The opinion
Oppenheimer & Co. Inc. v Vivani Med. Inc.
2025 NY Slip Op 32119(U)
June 12, 2025
Supreme Court, New York County
Docket Number: Index No. 650421/2024
Judge: Margaret A. Chan
Cases posted with a "30000" identifier, i.e., 2013 NY Slip
Op 30001(U), are republished from various New York
State and local government sources, including the New
York State Unified Court System's eCourts Service.
This opinion is uncorrected and not selected for official
publication.
INDEX NO. 650421/2024
NYSCEF DOC. NO. 49 RECEIVED NYSCEF: 06/12/2025
SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NEW YORK: COMMERCIAL DIVISION PART 49M
- - - - - --------X
OPPENHEIMER & CO. INC., INDEX NO. 650421 /2024
Plaintiff, 04/03/2024,
MOTION DATE 05/03/2024
- V-
MS 001
VIVANI MEDICAL INC. F/K/A SECOND SIGHT MEDICAL
MOTION SEQ. NO. MS 002
PRODUCTS INC., and THINKEQUITY LLC,
Defendants. DECISION+ ORDER ON
MOTION
- - - - -------------------------.X
HON. MARGARET A. CHAN:
The following e-filed documents, listed by NYSCEF document number (Motion 001) 8, 9, 10, 11, 12, 13,
14, 15, 16, 17, 18, 19,20, 23, 37, 39
were read on this motion to/for DISMISS
The following e-filed documents, listed by NYSCEF document number (Motion 002) 24, 25, 26, 27, 28,
29,30, 31, 32, 33, 34, 35, 36, 38,41
were read on this motion to/for DISMISSAL
This action arises from a contract by which plaintiff Oppenheimer & Co. Inc.
(Oppenheimer) would locate an investor to fund a proposed merger between
defendant Vivani Medical Inc. f/k/a Second Sight Medical Products Inc (Vivani) and
non·party Pixium Vision SA (Pixium). The merger fell through allegedly because
defendant ThinkEquity LLC (ThinkEquity) found a better deal for Vivani. Plaintiff
commenced this suit against Vivani for Count 1 - breach of contract, Count 2 -
breach of the implied covenant of good faith and fair dealing, and Count 4 - breach
of contract as a third-party beneficiary. Plaintiff asserts a claim against
ThinkEquity for Count 3 - tortious interference with contract. Both defendants
separately move to dismiss.the claims as against them. For the reasons below,
Vivani's motion (MS 001) is partially granted only as to Counts 2 and 4. And
ThinkEquity's motion (MS 002) is granted on Count 3, the sole claim against it.
Background1
Plaintiff is a New York-based investment bank and financial services
company offering investment banking, financial advisory services, capital market
1
The following facts are drawn from the Complaint, its exhibits, and the documents in support of
this motion. Facts from the complaint and are assumed true for purposes of this motion.
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services, asset management, wealth management, and related products and
services (NYSCEF # 1, Complaint ,r 3). Defendant Vivani (referred to as Second
Sight or the Company in the submissions) is a California-based biopharmaceutical
company that develops medical devices and implants (id. ,i 4). Defendant
ThinkEquity is a New York-based boutique investment bank and describes itself as
"a broker-dealer registered with the SEC and FINRA" and "a full service brokerage
firm involved in retail stock brokerage sales and investment banking" (NYSCEF #
36, ThinkEquity mol at 1). And non-party Pixium is a company that was set to
merge with defendant Vivani (Complaint ,r 2).
Pre-PlaintiffHistory
ThinkEquity provides documentary evidence that allegedly shows its true
history with defendant Vivani, which preceded plaintiffs involvement and which is
not reflected in the Complaint. ThinkEquity claims that in April 2020, "more than
[seven] months prior to" the existence of plaintiffs and Vivani's agreement,
ThinkEquity and Vivani had entered into an "exclusive investment banking
agreement" pursuant to which ThinkEquity became "the sole bookrunner for a firm
commitment underwriting of a proposed registered public offering of [Vivani]
common stock" (IB Agreement) (ThinkEquity mol at 2, citing NYSCEF # 26,
ThinkEquity IB Agreement). ThinkEquity claims that it also entered into an
Underwriting Agreement later that month (id at 3-4, citing NYSCEF # 27,
underwriting agreement).
ThinkEquity claims that both the IB agreement and the Underwriting
Agreement contain provisions giving ThinkEquity a "Right of First Refusal" on "any
new financing transaction for a period of [twelve] months from the closing on any
offering ... and the sole right to determine whether ... other broker dealer shall
have the right to participate in such offering .. !' (id at 3 citing NYSCEF # 26 ,r 16).
As relevant here, the IB Agreement's Right of First Refusal states:
The Underwriting Agreement's Right of First Refusal states:
"7.3 Right of First Refusal. [ThinkEquity] shall have an irrevocable
right of first refusal (the "Right of First Refusaf'), for a period of twelve
(12) months after the date the Offering is completed, to act as sole and
exclusive investment banker, sole and exclusive bookrunner, sole and
exclusive financial advisor, sole and exclusive underwriter and/or sole
and exclusive placement agent, at the Representative's sole and
exclusive discretion, for each and every future public and private
equity and debt offering, including all equity linked financings (each, a ·
"Subject Transaction"), during such twelve (12) month period, of the
Company, or any successor to or subsidiary of the Company, on terms
and conditions customary to the Representative for such Subject
Transactions. For the avoidance of any doubt, the Company shall not
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retain, engage or solicit any additional investment banker, book·
runner, financial advisor, underwriter and/or placement agent in a
Subject Transaction without the express written consent of the
Representative."
