Exhibit 1.1
PLACEMENT AGENCY
AGREEMENT
April 5, 2010
Roth Capital Partners,
LLC
24 Corporate Plaza
Newport Beach, CA 92660
Ladies and Gentlemen:
eDiets.com, Inc., a Delaware
corporation (the “ Company ”), proposes, subject
to the terms and conditions stated herein, to issue and sell,
through Roth Capital Partners, LLC (“ Roth ”),
up to an aggregate of 5,275,000 shares (the “ Shares
”) of the Company’s common stock, par value $0.001 per
share (the “ Common Stock ”) to certain
investors (each an “ Investor ” and,
collectively, the “ Investors ”). The Shares are
sometimes referred to herein as the “ Securities
.”
The Company and Roth hereby confirm
their agreement as follows:
1. Agreement to Act as
Placement Agent.
(a) On the basis of the
representations, warranties and agreements of the Company herein
contained, and subject to all the terms and conditions of this
Placement Agency Agreement (the “ Agreement ”),
Roth shall serve as the exclusive placement agent in connection
with the issuance and sale by the Company of the Securities from
the Registration Statement (as defined in Section 2 below),
with the terms of such offering (the “ Offering
”) to be subject to market conditions and negotiations
between the Company, Roth and the Investors. Roth shall act on a
best efforts basis and does not guarantee that it will be able to
sell the Securities in the prospective Offering. It shall be a
condition to the Offering that the Company enter into binding
agreements (i) to convert all outstanding amounts under the
Notes (as defined in Section 7(g)) into shares of Common Stock
at a price no better than the purchase price of the Securities
issued in the Offering (the “ Debt Conversion
”), which agreement shall be subject only to stockholder
approval, the consummation of the Offering and certain customary
conditions, and (ii) to sell to selected insiders, as agreed
to by such persons and the Company, shares of Common Stock in an
aggregate amount of no less than $500,000 on the same terms and
conditions as the Securities are issued in the Offering (the
“ PIPE ”), which agreement shall be subject only
to stockholder approval, the consummation of the Offering and
certain customary conditions. The Company shall use its best
efforts to cause such agreements to be executed and to take any and
all steps to cause such transactions to be presented to the
Company’s stockholders for their approval.
(b) As compensation for services
rendered, on the Closing Date (as defined below), the Company shall
pay to Roth an aggregate amount equal to 7.0% of the gross proceeds
received by the Company from the sale of the Securities. The
purchase price to the Investors for each Share is US$1.00 (the
“ Offering Price ”). Roth may retain other
brokers or dealers to act as sub-agents on its behalf in connection
with the Offering. The term of Roth’s exclusive engagement
will be sixty (60) days from the date hereof (the “
Exclusive Term ”). Roth will be entitled to collect
all fees earned through termination.
2. Registration Statement and
Final Prospectus. The
Company has prepared and filed with the Securities and Exchange
Commission (the “ Commission ”) a registration
statement on Form S-3 (File No. 333-165445) under the
Securities Act of 1933, as amended (the “ Securities
Act ”), and the rules and regulations of the Commission
thereunder (the “ Rules and Regulations ”), and
such amendments to such registration statement (including post
effective amendments) as may have been required to the date of this
Agreement. Such registration statement, as amended (including any
post effective amendments), has been declared effective by the
Commission. Such registration statement, as amended (including post
effective amendments thereto), the exhibits and any schedules
thereto and the documents and information otherwise deemed to be a
part thereof or included therein by the Securities Act or otherwise
pursuant to the Rules and Regulations, is herein called the “
Registration Statement .” If the Company has filed or
files an abbreviated registration statement pursuant to Rule 462(b)
under the Securities Act (the “ Rule 462 Registration
Statement ”), then any reference herein to the term
Registration Statement shall include such Rule 462 Registration
Statement. The Company will file with the Commission pursuant to
Rule 424 under the Securities Act a prospectus supplement relating
to the Securities to the form of prospectus included in the
Registration Statement. Such prospectus in the form in which it
appears in the Registration Statement is hereinafter called the
“ Base Prospectus ,” and the final prospectus
supplement as filed, along with the Base Prospectus, is hereinafter
called the “ Final Prospectus .”
