SHARES OF COMMON STOCK COMMON WARRANTS TO PURCHASE _____ SHARES OF COMMON STOCK AND ____ PRE-FUNDED WARRANTS GT BIOPHARMA, INC. UNDERWRITING AGREEMENT
Exhibit 1.1
_________ SHARES OF COMMON STOCK
COMMON WARRANTS TO PURCHASE _____ SHARES OF COMMON
STOCK
AND
____ PRE-FUNDED WARRANTS
_________,
2021
▇▇▇▇
CAPITAL PARTNERS, LLC
As the
Representative of the
Several
underwriters, if any, named in Schedule I hereto
▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Newport
Beach, CA 92660
Ladies
and Gentlemen:
The
undersigned, GT BIOPHARMA, INC., a company incorporated under the
laws of Delaware (collectively with its subsidiaries and
affiliates, including, without limitation, all entities disclosed
or described in the Registration Statement as being subsidiaries or
affiliates of GT BIOPHARMA, INC., the “Company”), hereby
confirms its agreement (this “Agreement”) with the
several underwriters (such underwriters, including the
Representative (as defined below), the “Underwriters” and each an
“Underwriter”) named in
Schedule I hereto
for which ▇▇▇▇ CAPITAL PARTNERS, LLC is acting as representative to
the several Underwriters (the “Representative” and if
there are no Underwriters other than the Representative, references
to multiple Underwriters shall be disregarded and the term
Representative as used herein shall have the same meaning as
Underwriter) on the terms and conditions set forth
herein.
It
is understood that the several Underwriters are to make a public
offering of the Public Securities as soon as the Representative
deems it advisable to do so. The Public Securities are to be
initially offered to the public at the public offering price set
forth in the Prospectus.
It
is further understood that you will act as the Representative for
the Underwriters in the offering and sale of the Closing Securities
and, if any, the Option Securities in accordance with this
Agreement.
ARTICLE I.
DEFINITIONS
1.1 Definitions. In addition to the
terms defined elsewhere in this Agreement, for all purposes of this
Agreement, the following terms have the meanings set forth in this
Section 1.1:
“Action” shall have the
meaning ascribed to such term in Section 3.1(k).
“Affiliate” means with
respect to any Person, any other Person that, directly or
indirectly through one or more intermediaries, controls or is
controlled by or is under common control with such Person as such
terms are used in and construed under Rule 405 under the Securities
Act.
“Board of Directors” means
the board of directors of the Company.
“Business Day” means any
day other than Saturday, Sunday or other day on which commercial
banks in The City of New York are authorized or required by law to
remain closed; provided, however, for clarification,
commercial banks shall not be deemed to be authorized or required
by law to remain closed due to “stay at home”,
“shelter-in-place”, “non-essential
employee” or any other similar orders or restrictions
or the closure of any physical branch locations at the direction of
any governmental authority so long as the electronic funds transfer
systems (including for wire transfers) of commercial banks in The
City of New York generally are open for use by customers on such
day.
“Closing” means the
closing of the purchase and sale of the Closing Securities pursuant
to Section 2.1.
“Closing Date” means the
hour and the date on the Trading Day on which all conditions
precedent to (i) the Underwriters’ obligations to pay the
Closing Purchase Price and (ii) the Company’s obligations to
deliver the Closing Securities, in each case, have been satisfied
or waived, but in no event later than 10:00 a.m. (New York City
time) on the second (2nd) Trading Day
following the date hereof or at such earlier time as shall be
agreed upon by the Representative and the Company.
“Closing Pre-Funded
Warrants” shall have the meaning ascribed to such term
in Section 2.1(a)(ii).
“Closing Purchase Price”
shall have the meaning ascribed to such term in Section 2.1(b),
which aggregate purchase price shall be net of the underwriting
discounts and commissions.
“Closing Securities” shall
have the meaning ascribed to such term in Section
2.1(a)(ii).
“Closing Shares” shall
have the meaning ascribed to such term in Section
2.1(a)(i).
“Closing Warrants” shall
have the meaning ascribed to such term in Section
2.1(a)(iii).
“Combined Common Purchase
Price” shall have the meaning ascribed to such term in
Section 2.1(b).
“Combined Pre-Funded Purchase
Price” shall have the meaning ascribed to such term in
Section 2.1(b).
“Commission”
means the United States Securities and Exchange
Commission.
“Common Stock” means the
common stock of the Company, par value $0.001 per share, and any
other class of securities into which such securities may hereafter
be reclassified or changed.
“Common Stock Equivalents”
means any securities of the Company or the Subsidiaries which would
entitle the holder thereof to acquire at any time Common Stock,
including, without limitation, any debt, preferred stock, right,
option, warrant or other instrument that is at any time convertible
into or exercisable or exchangeable for, or otherwise entitles the
holder thereof to receive, Common Stock.
“Company Auditor” means
▇▇▇▇▇▇▇▇ & Co, with offices located at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇,▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇.
.
“Company Counsel” means
▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, , with offices located at ▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇.
“Effective Date” shall
have the meaning ascribed to such term in Section
3.1(f).
“Exchange Act” means the
Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated thereunder.
“Execution Date” shall
mean the date on which the parties execute and enter into this
Agreement.
“Exempt Issuance” means
the issuance of (a) shares of Common Stock or options to employees,
officers or directors of the Company pursuant to any stock or
option plan duly adopted for such purpose by a majority of the
non-employee members of the Board of Directors or a majority of the
members of a committee of non-employee directors established for
such purpose for services rendered to the Company, (b) if any
underwriter warrants, include issuance of underwriter warrants and
shares issuable upon exercise of the underwriter warrants
securities upon the exercise or exchange of or conversion of any
Securities issued hereunder and/or other securities exercisable or
exchangeable for or convertible into shares of Common Stock issued
and outstanding on the date of this Agreement, provided that such
securities have not been amended since the date of this Agreement
to increase the number of such securities or to decrease the
exercise price, exchange price or conversion price of such
securities or to extend the term of such securities, and (c)
securities issued pursuant to acquisitions or strategic
transactions approved by a majority of the disinterested directors
of the Company, provided that such securities are issued as
“restricted securities” (as defined in Rule 144) and
carry no registration rights that require or permit the filing of
any registration statement in connection therewith within 90 days
following the Closing Date, and provided that any such issuance
shall only be to a Person (or to the equity holders of a Person)
which is, itself or through its subsidiaries, an operating company
or an owner of an asset in a business synergistic with the business
of the Company and shall provide to the Company additional benefits
in addition to the investment of funds, but shall not include a
transaction in which the Company is issuing securities primarily
for the purpose of raising capital or to an entity whose primary
business is investing in securities.
“FCPA” means the Foreign
Corrupt Practices Act of 1977, as amended.
“FINRA” means the
Financial Industry Regulatory Authority.
“GAAP” shall have the
meaning ascribed to such term in Section 3.1(i).
“Indebtedness” means (a)
any liabilities for borrowed money or amounts owed in excess of
$50,000 (other than trade accounts payable incurred in the ordinary
course of business), (b) all guaranties, endorsements and other
contingent obligations in respect of indebtedness of others,
whether or not the same are or should be reflected in the
Company’s consolidated balance sheet (or the notes thereto),
except guaranties by endorsement of negotiable instruments for
deposit or collection or similar transactions in the ordinary
course of business; and (c) the present value of any lease payments
in excess of $50,000 due under leases required to be capitalized in
accordance with GAAP.