(id at 3-4, citing Underwriting Agreement§ 7.3).
ThinkEquity claims that in November 2020, Vivani and non-party Pixium
started discussing a potential merger between. them (the Proposed Merger) (id at 4·
5). As explained in the Complaint, "[t]he anticipated transaction involved Pixium
contributing to [Vivani] all of Pixium's assets and liabilities in connection with
certain technologies related to the treatment of blindness, with Pixium to thereafter
become the controlling shareholder of the combined company" (Complaint ,r 22).
ThinkEquity claims that around this time, Vivani "requested ThinkEquity to
sign a Limited Waiver Agreement of ThinkEquity's Right of First Refusal for the
merger financing" (Limited Waiver) (MS 2 - NYSCEF # 36, ThinkEquity mol at 5).
The Limited Waiver, dated November 1, 2020, would allow plaintiff Oppenheimer to
"act as investment banker" and locate an investor to fund the potential merger (id;
see also NYSCEF # 31, Limited Waiver).
Under the Limited Waiver, ThinkEquity waives "any and all Consents Rights
and Right of First Refusal that ThinkEquity may have solely in connection with the
Combination Activities and any transactions contemplated thereby," apart from
rights regarding an irrelevant spin-off (Limited Waiver§ I). "Combination
Activities" is defined as four categories of tasks:
"(i) rais[ing] additional working capital in a private placement of
equity securities of the Company [Vivani] to accredited investors (the
'Fund Raising'); (ii) issu[ing] equity securities of the Company to
Pixium as consideration for its contribution of certain assets (the
'Contribution'); (iii) issu[ing] equity securities of the Company to
shareholders of Pixium in connection with an exchange offer (the
'Offer'); and (iv) transfer[ring] certain of its assets to a subsidiary (the
'Spin Co') and dividend shares of Spin Co to shareholders of the
Company (the 'Spin ·Off)."
(id at Second Whereas Clause).
The Agreement between Plaintiffand Vivani and Pixium
The Complaint picks up where ThinkEquity leaves off. On November 5, 2020,
Vivani and Pixium entered into a placement agency agreement with plaintiff by
which plaintiff would locate an investor to fund the Proposed Merger (the
Agreement) (Complaint ,r,r 1, 25-28). Per the Agreement, Vivani and Pixium agreed
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to retain and compensate plaintiff as their "sole· lead placement agent" relating to
"the Placement" for the purposes of the "Business Combination" (id ,r 29; NYSCEF
# 2, Agreement at 1).
The Agreement contains several relevant defined terms. First, the Agreement
defines the "Business Combination" to be the Proposed Merger-"the contemplated
. business combination Dbetween [Vivani] and Pixium" (Agreement at 1). Second, the
Agreement defines "the Placement" as the "proposed private placement Dof
[Vivani's] securitie$ ... to a limited number of accredited investors ... in connection
with" the Proposed Merger-in other words, the method in which the Proposed
Merger would be funded (id) Third, the Agreement defines "Company Parties" as
Vivani and Pixium "collectively" (id). Fourth, the "Term" of the Agreement is
defined as beginning "the date of this Agreement" (November 5, 2020) and ending
the earlier of either "the consummation of the Placement" or "the termination of
this Agreement" (id § 10).
Under§ 1 of the Agreement, "[plaintiff]'s involvement in the Placement is
strictly on a reasonable best efforts basis; the consummation of the Placement will
be subject to, among other things, market conditions" (id § 1; Complaint ,r 6).
As for plaintiffs fee,§ 2 of the Agreement provided that Vivani "shall pay
[plaintiff]" a fee of 6.5% of the gross proceeds raised in the Placement, "subject to a
minimum Fee of $1.75 million" (Complaint ,r 31; Agreement§ 2). Vivani was to pay
"upon the consummation" of the Placement, provided that the Placement was "in
connection with the Business Combination" and was consummated either during
the Term or within six months thereafter (the Tail Period) (Agreement§ 2).
As most relevant here, the end of§ 10 of the Agreement states:
"During the Term, the Company Parties agree that they will not
negotiate with any other underwriter, placement agent, arranger or
investor relating to a possible public or private offering or placement of
the Company Parties' securities (including the Placement) or other
financing without first consulting and receiving the approval of
[plaintiff], other than the Excluded Financings."
(id§ 10 [emphasis added]). As will become clear below, the parties raise disputes
about nearly all of the emphasized language in italics.