For purposes of this Agreement, all
references to the Registration Statement, the Rule 462 Registration
Statement, the Base Prospectus, the Final Prospectus, or any
amendment or supplement to any of the foregoing shall be deemed to
include the copy filed with the Commission pursuant to its
Interactive Data Electronic Applications or predecessor system. All
references in this Agreement to amendments or supplements to the
Registration Statement, the Rule 462 Registration Statement, the
Base Prospectus, or the Final Prospectus shall be deemed to mean
and include the subsequent filing of any document under the
Securities Exchange Act of 1934, as amended (the “
Exchange Act ”), that is deemed to be incorporated
therein by reference therein or otherwise deemed by the Rules and
Regulations to be a part thereof.
3. Representations and
Warranties Regarding the Offering.
(a) The Company represents and
warrants to, and agrees with, Roth, as of the date hereof and as of
the Closing Date, except as otherwise indicated, as
follows:
(i) At each time of effectiveness,
at the date hereof and at the Closing Date, the Registration
Statement and any post-effective amendment thereto, complied or
will comply in all material respects with the requirements of the
Securities Act and the Rules and Regulations and did not and will
not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to
make the statements therein not misleading. The Time of Sale
Disclosure Package (as defined below) as of the date hereof and at
the Closing Date, and the Final Prospectus, as amended or
supplemented, at the time of filing pursuant to Rule 424(b) under
the Securities Act and at the Closing Date, did not and will not
contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make
the statements therein, in the light of the circumstances under
which they were made, not misleading. The representations and
warranties set forth in the two immediately preceding sentences
shall not apply to statements in or omissions from the Registration
Statement or any post-effective amendment thereto or the Final
Prospectus made in reliance upon, and in conformity with, written
information furnished to the Company by Roth specifically for use
in the preparation thereof. The Registration Statement contains all
exhibits and schedules required to be filed by the Securities Act
or the Rules and Regulations. No order preventing or suspending the
effectiveness or use of the Registration Statement or the Final
Prospectus is in effect and no proceedings for such purpose have
been instituted or are pending, or, to the Knowledge of the
Company, are threatened in writing by the Commission. The term
“ Knowledge ” as used in this Agreement shall
mean actual knowledge of the Company’s officers after due and
reasonable inquiry.
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(ii) The documents incorporated by
reference in the Registration Statement, the Time of Sale
Disclosure Package and the Final Prospectus, when they became
effective or were filed with the Commission, as the case may be,
conformed in all material respects to the requirements of the
Securities Act or the Exchange Act, as applicable, were filed on a
timely basis with the Commission and none of such documents, when
they were filed (or, if amendments to such documents were filed,
when such amendments were filed), contained an untrue statement of
a material fact or omitted to state a material fact necessary to
make the statements therein, in the light of the circumstances
under which they were made, not misleading. Any further documents
so filed and incorporated by reference in the Registration
Statement, the Time of Sale Disclosure Package or the Final
Prospectus, when such documents are filed with the Commission, will
conform in all material respects to the requirements of the
Exchange Act, and will not contain an untrue statement of a
material fact or omit to state a material fact necessary to make
the statements therein, in the light of the circumstances under
which they were made, not misleading. As used in this paragraph and
elsewhere in this Agreement, “ Time of Sale Disclosure
Package ” means the Base Prospectus, the Final Prospectus
most recently filed with the Commission before the time of this
Agreement, any subscription agreement between the Company and the
Investors, and any issuer free writing prospectus as defined in
Rule 433 of the Act (each, an “ Issuer Free Writing
Prospectus ”), if any, that the parties hereto shall
hereafter expressly agree in writing to treat as part of the Time
of Sale Disclosure Package.
(iii) The financial statements of
the Company, together with the related notes, included or
incorporated by reference in the Registration Statement, the Time
of Sale Disclosure Package and the Final Prospectus comply in all
material respects with the requirements of the Securities Act and
the Exchange Act and fairly present in all material respects the
financial condition of the Company 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 consistently applied throughout the periods involved;
and the supporting schedules included in the Registration Statement
present fairly in all material respects the information required to
be stated therein. No other financial statements or schedules are
required to be included in the Registration Statement, the Time of
Sale Disclosure Package or the Final Prospectus. To the
Company’s Knowledge, Ernst & Young LLP is an
independent public accounting firm with respect to the Company
within the meaning of the Securities Act and the Rules and
Regulations.
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(iv) The Company had a reasonable
basis for, and made in good faith, each “forward-looking
statement” (within the meaning of Section 27A of the
Securities Act or Section 21E of the Exchange Act) contained
or incorporated by reference in the Registration Statement, the
Time of Sale Disclosure Package or the Final Prospectus.