“Liens” means a lien,
charge, pledge, security interest, encumbrance, right of first
refusal, preemptive right or other restriction.
“Lock-Up Agreements” means
the lock-up agreements that are delivered on the date hereof by
each of the Company’s officers and directors and each holder
of Common Stock and Common Stock Equivalents holding, on a fully
diluted basis, more than 5% of the Company’s issued and
outstanding Common Stock, in the form of Exhibit E attached
hereto.
“Material Adverse Effect”
means (i) a material adverse effect on the legality, validity or
enforceability of any Transaction Document, (ii) a material adverse
effect on the results of operations, assets, business, prospects or
condition (financial or otherwise) of the Company and the
Subsidiaries, taken as a whole or (iii) a material adverse effect
on the Company’s ability to perform in any material respect
on a timely basis its obligations under any Transaction
Document.
“Offering” shall have the
meaning ascribed to such term in Section 2.1(c).
“Option Closing Date”
shall have the meaning ascribed to such term in Section
2.2(c).
“Option Closing Purchase
Price” shall have the meaning ascribed to such term in
Section 2.2(b), which aggregate purchase price shall be net of the
underwriting discounts and commissions.
“Option
Securities” shall have the meaning ascribed to such
term in Section 2.2(a).
“Option Shares” shall have
the meaning ascribed to such term in Section
2.2(a)(i).
“Option Warrants” shall
have the meaning ascribed to such term in Section
2.2(a).
“Over-Allotment Option”
shall have the meaning ascribed to such term in Section
2.2.
“Pre-Funded Warrant” shall
be in the form filed as an exhibit to the Registration Statement
(as hereinafter defined), exercisable into an aggregate of [__]
shares of Common Stock, which shall have an exercise price of
$0.001 per share (subject to adjustment as provided in the
Pre-Funded Warrants).
“Pre-Funded Warrant Purchase
Price” shall have the meaning ascribed to such term in
Section 2.1(b).
“Pre-Funded
Warrant Shares” means the shares of Common Stock
issuable upon exercise of the Pre-Funded Warrants.
“Person” means an
individual or corporation, partnership, trust, incorporated or
unincorporated association, joint venture, limited liability
company, joint stock company, government (or an agency or
subdivision thereof) or other entity of any kind.
“Preliminary Prospectus”
means, if any, any preliminary prospectus relating to the
Securities included in the Registration Statement or filed with the
Commission pursuant to Rule 424(b).
“Prior Auditor” means
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇▇▇, LLP, ▇▇▇ ▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇
▇▇▇▇▇
“Proceeding” means an
action, claim, suit, investigation or proceeding (including,
without limitation, an informal investigation or partial
proceeding, such as a deposition), whether commenced or
threatened.
“Prospectus” means the
final prospectus filed for the Registration Statement.
“Prospectus Supplement”
means, if any, any supplement to the Prospectus complying with Rule
424(b) of the Securities Act that is filed with the
Commission.
“Public Securities” means,
collectively, the Closing Securities and, if any, the Option
Securities.
“Registration Statement”
means, collectively, the various parts of the registration
statement prepared by the Company on Form S-1 (File No. 333-251311)
with respect to the Securities, each as amended as of the date
hereof, including the Prospectus and Prospectus Supplement, if any,
the Preliminary Prospectus, if any, and all exhibits filed with or
incorporated by reference into such registration statement, and
includes any Rule 462(b) Registration Statement.
“Required Approvals” shall
have the meaning ascribed to such term in Section
3.1(e).
“Rule 424” means Rule 424
promulgated by the Commission pursuant to the Securities Act, as
such Rule may be amended or interpreted from time to time, or any
similar rule or regulation hereafter adopted by the Commission
having substantially the same purpose and effect as such
Rule.
“Rule 462(b) Registration
Statement” means any registration statement prepared
by the Company registering additional Public Securities, which was
filed with the Commission on or prior to the date hereof and became
automatically effective pursuant to Rule 462(b) promulgated by the
Commission pursuant to the Securities Act.
“SEC Reports” shall have
the meaning ascribed to such term in Section 3.1(i).
“Securities” means the
Closing Securities, the Option Securities and the Warrant
Shares.
“Securities Act” means the
Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder.
“Share Purchase Price”
shall have the meaning ascribed to such term in Section
2.1(b).
“Shares” means,
collectively, the shares of Common Stock delivered to the
Underwriters in accordance with Section 2.1(a)(i) and Section
2.2(a).
“SHLLP”
means ▇▇▇▇▇▇ ▇▇▇▇▇▇ LLP with offices located at ▇▇▇ ▇ ▇▇▇▇▇▇ ▇▇,
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇.
“Subsidiary” means any
subsidiary of the Company and shall, where applicable, also include
any direct or indirect subsidiary of the Company formed or acquired
after the date hereof.
“Trading Day” means a day
on which the principal Trading Market is open for
trading.
“Trading Market” means any
of the following markets or exchanges on which the Common Stock is
listed or quoted for trading on the date in question: the NYSE
American, the Nasdaq Capital Market, the Nasdaq Global Market, the
Nasdaq Global Select Market, the New York Stock Exchange OTCQX or
OTCQB (or any successors to any of the foregoing).
“Transaction Documents”
means this Agreement, the Warrants, the Warrant Agency Agreement,
the Lock-Up Agreements, and any other documents or agreements
executed in connection with the transactions contemplated
hereunder.
“Transfer Agent” means
Computershare, the current transfer agent of the Company, with
offices located at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇
▇▇▇▇▇, and any successor transfer agent of the
Company.
“Warrant Agency Agreement”
means the warrant agency agreement dated on or about the date
hereof, among the Company and Computershare in the form of
Exhibit D attached
hereto.
“Warrant Purchase Price”
shall have the meaning ascribed to such term in Section
2.1(b).
“Warrant Shares” means the
shares of Common Stock issuable upon exercise of the
Warrants.
“Warrants” means the
warrants in the form filed as an exhibit to the Registration
Statement, exercisable into an aggregate of [__] shares of Common
Stock, which shall have an exercise price of $0.001 per share
(subject to adjustment as provided in the Warrants).
ARTICLE II.
PURCHASE AND SALE
2.1 Closing.
(a) Upon the terms and
subject to the conditions set forth herein, the Company agrees to
sell in the aggregate ________ shares of Common Stock, ____
Pre-Funded Warrants, and ____Warrants, exercisable for an aggregate
of _____ shares of Common Stock, and each Underwriter agrees to
purchase, severally and not jointly, at the Closing, the following
securities of the Company:
(i) the number of
shares of Common Stock (the “Closing Shares”) set
forth opposite the name of such Underwriter on Schedule I hereof;
and
(ii) the
number of shares of Pre-Funded Warrants (the “Closing
Pre-Funded Warrants”) set forth opposite the name of such
Underwriter on Schedule I hereof; and
(iii) Warrants
to purchase up to the number of shares of Common Stock set forth
opposite the name of such Underwriter on Schedule I hereof (the
“Closing
Warrants” and, collectively with the Closing Shares
and the Pre-Funded Warrants the “Closing Securities”),
which Warrants shall have an exercise price of $____, subject to
adjustment as provided therein.