Finally, the Agreement contains several references to ThinkEquity. For
example, the Agreement states in the first paragraph that plaintiff "understands
that the Company Parties may separately engage ThinkEquity ... as a co-manager
for the Placement to serve an entirely passive role" (id). The first paragraph further
states that plaintiff and ThinkEquity's responsibilities "are several and not joint,"
and that "the Company Parties will not engage any placement agents other than
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[plaintiff] and Think Equity in connection with the Placement" (id). Additionally,
the Company Parties also promised "that their services contemplated hereby do not
violate any obligations owed by the Company Parties to any third party (including,
without limitation, Think Equity)" (id.). Lastly, plaintiff "agree[d] that $300,000 of
the Fee shall be paid to [ThinkEquity as] Think ~quity's sole compensation in
connection with the Placement in connection with the Business Combination" (id §
2; Complaint ,r 40).
Memorandum of Understanding and Plaintiff's Performance2
Approximately two months after execution of the Agreement, Vivani and
Pixium formalized the terms of their anticipated business combination with a
Memorandum of Understanding dated January 5, 2021 (the MOU) (Complaint ,r
45). Pursuant to the MOU, Vivani agreed to raise a minimum of $25 million "in a
private placement of [Vivani's] equity securities ... in order to 'finance the
· Combined Company's working capital and general corporate purposes"' (id ,r 46,
quoting MOU at§ 2.1). The MOU also "prohibited either [Vivani] or Pixium from
engaging in any sale of their respective securities in a manner unrelated to their
fundraising activities in furtherance of the business combination" (id ,r 48, citing
MOU at§ 4.1). The next day, Vivani and Pixium each issued press releases publicly
announcing their anticipated business combination (id ,r,r 50-51).
Plaintiff ultimately held up its end of the Agreement by arranging a private
sale ofVivani's stock by non-party investor Hudson Bay. On March 7, 2021, Vivani,
Pixium, and Hudson Bay executed a (mostly) non-binding term sheet memorializing
the contemplated sale (Term Sheet) (id ,r 53; NYSCEF # 3, Term Sheet at 1
[revealing name of investor as Hudson Bay]). Pursuant to the Term Sheet, Hudson
Bay agreed to purchase $25 million ofVivani's stocks, the amount Vivani was
required to raise under the MOU (Complaint ,r 54; Term Sheet at 1).
Despite being mostly non-binding, the Term Sheet did contain a few "Binding
Terms" (Term Sheet at 4 [Binding Terms section]). Most relevantly, the Term Sheet
set out a binding 90-day "Exclusivity Period" during which Vivani was expressly
prohibited from participating in any competing sale of its stock other than with
Hudson Bay (id; Complaint ,r 56). IfVivani "nonetheless consummates or executes
any term sheet or agreement" with a third party during the Exclusivity Period, the
Term Sheet allowed Hudson Bay to recover $2,500,000 (Term Sheet at 4 [Binding
Terms section]). The relevant language states:
"From the date of the execution of this term sheet by the Company
[Vivani] to the date that is 90 days after the date of this term· sheet
(such period, the 'Exclusivity Period'), the Company and/or its agents
shall not directly or indirectly solicit, initiate, consider or encourage
2 The Memorandum of Understanding is not included in plaintiffs submission.
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any proposal or offer from any other party relating to any financial
transaction having an effect or result similar to the transaction
contemplated herein and the Investors shall have the exclusive right to
negotiate and execute definitive documentation embodying the terms
set forth herein and other mutually acceptable terms ... if during the
Exclusivity Period the Company nonetheless consummates, or executes
.any term sheet or agreement with respect to, a financing with another
third party, Hudson Bay shall ... receive $2,500,000 from the
Company."
(id).
Vivani Announces a Different Deal With Investors Located by ThinkEquity
Vivani claims that the Complaint omits "key events that occurred in March
2021., leading to the collapse of the potential Business Combination" (NYSCEF # 9,
Vivani mol at 6). Specifically, Vivani claims that its stock went up and that
ThinkEquity then gave Vivani "an unsolicited higher value offer for its shares ...
from a group of investors located by ThinkEquity" (id at 5·7). Vivani claims that
"[g]iven the volatile market, Vivani had to act quickly" (id at 7).
Thus, on March 23, 2021, Vivani and Hudson Bay terminated the Term Sheet
pursuant to a termination agreement and limited waiver (the Termination
Agreement) (id at s; Complaint, Termination Agreement at l).Vivani claims that
under the Termination Agreement, Hudson Bay "waive[d] any and all rights it may
have under the terms of the Term Sheet with respect to the Proposed Financing"
and "agree[d] to terminate the Term Sheet" for payment of $80,000 by Vivani
(Vivani mol at 8; Complaint§ 1).
In the meantime, Vivani and Thin~Equity entered into a separate placement
agency agreement (Complaint ,r 59). Vivani claims it also entered "Subscription
Agreements" with the investors located by ThinkEquity (Vivani mol at 7).
The next day, on March 24, 2021, Vivani publicly announced its intended sale
of 4,650,000 shares of its stock to ThinkEquity's group of investors via a private
placement for "the total sale price of $27,900,000" (the Competing Placement)
(Complaint ,r 58). Vivani did not previously notify, consult, or receive approval from
plaintiff despite the language in § 10 of the Agreement (id ,r,r 58, 59). On March 26,
2021, Vivani issued a press release announcing that the Competing Placement sale
had closed (id ,r 62).