(v) All statistical or
market-related data included or incorporated by reference in the
Registration Statement, the Time of Sale Disclosure Package or the
Final Prospectus are based on or derived from sources that the
Company reasonably believes to be reliable and accurate, and the
Company has obtained the written consent to the use of such data
from such sources, to the extent required.
(vi) There is no action pending to
delist the Common Stock from The NASDAQ Capital Market (“
NASDAQ ”), nor has the Company received any
notification that NASDAQ is currently contemplating terminating
such listing. When issued, the Shares will be listed on
NASDAQ.
(vii) The Securities have been or
will be qualified for sale under the securities laws of such
jurisdictions (United States and foreign) as Roth determines, or
are or will be exempt from the qualification and broker-dealer
requirements of such jurisdictions, provided that the Company shall
not be required to (A) qualify as a foreign corporation or
other entity or as a dealer in securities in any such jurisdiction
where it would not otherwise be required to so qualify,
(B) file any general consent to service of process in any such
jurisdiction, or (C) subject itself to taxation in any such
jurisdiction if it is not otherwise so subject.
(viii) The Company has not taken,
directly or indirectly, any action that is designed to or that has
constituted or that would 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
Securities.
(ix) The Company is not an “
ineligible issuer ,” as defined in Rule 405 of the
Securities Act. Subject to Section 6(d) below, the Company
represents and warrants that it has not prepared or had prepared on
its behalf or used or referred to any Issuer Free Writing
Prospectus in connection with the Offering. Subject to
Section 6(d) below, the Company has not distributed and the
Company will not distribute, prior to the completion of the
distribution of the Securities, any offering material in connection
with the Offering other than subscription agreements between the
Company and the Investors and the Base Prospectus, the Final
Prospectus, the Registration Statement, and copies of the
documents, if any, incorporated by reference therein.
(x) The Company is not and, after
giving effect to the offering and sale of the Securities, will not
be required to register as an “investment company,” as
such term is defined in the Investment Company Act of 1940, as
amended.
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(b) Any certificate signed by any
officer of the Company and delivered to Roth or to Roth’s
counsel in connection with this offering shall be deemed a
representation and warranty by the Company to Roth as to the
matters covered thereby.
4. Representations and
Warranties Regarding the Company.
(a) The Company represents and
warrants to and agrees with Roth, except as set forth in the
Registration Statement, the Time of Sale Disclosure Package and the
Final Prospectus, as follows:
(i) The Company and each of its
subsidiaries has been duly organized and is validly existing as a
corporation in good standing under the laws of its jurisdiction of
incorporation. The Company and each of its subsidiaries has the
corporate power and authority to own its properties and conduct its
business as currently being carried on and as described in the
Registration Statement, the Time of Sale Disclosure Package and the
Final 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 would have or is reasonably likely to result in a material
adverse effect upon the business, properties, operations, condition
(financial or otherwise) or results of operations of the Company
and its subsidiaries, taken as a whole, or in its ability to
perform its obligations under this Agreement (“ Material
Adverse Effect ”).
(ii) The Company has the corporate
power and authority to enter into this Agreement. 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.
(iii) The execution, delivery and
performance of this Agreement and the consummation of the
transactions herein contemplated will not (A) result in a
breach or violation of any of the terms and provisions of, or
constitute a default under, any law, rule or regulation to which
the Company or any subsidiary is subject, or by which any property
or asset of the Company or any subsidiary is bound or affected,
(B) conflict with, result in any violation or breach of, or
constitute a default (or an event that with notice or lapse of time
or both would become a default) under, or give to others any right
of termination, amendment, acceleration or cancellation (with or
without notice, lapse of time or both) of, any agreement, lease,
credit facility, debt, note, bond, mortgage, indenture or other
instrument (the “ Contracts ”) or obligation or
other understanding to which the Company or any subsidiary is a
party of by which any property or asset of the Company or any
subsidiary is bound or affected, or (C) result in a breach or
violation of any of the terms and provisions of, or constitute a
default under, the Company’s charter or bylaws, except in the
case of clauses (A) and (B) such breaches, violations,
defaults, or conflicts which are not, individually or in the
aggregate, reasonably likely to result in a Material Adverse
Effect.
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(iv) All consents, approvals,
orders, authorizatio