) that would be
integrated with the sale of the Shares and cause a violation of
federal securities laws.
(f) Not
to, and not to authorize or permit any person acting on its behalf
to, distribute any offering material in connection with the offer
and sale of the Shares other than the Registration Statement, any
issuer free writing prospectus permitted to be distributed and the
Prospectus and any amendments and supplements thereto or to the
Registration Statement and the Prospectus prepared in compliance
with this Agreement.
(g) The
Company will not take and will cause its controlled affiliates
(within the meaning of Rule 144 under the Act) not to take,
directly or indirectly, any action designed to or which has
constituted or which might reasonably be expected to cause or
result, under the Exchange Act or otherwise, in stabilization or
manipulation of the price of any security of the Company to
facilitate the sale or resale of the Shares in violation of
applicable law.
(h) To
pay all stamp, documentary and transfer taxes and other duties, if
any, which may be imposed by the United States or any political
subdivision thereof or taxing authority thereof or therein with
respect to the issuance of the Shares or the sale thereof to the
subscribers.
6. Mutual
Covenants . The Company agrees that, unless it obtains the
prior written consent of the Placement Agent, and the Placement
Agent agrees with the Company that, unless it has obtained or will
obtain, as the case may be, the prior written consent of the
Company, it has not made and will not make any offer relating to
the Shares that would constitute an issuer free writing prospectus
or that would otherwise constitute a free writing prospectus
required to be filed by the Company with the Commission or retained
by the Company under Rule 433 under the Act. Any such free
writing prospectus consented to by the Placement Agent or the
Company is hereinafter referred to as a “ Permitted Free
Writing Prospectus .” The Company agrees that (x) it
has treated and will treat, as the case may be, each Permitted Free
Writing Prospectus as an issuer free writing prospectus and
(y) it has complied and will comply, as the case may be, with
the requirements of Rules 164 and 433 under the Act applicable
to any Permitted Free Writing Prospectus, including in respect of
timely filing with the Commission, legending and record keeping. If
at any time after the date hereof any events shall have occurred as
a result of which any issuer free writing prospectus, as then
amended and supplemented, would conflict with the information in
the Registration Statement, 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 were made, not
misleading, or, if for any other reason it shall be necessary to
amend or supplement any issuer free writing prospectus, the Company
agrees to notify the Placement Agent and, upon the Placement
Agent’s request, to file such document and prepare and
furnish without charge to the Placement Agent as many copies as the
Placement Agent may from time to time reasonably
4
request of an
amended or supplemented issuer free writing prospectus that will
correct such conflict, statement or omission or effect such
compliance.
7.
Indemnification and Contribution .
(a) The
Company agrees to indemnify and hold harmless the Placement Agent,
and each person, if any, who controls the Placement Agent within
the meaning of Section 15 of the Act or Section 20 of the
Exchange Act, against any losses, claims, damages or liabilities of
any kind to which, jointly or severally, the Placement Agent or
such controlling person
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