ThinkEquity acted as Vivani's sole placement agent for the Competing
Placement, with no involvement from plaintiff, Pixium, or Hudson Bay. The
Complaint alleges that the Competing Placement did not constitute one of the
Excluded Financings defined in the Agreement (id ,r,r 59, 65). ThinkEquity
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purportedly received $1,813,500 in fees as a result of the Competing Placement
pursuant to a separate placement agency agreement between Vivani and
· ThinkEquity on March 23, 2021 (id ,r 64).
On April 2, 2021, Vivani purported to withdraw from the MOU with Pixium
(id. ,r 75). Pixium would go on to sue Vivani in "Paris Commercial Court," ultimately
winning damages of 2.5 million euros (id ,r,r 78-80).
After learning of the Competing Placement via Vivani's press releases and
public announcements, plaintiff sent Vivani an invoice dated April 1, 2021 (the
Invoice) totaling $1,860,683.41 (id ,r,r 69-73; NYSCEF # 3, Pltfs Invoice). The
Invoice's total represented the Agreement's 6.5% placement fee on the $27,900,000
Competing Placement sale price plus ($1,813,500), plus $43,!;64 in outside legal
expenses and another $3,219.41 in out-of-pocket expenses plaintiff incurred in
carrying otit its obligations under the Agreement (Complaint ,r 69).
Vivani refused to pay plaintiff in connection with the Invoice or Agreement.
Instead, on April 6, 2021, Vivani responded to the Invoice by sending a notice to
plaintiff and Pixium purporting to terminate the Agreement effective April 9, 2021
(the Termination Notice) (id ,r 73; NYSCEF # 4, Apr. 9, 2021 Termination Notice).
Plaintiff filed this lawsuit on January 26, 2024, against Vivani and
ThinkEquity. As against Vivani, plaintiff alleges that Vivani breached§ 10 of the
Agreement for failing to consult or receive approval from plaintiff before engaging
in the Competing Placement (id ,r,r 86-96 [Count 1]); the implied covenant of good
faith and fair dealing for working with another placement agent (id ,r,r 97-104
[Count 2); and the Hudson Bay Term Sheet's Binding Terms for negotiating with
ThinkEquity's investors during the 90-day Exclusivity Period on the theory that
plaintiff is a third-party beneficiary of the Term Sheet (id. ,r,r 114-129 [Count 4D. As
against ThinkEquity, plaintiff asserts a claim for tortious interference with the
Agreement for working to arrange the Competing Placement (id. ,r,r 105-113 [Count
3]). For all claims, plaintiff seeks the 6.5% fee on the Competing Placement as
damages (id ,r,r 96, 104, 113, 129).
Vivani first argues that the breach of Agreement claim should be dismissed
because plaintiff failed to allege a breach or damages (Vivani mol at .9·16). Vivani
claims § 10 does not give plaintiff any right of first refusal or "option" to serve as
placement agent for all future placements and is in 'any event an indefinite
provision that cannot be enforced (id at 9·14). Vivani asserts that honoring the
Agreement "would have imposed an impossible choice on Vivani's Board between
breaching its fiduciary duties to its shareholders versus complying with the
Agreement" (id. at 14-15). Vivani also argues that plaintiff cannot recover
"reasonable fees and expenses" (id at 16). As for the breach of the covenant of good
faith and fair dealing claim, Vivani primarily argues that this claim is duplicative of
breach of contract (id at 17 · 18). Finally, Vivani argues that the breach of the Term
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Sheet should be dismissed because plaintiff is not an intended third-party
beneficiary of the Term Sheet (id at 18-19).
As for ThinkEquity, it succinctly argues that the tortious interference with
contract claim against it must be dismissed because the complaint fails to allege all
essential elements in that ThinkEquity had a superior right of refusal and pre·
existing relationship with Vivani (MS2- NYSCEF # 36, ThinkEquity mol at 7·10).
Legal Standard
Defendant Vivani seeks to dismiss Counts 1 and 2 pursuant to CPLR
3211(a)(l) and CPLR 3211(a)(7); Count 4 pursuant to CPLR 3211(a)(l), CPLR
3211(a)(3) for lack of standing, CPLR 3211(a)(5) for release or waiver to sue, and
CPLR 32ll(a)(7). Defendant ThinkEquity seeks dismissal of Count 3 pursuant to
CPLR 32ll(a)(l) and CPLR 3211(a)(7).
On a motion to dismiss pursuant to CPLR 3211 (a)(7), the court must "accept
the facts as alleged in the complaint as true, accord plaintiffs the benefit of every
possible favorable inference," and assess whether "plaintiff has stated a claim
cognizable at law" or, if the claim is cognizable, wh«::lther "plaintiff has failed to
assert a material allegation necessary to support the cause of action" (Siegmund
Strauss, Inc. v E. 149th Realty Corp., 104 AD3d 401, 403 [1st Dept 2013]; see Basis
Yield Alpha Fund (Master) v Goldman Sachs Group, Inc., 115 AD3d 128, 135 [1st
Dept 2014D. Significantly, "whether a plaintiff ... can ultimately establish its ·
allegations is not taken into consideration in determining a motion to dismiss"
under CPLR 3211 (a)(7) (Phillips S. Beach LLC v ZC Specialty Ins. Co., 55 AD3d
493,497 [1st Dept 2008], lvdeniedl2 NY3d 713 [2009]; seeEBCI, Inc. vGoldman,
Sachs & Co., 5 NY3d 11, 19 [2005]). When documentary evidence is submitted in
support of a motion to dismiss, "the standard morphs from whether the plaintiff
stated a cause of action to whether it has one" (Basis Yield Alpha Fund, 115 AD3d
at 135).