(b) The aggregate
purchase price for the Closing Securities shall equal the amount
set forth opposite the name of such Underwriter on Schedule I hereto (the
“Closing Purchase
Price”). The combined purchase price for one Share and
a Warrant to purchase ___ Warrant Share shall be $_____ (the
“Combined Common
Purchase Price”) which shall be allocated as $_____
per Share (the “Share Purchase Price”)
and $0.01 per Warrant (the “Warrant Purchase Price”).
The combined purchase price for one Pre-Funded Warrant and a
Warrant to purchase ___ Warrant Share shall be $_____ (the
“Combined Pre-Funded
Purchase Price”) which shall be allocated as $_____
per Pre-Funded Warrant (the “Pre-Funded Warrant Purchase
Price”) and $0.01 per Warrant; and
(c) On the
Closing Date, each Underwriter shall deliver or cause to be
delivered to the Company, via wire transfer, immediately available
funds equal to such Underwriter’s Closing Purchase Price and
the Company shall deliver to, or as directed by, such Underwriter
its respective Closing Securities and the Company shall deliver the
other items required pursuant to Section 2.3 deliverable at the
Closing. Upon satisfaction of the covenants and conditions set
forth in Sections 2.3 and 2.4, the Closing shall occur at the
offices of SHLLP or such other location as the Company and
Representative shall mutually agree. The Public Securities are to
be offered initially to the public at the offering price set forth
on the cover page of the Prospectus (the “Offering”).
(d) The Company
acknowledges and agrees that, with respect to any Notice(s) of
Exercise (as defined in the Pre-Funded Warrants) delivered by a
Holder (as defined in the Pre-Funded Warrants) on or prior to 12:00
p.m. (New York City time) on the Closing Date, which Notice(s) of
Exercise may be delivered at any time after the time of execution
of this Agreement, the Company shall deliver the Exercise Shares
(as defined in the Pre-Funded Warrants) subject to such notice(s)
to the Holder by 4:00 p.m. (New York City time) on the Closing Date
and the Closing Date shall be the Warrant Share Delivery Date (as
defined in the Pre-Funded Warrants). The Company acknowledges and
agrees that the Holders are third-party beneficiaries of this
covenant of the Company.
2.2 Over-Allotment
Option.
(a) For the purposes of
covering any over-allotments in connection with the distribution
and sale of the Closing Securities, the Representative is hereby
granted an option (the “Over-Allotment Option”)
to purchase, in the aggregate, up to _____ shares of Common Stock
(the “Option
Shares”) and up to _________Warrants to purchase (the
“Option
Warrants” and, collectively with the Option Shares,
the Pre-Funded Warrants and the “Option
Securities”)1 which may be purchased in any
combination of Option Shares and/or Option Warrants at the Share
Purchase Price and/or Warrant Purchase Price,
respectively.
(b) In connection with
an exercise of the Over-Allotment Option, (a) the purchase price to
be paid for the Option Shares is equal to the product of the Share
Purchase Price multiplied by the number of Option Shares to be
purchased and (b) the purchase price to be paid for the Option
Warrants is equal to the product of the Warrant Purchase Price
multiplied by the number of Option Warrants to be purchased (the
aggregate purchase price to be paid on an Option Closing Date, the
“Option Closing
Purchase Price”).
(c) The Over-Allotment
Option granted pursuant to this Section 2.2 may be exercised by the
Representative as to all (at any time) or any part (from time to
time) of the Option Securities within 45 days after the Execution
Date. An Underwriter will not be under any obligation to purchase
any Option Securities prior to the exercise of the Over-Allotment
Option by the Representative. The Over-Allotment Option granted
hereby may be exercised by the giving of oral notice to the Company
from the Representative, which must be confirmed in writing by
overnight mail or facsimile or other electronic transmission
setting forth the number of Option Shares and/or Option Warrants to
be purchased and the date and time for delivery of and payment for
the Option Securities (each, an “Option Closing Date”),
which will not be later than two (2) full Business Days after the
date of the notice or such other time as shall be agreed upon by
the Company and the Representative, at the offices of
SHLLP or at such other
place (including remotely by facsimile or other electronic
transmission) as shall be agreed upon by the Company and the
Representative. If such delivery and payment for the Option
Securities does not occur on the Closing Date, each Option Closing
Date will be as set forth in the notice. Upon exercise of the
Over-Allotment Option, the Company will become obligated to convey
to the Underwriters, and, subject to the terms and conditions set
forth herein, the Underwriters will become obligated to purchase,
the number of Option Shares and/or Option Warrants specified in
such notice. The Representative may cancel the Over-Allotment
Option at any time prior to the expiration of the Over-Allotment
Option by written notice to the Company.
2.3 Deliveries. The Company shall
deliver or cause to be delivered to each Underwriter (if
applicable) the following:
(i) At the Closing
Date, the Closing Shares and, as to each Option Closing Date, if
any, the applicable Option Shares, which shares shall be delivered
via The Depository Trust Company Deposit or Withdrawal at Custodian
system for the accounts of the several Underwriters;
(ii) At
the Closing Date, the Closing Warrants and, as to each Option
Closing Date, if any, the applicable Option Warrants, in definitive
form, in such denominations and registered in such names as the
Underwriter or its designees request, to the several
Underwriters;
(iii) At
the Closing Date, and each Option Closing Date, if any, to the
underwriters, a Warrant to purchase up to a number of shares units
of Common Stock and Warrants equal to five percent (5%) of the
Closing Shares, and Option Shares and Closing Pre-Funded Warrants
and Option Pre-Funded Warrants, and the Closing Warrants and the
Option Warrants issued on such Closing Date and Option Closing
Date, as applicable, for the accounts of the Representative and
▇▇▇▇▇▇ ▇▇▇▇▇ Securities, Inc (or their designees), which Warrant
shall have an exercise price of $____, subject to adjustment
therein, and will otherwise be on the same terms as the Closing
Warrants (except as otherwise required by FINRA Rule 5110), and
registered in the names of the Representative, ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, Inc., and/or their respective designees;
(iv) At
the Closing Date, the Warrant Agency Agreement duly executed by the
parties thereto;
(v) At the Closing
Date, a legal opinion of Company Counsel addressed to the
Underwriters, including, without limitation, a negative assurance
letter, substantially in the form of Exhibit A attached hereto and
as to the Closing Date and as to each Option Closing Date, if any,
a bring-down opinion from Company Counsel in form and substance
reasonably satisfactory to the Representative and the favorable
opinions of intellectual property legal counsel and FDA legal
counsel to the Company, including, without limitation, a negative
assurance letter, addressed to the Underwriters and in form and
substance satisfactory to the Representative;
(vi) Contemporaneously
herewith, a cold comfort letter, addressed to the Underwriters and
in form and substance satisfactory in all respects to the
Representative from the Company Prior Auditor dated, respectively,
as of the date of this Agreement and a bring-down letter dated as
of the Closing Date and each Option Closing Date, if
any;
(vii) On
the Closing Date and on each Option Closing Date, the duly executed
and delivered Officer’s Certificate, substantially in the
form required by Exhibit
B attached hereto;
(viii) On
the Closing Date and on each Option Closing Date, the duly executed
and delivered Secretary’s Certificate, substantially in the
form required by Exhibit
C attached hereto; and
(ix) Contemporaneously
herewith, the duly executed and delivered Lock-Up
Agreements.