A motion to dismiss pursuant to CPLR 3211(a)(l) will be granted "only where
the documentary evidence utterly refutes plaintiff's factual allegations, conclusively
establishing a defense as a matter of law" (Goshen v Mutual Life Ins. Co. ofN. Y., 98
NY2d 314, 326 [2002]; Amsterdam Hospitality Group, LLC v Marshall-Alan Assoc.,
Inc., 120 AD3d 431, 433 [1st Dept 2014]). Facts and legal conclusions that are
"flatly contradicted by documentary evidence □ are not presumed to be true or
accorded every favorable inference" (Morgenthow & Latham v Bank ofNew York
Co., Inc., 305 AD2d 74, 78 [1st Dept 2003] [internal citation and quotation
omitted]). Moreover, "affidavits, which do no more than assert the inaccuracy of
plaintiffs' allegations, may not be considered, in the context of a motion to dismiss,
for the purpose of determining whether there is evidentiary support for the
complaint ... and do not otherwise conclusively establish a defense to the asserted
claims as a matter of law" ( Tsimerman v Janoff, 40 AD3d 242, 242 [1st Dept 2007]).
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Vivani raises CPLR 321l(a)(7) and (a)(5) to argue that plaintiff has no
standing to bring a claim as an intended third ·party beneficiary in the fourth cause
of action.
The three claims against Vivani (MS 001) will be addressed first followed by
the one claim against ThinkEquity (MS 002).
DISCUSSION
Count 1 · Breach of the Agreement by Vivani
Under New York law, to plead a cause of action for breach of contract, a
plaintiff must allege: (1) a contract exists, (2) plaintiff performed under the contract,
(3) defendant breached its contractual obligations, and (4) defendant's breach
resulted in damages (34·06·73, LLC v Seneca Ins. Co., 39 NY3d 44, 52 [2022]).
There is no real dispute that the Agreement is a valid contract or that plaintiff
performed by arranging for investor Hudson Bay to enter the Term Sheet. The only
real questions are whether Vivani breached§ 10 of the Agreement and whether
plaintiff adequately alleged damages resulting from this breach.
. I
Section 10 of the Agreement states that "the Company Parties agree that
they will not negotiate with any other ... placement agent ... relating to a possible
public or private offering or placement of the Company Parties' securities (including
the Placement) or other financing without first consulting and receiving the
approval of [plaintiff]" (Agreement§ 10). Plaintiff reads this language to mean
Vivani must receive plaintiffs approval before negotiating any sale of its securities,
regardless whether it relates to the Proposed Merger with Pixium.
In contrast, Vivani reads the language to be limited solelyto the Proposed
Merger given that it specifies "the Company Parties" collectively and given the
contract's larger purpose of effectuating the Proposed Merger. Vivani responds that
the phrases "Company Parties" and "they" in§ 10 means that it applies onlyto
alternative placements ofVivani andPixium's securities together, not Vivani's
individually (Vivani mol at 11·12).
In any event, it is true that the term "Company Parties" refers to both Vivani
and Pixium collectively. But Vivani's reading of§ 10 as limited to situations
involving both Vivani and Pixium together and not individually is unclear. The
phrase - "the Company Parties agree" - does not imply that they agree only to the
extent that they are acting together -it means each individual company agrees. In
that vein, relevantly, the MOU, which was signed after the Agreement, includes a
clause that "prohibited either [Vivani] or Pixium from engaging in any sale of their
respective securities in a manner unrelated to their fundraising activities in
furtherance of the business combination" (MOU at§ 4.1).
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Vivani next argues that§ 10 is an unenforceable "agreement to agree"
because it contains "no terms at all" as to plaintiffs right to approve other sales - no
parameters for approval, no discussion of timing, and no consequences for violating
this term (Vivani mol at 12·13). Vivani's argument presents questions about the ·
scope of plaintiffs power and rights. However, "[b]efore rejecting an agreement as
indefinite, a court must be satisfied that the agreement cannot be rendered
reasonably certain by reference to an extrinsic standard that makes its meaning
clear" (Cobble Hill Nursing Home, Inc. v Henry and Warren Corp;, 74 NY2d 475,
483 [1989]). "The conclusion that a party's promise should be ignored as
meaningless 'is at best a last resort"' (id, quoting Cohen & Sons v Lurie Woolen Co.,
232 NY 112; 114 [1921]). As long as an agreement contains "all the essential terms
of the contract," it will be found to be enforceable even if there are aspects left to
future agreement (see Conopco, Inc. v Wathne Ltd, 190 AD2d 587, 588 [1st Dept
1993]).
Neither party offers much legal support on whether the "approval" language
in § 10 constitutes an agreement to agree. Vivani cites to Sonenshine Partners, LLC
v Duravant LLC, but that case is distin,guishable because it involved an agreement
that "merely provide [d plaintiff] with the opportunity to act as a financial advisor
based on terms to be negotiated later" and failed to "delineate the scope of [the] role,
the types of investment bank services ... or the fees associated with any
transaction" (191 AD3d 567, 568 [1st Dept 2021]). Plaintiff cites to Melbourne
Leasing Co. v Jack LaLanne Fitness Centers, Inc., but that case merely states
without analysis that "the provision of the lease requiring the landlord's approval of
the tenant's plans for the alterations did not render Article 64 an unenforceable
'agreement to agree"' (211 AD2d 765 [2d Dept 1995] [emphasis added]).
The approval language in§ 10 does not turn the provision into an
unenforceable agreement to agree. The Agreement as a whole contains most of the
relevant terms: the purpose of the contract; the services that plaintiff will provide;
the amount plaintiff will be paid upon a successful merger; and Vivani and Pixium's
respective duties. The thrust ofVivani and Pixium's duties appear to be payment
and exclusivity: they will not negotiate with other placement agents or make other
deals without seeking plaintiffs approval. The details of the approval are not
essential; what is clear is that plaintiff will be consulted first.
Additionally, Vivani's argument is weakened by the fact that they made no
effort to talk to plaintiff first. Within the span of a few weeks, Vivani cancelled the
Term Sheet and the Proposed Merger with Pixium and announced that it was
merging with Hudson Bay which ThinkEquity found, all without ever once
consulting plaintiff (or even Pixium). This is a breach even if there are ambiguities
about how plaintiff may give its approval. Plaintiff, therefore, adequately alleges
Vivani breached§ 10 of the Agreement by failing to consult.or get approval from
plaintiff to merge with the investors located by ThinkEquity.
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Vivan:i's last argument is that honoring the Agreement would have put
Vivani's board into an "impossible choice" between their fiduciary duties to
shareholders and their contractual duties to plaintiff (Vivani mol at 14·15). If there
is any persuasive logic to this argument, Vivani does not make it here. Vivani offers
no reason that adhering to the agreement is at odds with one's fiduciary dutyto
shareholders. Notably, by not complying with the Agreement, Vivani finds itself
embroiled in two suits - the instant case and the case brought by Pixium in which
Pixium prevailed. .
As for damages, Vivani disputes that the breach resulted in actual damages. ·
Vivani first argues that the damages are speculative because there is no solid link
between the alleged breach-"Vivani's failure to notify [plaintiff]"-and the
damages caused by Vivani's choice to withdraw from the Proposed Merger. Vivani
argues that there is nothing to indicate that had Vivani actually notified plaintiff,
the Proposed Merger would have gone forward. Vivani further argues plaintiff was
retained for the limited purpose of effectuating the Placement and the non-binding
Term.Sheet, both of which were always subject to Vivani's final approval or
rejection. Vivani claims that it is a stretch for Oppenheimer to allege damages and
recovery for the 6.5% fee on the Term Sheet Placement or the Competing
Placement.
Vivani's argument has some merit in that the damages here are caused by
Vivani forgoing the Proposed Merger entirely, not by Vivani failing to tell plaintiff .
about ThinkEquity's Competing Placement. Ultimately, given that the standard on
a motion to dismiss is to make all inferences in favor of the plaintiff, the issue of
damages, is insufficient to defeat the motion.
Plaintiffs First Cause of Action for breach of the Agreement survives.
Count 2: Breach of Implied Covenant of Good Faith and Fair Dealing by Vivani
Under New York law, every contract contains animplied covenant of good
faith and fair dealing which prevents one party from acting in a way that deprives
the other of the benefits of the contract (see 511 West 232nd Owners Corp. v
Jennifer Realty Co., 98 NY2d 144, 153 [2002] ["In New York, all contracts imply a
covenant of good (aith and fair dealing in the course of performance"]). However, a
claim based on the implied covenant must be dismissed if it duplicates a breach of
contract claim, ie., if it "arises from the same facts and seeks the same damages" as .
a contract claim (Mill Financial, LLC v Gillett, 122 AD3d 98, 104 [1st Dept 2014],
citing Amcan Holdings, Inc. v Canadian Imperial Bank of Com., 70 AD3d 423, 426
[2010]).
Here, the breach of covenant claim is duplicative of the breach of Agreement
claim. Plaintiff alleges that Vivani destroyed and prejudiced plaintiffs right to
receive the fruits of the Agreement by arranging and carrying out the Competing
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Placement with ThinkEquity (Complaint ,r,r 98·103). As Vivani points out, working
with ThinkEquity is the same conduct alleged to have breached § 10 of the
Agreement. Further, plaintiff seeks to recover the same damages in both claims.
(Vivani mol at 17).
Plaintiff does not dispute that both claims are based on breach of§ 10 but
counters that the implied covenant claim includes something "more." Specifically,
plaintiff claims the implied covenant claim is also based on Vivani's "active sabotage
of the [Proposed Merger] and Placement contemplated in the Agreement, the MOU,
the Term Sheet, and its effectuation of the Competing Placement" (pltfs mol at 21).
But these additional facts do not change the heart of the claim: Vivani breached the
Agreement by working with ThinkEquity.
Plaintiffs Second Cause of Action for breach of the implied covenant of good
faith and fair dealing must therefore be dismissed as duplicative of the breach of
the Agreement claim.