2.4 Closing Conditions. The
respective obligations of each Underwriter hereunder in connection
with the Closing and each Option Closing Date are subject to the
following conditions being met:
(i) the accuracy in all
material respects when made and on the date in question (other than
representations and warranties of the Company already qualified by
materiality, which shall be true and correct in all respects) of
the representations and warranties of the Company contained herein
(unless as of a specific date therein);
(ii) all
obligations, covenants and agreements of the Company required to be
performed at or prior to the date in question shall have been
performed;
(iii) the
delivery by the Company of the items set forth in Section 2.3 of
this Agreement;
(iv) the
Registration Statement shall be effective on the date of this
Agreement and at each of the Closing Date and each Option Closing
Date, if any, no stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings
for that purpose shall have been instituted or shall be pending or
contemplated by the Commission and any request on the part of the
Commission for additional information shall have been complied with
to the reasonable satisfaction of the Representative;
(v) by the Execution
Date, if required by FINRA, the Underwriters shall have received
clearance from FINRA as to the amount of compensation allowable or
payable to the Underwriters as described in the Registration
Statement;
(vi) the
Closing Shares, the Option Shares and the Warrant Shares have been
approved for listing on the Trading Market; and
(vii) prior
to and on each of the Closing Date and each Option Closing Date, if
any: (i) there shall have been no material adverse change or
development involving a prospective material adverse change in the
condition or prospects or the business activities, financial or
otherwise, of the Company from the latest dates as of which such
condition is set forth in the Registration Statement and
Prospectus; (ii) no action suit or proceeding, at law or in
equity, shall have been pending or threatened against the Company
or any Affiliate of the Company before or by any court or federal
or state commission, board or other administrative agency wherein
an unfavorable decision, ruling or finding may materially adversely
affect the business, operations, prospects or financial condition
or income of the Company, except as set forth in the Registration
Statement and Prospectus; (iii) no stop order shall have been
issued under the Securities Act and no proceedings therefor shall
have been initiated or threatened by the Commission; and
(iv) the Registration Statement and the Prospectus and any
amendments or supplements thereto shall contain all material
statements which are required to be stated therein in accordance
with the Securities Act and the rules and regulations thereunder
and shall conform in all material respects to the requirements of
the Securities Act and the rules and regulations thereunder, and
neither the Registration Statement nor the Prospectus nor any
amendment or supplement thereto shall contain any untrue statement
of a material fact or omit to state any material fact required to
be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not
misleading.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES
3.1 Representations and Warranties of the
Company. The Company represents and warrants to the
Underwriters as of the Execution Date, as of the Closing Date and
as of each Option Closing Date, if any, as follows:
(a) Subsidiaries. All of the direct
and indirect Subsidiaries of the Company are set forth in the SEC
Reports. The Company owns, directly or indirectly, all of the
capital stock or other equity interests of each Subsidiary free and
clear of any Liens, and all of the issued and outstanding shares of
capital stock of each Subsidiary are validly issued and are fully
paid, non-assessable and free of preemptive and similar rights to
subscribe for or purchase securities. If the Company has no
Subsidiaries, all other references to the Subsidiaries or any of
them in the Transaction Documents shall be
disregarded.
(a) Organization and Qualification.
The Company and each of the Subsidiaries is an entity duly
incorporated or otherwise organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation or
organization, with the requisite power and authority to own and use
its properties and assets and to carry on its business as currently
conducted. Neither the Company nor any Subsidiary is in violation
nor default of any of the provisions of its respective certificate
or articles of incorporation, bylaws or other organizational or
charter documents. Each of the Company and the Subsidiaries is duly
qualified to conduct business and is in good standing as a foreign
corporation or other entity in each jurisdiction in which the
nature of the business conducted or property owned by it makes such
qualification necessary, except where the failure to be so
qualified or in good standing, as the case may be, could not have
or reasonably be expected to result in a Material Adverse Effect
and no Proceeding has been instituted in any such jurisdiction
revoking, limiting or curtailing or seeking to revoke, limit or
curtail such power and authority or qualification.
(b) Authorization; Enforcement. The
Company has the requisite corporate power and authority to enter
into and to consummate the transactions contemplated by this
Agreement and each of the other Transaction Documents to which the
Company is a party and otherwise to carry out its obligations
hereunder and thereunder. The execution and delivery of this
Agreement and each of the other Transaction Documents by the
Company and the consummation by it of the transactions contemplated
hereby and thereby have been duly authorized by all necessary
action on the part of the Company and no further action is required
by the Company, the Board of Directors or the Company’s
stockholders in connection herewith or therewith other than in
connection with the Required Approvals. This Agreement and each
other Transaction Document to which the Company is a party has been
(or upon delivery will have been) duly executed by the Company and,
when delivered in accordance with the terms hereof and thereof,
will constitute the valid and binding obligation of the Company
enforceable against the Company in accordance with its terms,
except (i) as limited by general equitable principles and
applicable bankruptcy, insolvency, reorganization, moratorium and
other laws of general application affecting enforcement of
creditors’ rights generally, (ii) as limited by laws relating
to the availability of specific performance, injunctive relief or
other equitable remedies and (iii) insofar as indemnification and
contribution provisions may be limited by applicable
law.
(c) No Conflicts. The execution,
delivery and performance by the Company of this Agreement and the
other Transaction Documents to which it is a party, the issuance
and sale of the Securities and the consummation by it of the
transactions contemplated hereby and thereby do not and will not
(i) conflict with or violate any provision of the Company’s
or any Subsidiary’s certificate or articles of incorporation,
bylaws or other organizational or charter documents, or (ii)
conflict with, or constitute a default (or an event that with
notice or lapse of time or both would become a default) under,
result in the creation of any Lien upon any of the properties or
assets of the Company or any Subsidiary, or give to others any
rights of termination, amendment, anti-dilution or similar
adjustments, acceleration or cancellation (with or without notice,
lapse of time or both) of, any agreement, credit facility, debt or
other instrument (evidencing a Company or Subsidiary debt or
otherwise) or other understanding to which the Company or any
Subsidiary is a party or by which any property or asset of the
Company or any Subsidiary is bound or affected, or (iii) subject to
the Required Approvals, conflict with or result in a violation of
any law, rule, regulation, order, judgment, injunction, decree or
other restriction of any court or governmental authority to which
the Company or a Subsidiary is subject (including federal and state
securities laws and regulations), or by which any property or asset
of the Company or a Subsidiary is bound or affected; except in the
case of each of clauses (ii) and (iii), such as could not have or
reasonably be expected to result in a Material Adverse
Effect.