Count 4 · Breach of the Term Sheet as a Third· Party Beneficiary by Vivani
Plaintiff alleges that Vivani breached the Term Sheet by negotiating with
ThinkEquity during the 90-day Exclusivity Period. Plaintiff alleges that it can bring
this claim despite not being a signatory to the Term Sheet because it was a "third·
party beneficiary" (Complaint ,r,r 119·120). Vivani argues that plaintiff is not an
intended third-party beneficiary (Vivani mol at 18·19).
To state a third-party beneficiary claim, a plaintiff must plead: "(1) the
existence of a valid and binding contract between other parties, (2) that the contract
was intended for its benefit, and (3) that the benefit to it is sufficiently immediate ..
. to indicate the assumption by the contracting parties of a duty to compensate it if
the benefit is lost" (Mandarin Trading Ltd v Wildenstein, 16 NY3d 173 [2011]
citing Mendel v Henry Phipps Plaza W., Inc., 6 NY3d 783, 786 [2006]). "Only an
. intended beneficiary of a contract may maintain an action as a third party; an
incidental beneficiary may not" (Artwear, Inc. v Hughes, 202 AD2d 76, 81 ·82 [1st
Dept 1994]).
Vivani cites to Artwearfor the proposition that a third-party can only be an
intended beneficiary if it appears "that no one other than the third party can
recover if the promiser breaches the contract' or the contract language should
otherwise clearly evidence 'an intent to permit enforcement by the third party"' (id
[internal citations omitted]). However, the First Department has called the Artwear
standard "outdated"; the only requirement now is a "clear intention to confer the
benefit of the promised performance" (PT. Bank Mizuho Indonesia v PT. Indah Kiat
Pulp & Paper Corp., 25 AD3d 470, 471 [1st Dept 2006], citing State of California
Pub. Employees' Retirement Sys. v Shearman & Sterling, 95 NY2d 427, 434·435
[2000]). Still, "[a]bsent clear contractual language evincing such intent, New York
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courts have demonstrated a reluctance to interpret circumstances to construe such
an intent" (LaSalle Nat. Bank v Ernst & Young LLP, 285 AD2d 101, 108·109 [1st
Dept 2001]; see e;g. Alfonso v Trucar Leasing Corp., 225 AD3d 401, 402 [1st Dept
2024] [affirming dismissal where there was "no language ... evincing an intent to
permit [plaintiff] to seek enforcement"]).
Here, there is no evidence or allegation to support plaintiff being an intended
beneficiary. The Term Sheet does not contain express or implied terms allowing
plaintiff to enforce it nor is there language that would imply plaintiff is an intended
beneficiary (see Alfonso, 225 AD3d at 402). Plaintiff is not even named or referenced
in the Term Sheet or Termination Agreement. Additionally, the Term Sheet by its
terms provides a remedy for breach solely to Hudson Bay, and Hudson Bay has
already secured a payment of $80,000 in exchange for a waiver of its rights (see
Termination Agreement§ 1). Plaintiff offers no other evidence to demonstrate that
the benefit to it was meant to be anything more than incidental. Plaintiff is not an
intended beneficiary.
But, even if plaintiff were an intended beneficiary, Hudson Bay's termination
of the Term Sheet and waiver of all claims pursuant to the Termination Agreement
bars plaintiffs claim. "[A] third-party beneficiary, whose rights are derivative, is
subject to the same defenses as are available to the contracting party" (Artwear, 202
AD2d at 82). The Termination Agreement "waive[d] any and all rights and claims
[Hudson Bay] may have under the Terms of the Term Sheet" (Termination
Agreement§ I). As such, plaintiff has no greater rights than Hudson Bay and,.by
virtue of the payment and waiver, Vivani's contractual obligations to Hudson Bay
have already been discharged. Plaintiff is therefore precluded by the Termination
Agreement from pursuing this claim.
Plaintiffs claim as a third-party beneficiary against Vivani is dismissed
under CPLR 3211(a)(7) and (a)(5), respectively for lack of standing and waiver.
Count 3 · Tortious Interference with the Agreement by ThinkEquity (MS 002)
Finally, plaintiff asserts that ThinkEquity tortiously interfered with the
Agreement by working with Vivani to arrange and effectuate the Competing
Placement (Complaint ,r,r 105-113).
ThinkEquity first argues that this claim should be dismissed if the breach of
contract claim is also dismissed (MS 2 - NYSCEF # 36, ThinkEquity's mol at 9).
This argument fails given the above finding that the breach claim survives.
ThinkEquity next argues that the Complaint fails to allege that ThinkEquity
intentionally procured Vivani's breach of contract and that any interference was
justifiable because ThinkEquity had superior rights (id. at 8). Specifically,
ThinkEquity claims it had a superior and continuing Right of First Refusal to do
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future financings for Vivani pursuant to the IB Agreement that pre-dated the
Agreement. ThinkEquity claims that its IB Agreement is sufficient justification that
provides a complete defense to the claim of tortious interference (id at IO). Plaintiff
responds that ThinkEquity waived any pre-existing Right of First Refusal it may
have had by executing the Limited Waiver (MS 2· NYSCEF # 38, pltfs mol at 14;
NYSCEF #SI-Limited Waiver at§ I).