(d) Filings, Consents and
Approvals. The Company is not required to obtain any
consent, waiver, authorization or order of, give any notice to, or
make any filing or registration with, any court or other federal,
state, local or other governmental authority or other Person in
connection with the execution, delivery and performance by the
Company of the Transaction Documents, other than: (i) the filing
with the Commission of the Registration Statement, Preliminary
Prospectus and Prospectus and (ii) such filings as are required to
be made under applicable state securities laws (collectively, the
“Required
Approvals”).
(e) Registration Statement. The
Company has filed with the Commission the Registration Statement,
including any related Prospectus or Prospectuses, for the
registration of the Securities under the Securities Act, which
Registration Statement has been prepared by the Company in all
material respects in conformity with the requirements of the
Securities Act and the rules and regulations of the Commission
under the Securities Act. The Registration Statement has been
declared effective by the Commission on the date hereof (the
“Effective
Date”). The Company has filed with the Commission a
registration under the Exchange Act of its Common Stock and
Warrants; and that registration has been declared effective by the
Commission as of the date hereof.
(f) Issuance of Securities. The
Securities are duly authorized and, when issued and paid for in
accordance with the applicable Transaction Documents, will be duly
and validly issued, fully paid and nonassessable, free and clear of
all Liens imposed by the Company. The Warrant Shares, when issued
in accordance with the terms of the Warrants, will be validly
issued, fully paid and nonassessable, free and clear of all Liens
imposed by the Company. The Company has reserved from its duly
authorized capital stock the maximum number of shares of Common
Stock issuable pursuant to this Agreement and the Warrants. The
holder of the Securities will not be subject to personal liability
by reason of being such holders. The Securities are not and will
not be subject to the preemptive rights of any holders of any
security of the Company or similar contractual rights granted by
the Company. All corporate action required to be taken for the
authorization, issuance and sale of the Securities has been duly
and validly taken. The Securities conform in all material respects
to all statements with respect thereto contained in the
Registration Statement.
(g) Capitalization. The
capitalization of the Company is as set forth in the SEC Reports.
The Company has not issued any capital stock since December 31,
2020, other than pursuant to
the exercise of employee stock options under the Company’s
stock option plans, the issuance of shares of Common Stock to
employees pursuant to the Company’s employee stock purchase
plans and pursuant to the conversion and/or exercise of Common
Stock Equivalents outstanding as of the date of the most recently
filed periodic report under the Exchange Act. No Person has any
right of first refusal, preemptive right, right of participation,
or any similar right to participate in the transactions
contemplated by the Transaction Documents. Except as a result of
the purchase and sale of the Securities, there are no outstanding
options, warrants, scrip rights to subscribe to, calls or
commitments of any character whatsoever relating to, or securities,
rights or obligations convertible into or exercisable or
exchangeable for, or giving any Person any right to subscribe for
or acquire, any shares of Common Stock or the capital stock of any
Subsidiary, or contracts, commitments, understandings or
arrangements by which the Company or any Subsidiary is or may
become bound to issue additional shares of Common Stock or Common
Stock Equivalents or the capital stock of any Subsidiary. The
issuance and sale of the Securities will not obligate the Company
or any Subsidiary to issue shares of Common Stock or other
securities to any Person (other than the Underwriters). There are
no outstanding securities or instruments of the Company or any
Subsidiary with any provision that adjusts the exercise,
conversion, exchange or reset price of such security or instrument
upon an issuance of securities by the Company or any Subsidiary.
There are no outstanding securities or instruments of the Company
or any Subsidiary that contain any redemption or similar
provisions, and there are no contracts, commitments, understandings
or arrangements by which the Company or any Subsidiary is or may
become bound to redeem a security of the Company or such
Subsidiary. The Company does not have any stock appreciation rights
or “phantom stock” plans or agreements or any similar
plan or agreement. All of
the outstanding shares of capital stock of the Company are duly
authorized, validly issued, fully paid and nonassessable, have been
issued in compliance with all federal and state securities laws,
and none of such outstanding shares was issued in violation of any
preemptive rights or similar rights to subscribe for or purchase
securities. The authorized shares of the Company conform in all
material respects to all statements relating thereto contained in
the Registration Statement and the Prospectus. The offers and sales
of the Company’s securities were at all relevant times either
registered under the Securities Act and the applicable state
securities or Blue Sky laws or, based in part on the
representations and warranties of the purchasers, exempt from such
registration requirements. No further approval or authorization of
any stockholder, the Board of Directors or others is required for
the issuance and sale of the Securities. There are no stockholders
agreements, voting agreements or other similar agreements with
respect to the Company’s capital stock to which the Company
is a party or, to the knowledge of the Company, between or among
any of the Company’s stockholders.
(h) SEC Reports; Financial
Statements. The Company has filed all reports, schedules,
forms, statements and other documents required to be filed by the
Company under the Securities Act and the Exchange Act, including
pursuant to Section 13(a) or 15(d) thereof, for the two years
preceding the date hereof (or such shorter period as the Company
was required by law or regulation to file such material) (the
foregoing materials, including the exhibits thereto and documents
incorporated by reference therein, together with the Prospectus and
the Prospectus Supplement, being collectively referred to herein as
the “SEC
Reports”) on a timely basis or has received a valid
extension of such time of filing and has filed any such SEC Reports
prior to the expiration of any such extension. As of their
respective dates, the SEC Reports complied in all material respects
with the requirements of the Securities Act and the Exchange Act,
as applicable, and none of the SEC Reports, when filed, contained
any untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary in order
to make the statements therein, in the light of the circumstances
under which they were made, not misleading. The financial
statements of the Company included in the SEC Reports comply in all
material respects with applicable accounting requirements and the
rules and regulations of the Commission with respect thereto as in
effect at the time of filing. Such financial statements have been
prepared in accordance with United States generally accepted
accounting principles applied on a consistent basis during the
periods involved (“GAAP”), except as may be
otherwise specified in such financial statements or the notes
thereto and except that unaudited financial statements may not
contain all footnotes required by GAAP, and fairly present in all
material respects the financial position of the Company and its
consolidated Subsidiaries as of and for the dates thereof and the
results of operations and cash flows for the periods then ended,
subject, in the case of unaudited statements, to normal,
immaterial, year-end audit adjustments. The agreements and
documents described in the Registration Statement, the Prospectus,
the Prospectus Supplement and the SEC Reports conform to the
descriptions thereof contained therein and there are no agreements
or other documents required by the Securities Act and the rules and
regulations thereunder to be described in the Registration
Statement, the Prospectus, the Prospectus Supplement or the SEC
Reports or to be filed with the Commission as exhibits to the
Registration Statement, that have not been so described or filed.
Each agreement or other instrument (however characterized or
described) to which the Company is a party or by which it is or may
be bound or affected and (i) that is referred to in the
Registration Statement, the Prospectus, the Prospectus Supplement
or the SEC Reports, or (ii) is material to the Company’s
business, has been duly authorized and validly executed by the
Company, is in full force and effect in all material respects and
is enforceable against the Company and, to the Company’s
knowledge, the other parties thereto, in accordance with its terms,
except (x) as such enforceability may be limited by
bankruptcy, insolvency, reorganization or similar laws affecting
creditors’ rights generally, (y) as enforceability of
any indemnification or contribution provision may be limited under
the federal and state securities laws, and (z) that the remedy
of specific performance and injunctive and other forms of equitable
relief may be subject to the equitable defenses and to the
discretion of the court before which any proceeding therefore may
be brought. None of such agreements or instruments has been
assigned by the Company, and neither the Company nor, to the best
of the Company’s knowledge, any other party is in default
thereunder and, to the best of the Company’s knowledge, no
event has occurred that, with the lapse of time or the giving of
notice, or both, would constitute a default thereunder. To the best
of the Company’s knowledge, performance by the Company of the
material provisions of such agreements or instruments will not
result in a violation of any existing applicable law, rule,
regulation, judgment, order or decree of any governmental agency or
court, domestic or foreign, having jurisdiction over the Company or
any of its assets or businesses, including, without limitation,
those relating to environmental laws and regulations.
(i) Material Changes; Undisclosed Events,
Liabilities or Developments. Since the date of the latest
audited financial statements included within the SEC Reports,
except as specifically disclosed in a subsequent SEC Report filed
prior to the date hereof, (i) there has been no event, occurrence
or development that has had or that could reasonably be expected to
result in a Material Adverse Effect, (ii) the Company has not
incurred any liabilities (contingent or otherwise) other than (A)
trade payables and accrued expenses incurred in the ordinary course
of business consistent with past practice and (B) liabilities not
required to be reflected in the Company’s financial
statements pursuant to GAAP or disclosed in filings made with the
Commission, (iii) the Company has not altered its method of
accounting, (iv) the Company has not declared or made any dividend
or distribution of cash or other property to its stockholders or
purchased, redeemed or made any agreements to purchase or redeem
any shares of its capital stock, (v) the Company has not issued any
equity securities to any officer, director or Affiliate, except
pursuant to existing Company stock option plans and (vi) no officer
or director of the Company has resigned from any position with the
Company. The Company does not have pending before the Commission
any request for confidential treatment of information. Except for
the issuance of the Securities contemplated by this Agreement, no
event, liability, fact, circumstance, occurrence or development has
occurred or exists or is reasonably expected to occur or exist with
respect to the Company or its Subsidiaries or their respective
businesses, prospects, properties, operations, assets or financial
condition that would be required to be disclosed by the Company
under applicable securities laws at the time this representation is
made or deemed made that has not been publicly disclosed at least 1
Trading Day prior to the date that this representation is made.
Unless otherwise disclosed in an SEC Report filed prior to the date
hereof, the Company has not: (i) issued any securities or
incurred any liability or obligation, direct or contingent, for
borrowed money; or (ii) declared or paid any dividend or made
any other distribution on or in respect to its capital
stock.
(j) Litigation. There is no action,
suit, inquiry, notice of violation, proceeding or investigation
pending or, to the knowledge of the Company, threatened against or
affecting the Company, any Subsidiary or any of their respective
properties before or by any court, arbitrator, governmental or
administrative agency or regulatory authority (federal, state,
county, local or foreign) (collectively, an “Action”) which (i)
adversely affects or challenges the legality, validity or
enforceability of any of the Transaction Documents or the
Securities or (ii) could, if there were an unfavorable decision,
have or reasonably be expected to result in a Material Adverse
Effect. Neither the Company nor any Subsidiary, nor any director or
officer thereof, is or has been the subject of any Action involving
a claim of violation of or liability under federal or state
securities laws or a claim of breach of fiduciary duty. There has
not been, and to the knowledge of the Company, there is not pending
or contemplated, any investigation by the Commission involving the
Company or any current or former director or officer of the
Company. The Commission has not issued any stop order or other
order suspending the effectiveness of any registration statement
filed by the Company or any Subsidiary under the Exchange Act or
the Securities Act.
(k) Labor Relations. No labor
dispute exists or, to the knowledge of the Company, is imminent
with respect to any of the employees of the Company, which could
reasonably be expected to result in a Material Adverse Effect. None
of the Company’s or its Subsidiaries’ employees is a
member of a union that relates to such employee’s
relationship with the Company or such Subsidiary, and neither the
Company nor any of its Subsidiaries is a party to a collective
bargaining agreement, and the Company and its Subsidiaries believe
that their relationships with their employees are good. To the
knowledge of the Company, no executive officer of the Company or
any Subsidiary, is, or is now expected to be, in violation of any
material term of any employment contract, confidentiality,
disclosure or proprietary information agreement or non-competition
agreement, or any other contract or agreement or any restrictive
covenant in favor of any third party, and the continued employment
of each such executive officer does not subject the Company or any
of its Subsidiaries to any liability with respect to any of the
foregoing matters. The Company and its Subsidiaries are in
compliance with all U.S. federal, state, local and foreign laws and
regulations relating to employment and employment practices, terms
and conditions of employment and wages and hours, except where the
failure to be in compliance could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse
Effect.
(l) Compliance.
Neither the Company nor any Subsidiary: (i) is in default under or
in violation of (and no event has occurred that has not been waived
that, with notice or lapse of time or both, would result in a
default by the Company or any Subsidiary under), nor has the
Company or any Subsidiary received notice of a claim that it is in
default under or that it is in violation of, any indenture, loan or
credit agreement or any other agreement or instrument to which it
is a party or by which it or any of its properties is bound
(whether or not such default or violation has been waived), (ii) is
in violation of any judgment, decree or order of any court,
arbitrator or other governmental authority or (iii) is or has been
in violation of any statute, rule, ordinance or regulation of any
governmental authority, including without limitation all foreign,
federal, state and local laws relating to taxes, environmental
protection, occupational health and safety, product quality and
safety and employment and labor matters, except in each case as
could not have or reasonably be expected to result in a Material
Adverse Effect.
(m) Regulatory Permits. The Company
and the Subsidiaries possess all certificates, authorizations and
permits issued by the appropriate federal, state, local or foreign
regulatory authorities necessary to conduct their respective
businesses as described in the SEC Reports, except where the
failure to possess such permits could not reasonably be expected to
result in a Material Adverse Effect (each, a “Material Permit”), and
neither the Company nor any Subsidiary has received any notice of
proceedings relating to the revocation or modification of any
Material Permit. The disclosures in the Registration Statement
concerning the effects of Federal, State, local and all foreign
regulation on the Company’s business as currently
contemplated are correct in all material respects.
(n) Title to Assets. The Company
and the Subsidiaries have good and marketable title in fee simple
to, or have valid and marketable rights to lease or otherwise use,
all real property and all personal property that is material to the
business of the Company and the Subsidiaries, in each case free and
clear of all Liens, except for (i) Liens as do not materially
affect the value of such property and do not materially interfere
with the use made and proposed to be made of such property by the
Company and the Subsidiaries and (ii) Liens for the payment of
federal, state or other taxes, for which appropriate reserves have
been made therefor in accordance with GAAP, and the payment of
which is neither delinquent nor subject to penalties. Any real
property and facilities held under lease by the Company and the
Subsidiaries are held by them under valid, subsisting and
enforceable leases with which the Company and the Subsidiaries are
in compliance.