Here, accepting the Complaint's allegations as true and drawing all
reasonable inferences in plaintiffs favor, the tortious interference claim must be
dismissed. Notably, ThinkEquity had a pre-existing relationship with Vivani as
shown by the two April 2020 agreements giving ThinkEquity the right of first
refusal and the Limited Waiver adjusting that right (see NYSCEF #s 26·27, 31).
Plaintiff argues that the Limited Waiver fully waived ThinkEquity's right of
first refusal. But plaintiffs argument overreads the document. The Limited Waiver
at most indicates ThinkEquity allowed Vivani to retain plaintiff for the purpose of
the Proposed Merger with Pixium. Specifically,§ 1 of the Limited Waiver waived
ThinkEquity's right of first refusal only with respect to "Combination Activities"
(NYSCEF # 31 § I). "Combination Activities" is defined in the Second Whereas
clause to include four separate activities including fundraising, giving Pixium and
its shareholders securities, and spinning off a subsidiary, all "in furtherance" of the
merger negotiations with Pixium (id at Second Whereas clause). Together,§ 1 and
the Second Whereas clause indicate that ThinkEquity waived its right of first
refusal only with regards to the Proposed Merger with Pixium, not with any other
potential merger.
Plaintiff knew this going in. The Agreement acknowledges ThinkEquity's
preexisting right to work with Vivani and even sets out payment to ThinkEquity for
the Placement. For example, the Agreement specifically states that "the Company
Parties will not engage any placement agents other than [plaintiff] and Think
Equityin connection with the Placement" (NYSCEF # 2 at 1 [emphasis added]). The
Agreement also specifies that the engagement of and performance by plaintiff of the
contemplated services "do not violate any obligations owed by the Company Parties
to any third party (including, without limitation, Think Equit.]1" (id. [emphasis
added]). Vivani was allowed to work with ThinkEquity without breaching the
Agreement.
Thus, ThinkEquity's motion to dismiss Count 3 for tortious interference with
the Agreement is granted (MS 003), and the complaint is dismissed as against
ThinkEquity.
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Conclusion
For the foregoing reasons, it is hereby
ORDERED that defendant Vivani Medical Inc. f/k/a Second Sight Medical
Products Inc.'s (Vivani) motion to dismiss plaintiffs First, Second, and Fourth
Causes of Action (MS 001) is granted in part to the extent that the Second Cause of
Action for breach of the implied covenant of good faith and fair dealing and the
Fourth Cause of Action for breach of the Term Sheet contract are dismissed, and
denied in part as to the First Cause of Action for breach of contract; and it is further
ORDERED that defendant ThinkEquity LLC's motion to dismiss plaintiffs
Third Cause of Action (MS 002) is granted in its entirety, and the Complaint is
dismissed against defendant ThinkEquity LLC; and it is further
ORDERED that defendant Vivani shall e·file its answer to the remaining
First Cause of Action for breach of contract within 20 days of entry of this order;
and it is further
ORDERED that the remaining parties (plaintiff and Vivani) shall appear for
a preliminary conference on August 20, 2025, at 12:30 PM via Microsoft Teams,
with link to be sent by the court; and it is further
ORDERED that prior to the scheduled preliminary conference, the parties
shall meet and confer regarding a stipulated preliminary conference order
·(templates available via hyperlink in Part Rule III.B. of the Part 49 Practices and
Procedures); and. it is further
ORDERED that should the parties agree on a proposed discovery schedule,
they will circulate a proposed preliminary conference order at least one day prior to
the preliminary conference; and it is further
ORDERED that if the parties do not agree on a proposed discovery schedule,
each party will circulate a proposed schedule and note any areas of disagreement in
a letter, at least one day prior to the preliminary conference; and it is further
ORDERED that the Clerk of the Court is directed to enter judgment
dismissing in favor of defendant ThinkEquity LLC; and it is further
ORDERED that the caption is amended to reflect dismissal of defendant
ThinkEquity LLC and shall read as follows:
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-----------------------------------------------------------------------------------x
OPPENHEIMER & CO. INC,
Plaintiff,
- V -
VIVAN! MEDICAL INC. F/K/A SECOND SIGHT MEDICAL
PRODUCTS INC.,
Defendant.
-----------------------------------------------------------------------------------x
and it is further
ORDERED that defendants shall serve a copy of this order with notice of
entry on plaintiff and the Clerk of General Clerk's Office and the County Clerk, who
are directed to mark their records to reflect the change in the caption; and it is
further
ORDERED that such service upon the General Clerk's Office and the County
Clerk shall be made in accordance with the procedures set forth in the Protocol on
Courthouse and County Clerk Procedures for Electronically Filed Cases (accessible
at the "E-Filing'' page and on the court's website).
This constitutes the Decision and Order of the court.
6/12/2025
DATE MAR~
~
CHECK ONE: CASE DISPOSED NON-FINAL DISPOSITION
GRANTED □ DENIED GRANTED IN PART □ OTHER.
APPLICATION: SETTLE ORDER . SUBMIT ORDER
CHECK IF APPROPRIATE: INCLUDES TRANSFER/REASSIGN FIDUCIARY APPOINTMENT □ REFERENCE
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