(o) Intellectual Property. The
Company and the Subsidiaries have, or have rights to use, all
patents, patent applications, trademarks, trademark applications,
service marks, trade names, trade secrets, inventions, copyrights,
licenses and other intellectual property rights and similar rights
necessary or required for use in connection with their respective
businesses as described in the SEC Reports and which the failure to
do so could have a Material Adverse Effect (collectively, the
“Intellectual
Property Rights”). None of, and neither the Company
nor any Subsidiary has received a notice (written or otherwise)
that any of, the Intellectual Property Rights has expired,
terminated or been abandoned, or is expected to expire or terminate
or be abandoned, within two (2) years from the date of this
Agreement. Neither the Company nor any Subsidiary has received,
since the date of the latest audited financial statements included
within the SEC Reports, a written notice of a claim or otherwise
has any knowledge that the Intellectual Property Rights violate or
infringe upon the rights of any Person. To the knowledge of the
Company, all such Intellectual Property Rights are enforceable and
there is no existing infringement by another Person of any of the
Intellectual Property Rights. The Company and its Subsidiaries have
taken reasonable security measures to protect the secrecy,
confidentiality and value of all of their intellectual properties,
except where failure to do so could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse
Effect.
(p) Insurance. The Company and the
Subsidiaries are insured by insurers of recognized financial
responsibility against such losses and risks and in such amounts as
are prudent and customary in the businesses in which the Company
and the Subsidiaries are engaged, including, but not limited to,
directors and officers insurance coverage. Neither the Company nor
any Subsidiary has any 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 from similar insurers as may
be necessary to continue its business without a significant
increase in cost.
(q) Transactions With Affiliates and
Employees. Except as set forth in the SEC Reports, none of
the officers or directors of the Company or any Subsidiary and, to
the knowledge of the Company, none of the employees of the Company
or any Subsidiary is presently a party to any transaction with the
Company or any Subsidiary (other than for services as employees,
officers and directors), including any contract, agreement or other
arrangement providing for the furnishing of services to or by,
providing for rental of real or personal property to or from,
providing for the borrowing of money from or lending of money to or
otherwise requiring payments to or from, any officer, director or
such employee or, to the knowledge of the Company, any entity in
which any officer, director, or any such employee has a substantial
interest or is an officer, director, trustee, stockholder, member
or partner, in each case in excess of $120,000 other than for (i)
payment of salary or consulting fees for services rendered, (ii)
reimbursement for expenses incurred on behalf of the Company and
(iii) other employee benefits, including stock option agreements
under any stock option plan of the Company.
(r) ▇▇▇▇▇▇▇▇-▇▇▇▇▇; Internal Accounting
Controls. The Company and the Subsidiaries are in compliance
with any and all applicable requirements of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act
of 2002 that are effective as of the date hereof, and any and all
applicable rules and regulations promulgated by the Commission
thereunder that are effective as of the date hereof and as of the
Closing Date. The Company and the
Subsidiaries maintain a system of internal accounting controls
sufficient to provide reasonable assurance that: (i) transactions
are executed in accordance with management’s general or
specific authorizations, (ii) transactions are recorded as
necessary to permit preparation of financial statements in
conformity with GAAP and to maintain asset accountability, (iii)
access to assets is permitted only in accordance with
management’s general or specific authorization, and (iv) the
recorded accountability for assets is compared with the existing
assets at reasonable intervals and appropriate action is taken with
respect to any differences. The Company and the Subsidiaries have
established disclosure controls and procedures (as defined in
Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Company and the
Subsidiaries and designed such disclosure controls and procedures
to ensure that information required to be disclosed by the Company
in the reports it files or submits under the Exchange Act is
recorded, processed, summarized and reported, within the time
periods specified in the Commission’s rules and forms. The
Company’s certifying officers have evaluated the
effectiveness of the disclosure controls and procedures of the
Company and the Subsidiaries as of the end of the period covered by
the most recently filed periodic report under the Exchange Act
(such date, the “Evaluation
Date”). The Company
presented in its most recently filed periodic report under the
Exchange Act the conclusions of the certifying officers about the
effectiveness of the disclosure controls and procedures based on
their evaluations as of the Evaluation Date. Since the Evaluation
Date, there have been no changes in the internal control over
financial reporting (as such term is defined in the Exchange Act)
of the Company and its Subsidiaries that have materially affected,
or is reasonably likely to materially affect, the internal control
over financial reporting of the Company and its
Subsidiaries.
(s) Certain Fees. Except as set
forth in the Prospectus Supplement, no brokerage or finder’s
fees or commissions are or will be payable by the Company, any
Subsidiary or Affiliate of the Company to any broker, financial
advisor or consultant, finder, placement agent, investment banker,
bank or other Person with respect to the transactions contemplated
by the Transaction Documents. To the Company’s knowledge,
there are no other arrangements, agreements or understandings of
the Company or, to the Company’s knowledge, any of its
stockholders that may affect the Underwriters’ compensation,
as determined by FINRA. The Company has not made any direct or
indirect payments (in cash, securities or otherwise) to:
(i) any person, as a finder’s fee, consulting fee or
otherwise, in consideration of such person raising capital for the
Company or introducing to the Company persons who raised or
provided capital to the Company; (ii) any FINRA member; or
(iii) any person or entity that has any direct or indirect
affiliation or association with any FINRA member, within the twelve
months prior to the Execution Date. None of the net proceeds of the
Offering will be paid by the Company to any participating FINRA
member or its affiliates, except as specifically authorized
herein.
(t) Investment Company. The Company
is not, and is not an Affiliate of, and immediately after receipt
of payment for the Securities will not be or be an Affiliate of, an
“investment company” within the meaning of the
Investment Company Act of 1940, as amended. The Company shall
conduct its business in a manner so that it will not become an
“investment company” subject to registration under the
Investment Company Act of 1940, as amended.
(u) Registration Rights. No Person
has any right to cause the Company or any Subsidiary to effect the
registration under the Securities Act of any securities of the
Company or any Subsidiary.
(v) Listing and Maintenance
Requirements. The Common Stock is registered pursuant to
Section 12(g) of the Exchange Act, and the Company has taken no
action designed to, or which to its knowledge is likely to have the
effect of, terminating the registration of the Common Stock under
the Exchange Act nor has the Company received any notification that
the Commission is contemplating terminating such registration. The
Company has not, in the 12 months preceding the date hereof,
received notice from any Trading Market on which the Common Stock
is or has been listed or quoted to the effect that the Company is
not in compliance with the listing or maintenance requirements of
such Trading Market. The Company is, and has no reason to believe
that it will not in the foreseeable future continue to be, in
compliance with all such listing and maintenance requirements. The
Common Stock is currently eligible for electronic transfer through
the Depository Trust Company or another established clearing
corporation and the Company is current in payment of the fees of
the Depository Trust Company (or such other established clearing
corporation) in connection with such electronic
transfer.
(w) Application of Takeover
Protections. The Company and the Board of Directors have
taken all necessary action, if any, in order to render inapplicable
any control share acquisition, business combination, poison pill
(including any distribution under a rights agreement) or other
similar anti-takeover provision under the Company’s
certificate of incorporation (or similar charter documents) or the
laws of its state of incorporation that is or could become
applicable as a result of the Underwriters and the Company
fulfilling their obligations or exercising their rights under the
Transaction Documents.
(x) Disclosure; 10b-5. The
Registration Statement (and any further documents to be filed with
the Commission) contains all exhibits and schedules as required by
the Securities Act. Each of the Registration Statement and any
post-effective amendment thereto, if any, at the time it became
effective, complied in all material respects with the Securities
Act and the Exchange Act and the applicable rules and regulations
under the Securities Act and did not and, as amended or
supplemented, if applicable, 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 Preliminary Prospectus, Prospectus and the
Prospectus Supplement, each as of its respective date, comply in
all material respects with the Securities Act and the Exchange Act
and the applicable rules and regulations. Each Preliminary
Prospectus and the Prospectus, as amended or supplemented, did not
and will not contain as of the date thereof any untrue statement of
a material fact or omit to state a material fact necessary in order
to make the statements therein, in light of the circumstances under
which they were made, not misleading. The SEC Reports, when they
were filed with the Commission, conformed in all material respects
to the requirements of the Exchange Act and the applicable rules
and regulations, and none of such documents, when they were filed
with the Commission, contained any untrue statement of a material
fact or omitted to state a material fact necessary to make the
statements therein (with respect to the SEC Reports incorporated by
reference in the Preliminary Prospectus or Prospectus), in light of
the circumstances under which they were made not misleading; and
any further documents so filed and incorporated by reference in the
Preliminary Prospectus or Prospectus, when such documents are filed
with the Commission, will conform in all material respects to the
requirements of the Exchange Act and the applicable rules and
regulations, as applicable, and will not contain any untrue
statement of a material fact or omit to state a material fact
necessary to make the statements therein, in light of the
circumstances under which they were made not misleading. No
post-effective amendment to the Registration Statement reflecting
any facts or events arising after the date thereof which represent,
individually or in the aggregate, a fundamental change in the
information set forth therein is required to be filed with the
Commission. There are no documents required to be filed with the
Commission in connection with the transaction contemplated hereby
that (x) have not been filed as required pursuant to the Securities
Act or (y) will not be filed within the requisite time period.
There are no contracts or other documents required to be described
in the Preliminary Prospectus or Prospectus, or to be filed as
exhibits or schedules to the Registration Statement, which have not
been described or filed as required. The press releases
disseminated by the Company during the twelve months preceding the
date of this Agreement taken as a whole do not contain any untrue
statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they
were made and when made, not misleading.
(y) No Integrated Offering. Neither
the Company, nor any of its Affiliates, nor any Person acting on
its or their behalf has, directly or indirectly, made any offers or
sales of any security or solicited any offers to buy any security,
under circumstances that would cause this offering of the
Securities to be integrated with prior offerings by the Company for
purposes of any applicable shareholder approval provisions of any
Trading Market on which any of the securities of the Company are
listed or designated.
(z) Solvency. Based on the
consolidated financial condition of the Company as of the Closing
Date, after giving effect to the receipt by the Company of the
proceeds from the sale of the Securities hereunder, (i) the fair
saleable value of the Company’s assets exceeds the amount
that will be required to be paid on or in respect of the
Company’s existing debts and other liabilities (including
known contingent liabilities) as they mature, (ii) the
Company’s assets do not constitute unreasonably small capital
to carry on its business as now conducted and as proposed to be
conducted including its capital needs taking into account the
particular capital requirements of the business conducted by the
Company, consolidated and projected capital requirements and
capital availability thereof, and (iii) the current cash flow of
the Company, together with the proceeds the Company would receive,
were it to liquidate all of its assets, after taking into account
all anticipated uses of the cash, would be sufficient to pay all
amounts on or in respect of its liabilities when such amounts are
required to be paid. The Company does not intend to incur debts
beyond its ability to pay such debts as they mature (taking into
account the timing and amounts of cash to be payable on or in
respect of its debt). The Company has no knowledge of any facts or
circumstances which lead it to believe that it will file for
reorganization or liquidation under the bankruptcy or
reorganization laws of any jurisdiction within one year from the
Closing Date. The SEC Reports sets forth as of the date hereof all
outstanding secured and unsecured Indebtedness of the Company or
any Subsidiary, or for which the Company or any Subsidiary has
commitments. Neither the Company nor any Subsidiary is in default
with respect to any Indebtedness.
(aa) Tax
Status. Except for matters that would not, individually or
in the aggregate, have or reasonably be expected to result in a
Material Adverse Effect, the Company and its Subsidiaries each (i)
has made or filed all United States federal, state and local income
and all foreign income and franchise tax returns, reports and
declarations required by any jurisdiction to which it is subject,
(ii) has paid all taxes and other governmental assessments and
charges that are material in amount, shown or determined to be due
on such returns, reports and declarations and (iii) has set aside
on its books provision reasonably adequate for the payment of all
material taxes for periods subsequent to the periods to which such
returns, reports or declarations apply. There are no unpaid taxes
in any material amount claimed to be due by the taxing authority of
any jurisdiction, and the officers of the Company or of any
Subsidiary know of no basis for any such claim. The provisions for
taxes payable, if any, shown on the financial statements filed with
or as part of the Registration Statement are sufficient for all
accrued and unpaid taxes, whether or not disputed, and for all
periods to and including the dates of such consolidated financial
statements. The term “taxes” mean all federal, state,
local, foreign, and other net income, gross income, gross receipts,
sales, use, ad valorem, transfer, franchise, profits, license,
lease, service, service use, withholding, payroll, employment,
excise, severance, stamp, occupation, premium, property, windfall
profits, customs, duties or other taxes, fees, assessments, or
charges of any kind whatsoever, together with any interest and any
penalties, additions to tax, or additional amounts with respect
thereto. The term “returns” means all returns,
declarations, reports, statements, and other documents required to
be filed in respect to taxes.
(bb) Foreign
Corrupt Practices. Neither the Company nor any Subsidiary,
nor to the knowledge of the Company or any Subsidiary, any agent or
other person acting on behalf of the Company or any Subsidiary, has
(i) directly or indirectly, used any funds for unlawful
contributions, gifts, entertainment or other unlawful expenses
related to foreign or domestic political activity, (ii) made any
unlawful payment to foreign or domestic government officials or
employees or to any foreign or domestic political parties or
campaigns from corporate funds, (iii) failed to disclose fully any
contribution made by the Company or any Subsidiary (or made by any
person acting on its behalf of which the Company is aware) which is
in violation of law, or (iv) violated in any material respect any
provision of FCPA. The Company has taken reasonable steps to ensure
that its accounting controls and procedures are sufficient to cause
the Company to comply in all material respects with the
FCPA.
(cc) Accountants.
To the knowledge and belief of the Company, the Company Auditor (i)
is an independent registered public accounting firm as required by
the Exchange Act and (ii) shall express its opinion with respect to
the financial statements to be included in the Company’s
Annual Report for the fiscal year ending December 31, 2021. The
Company Auditor has not, during the periods covered by the
financial statements included in the Prospectus, provided to the
Company any non-audit services, as such term is used in Section
10A(g) of the Exchange Act.
(dd) FDA.
As to each product subject to the jurisdiction of the U.S. Food and
Drug Administration (“FDA”) under the Federal
Food, Drug and Cosmetic Act, as amended, and the regulations
thereunder (“FDCA”) that is
manufactured, packaged, labeled, tested, distributed, sold, and/or
marketed by the Company or any of its Subsidiaries (each such
product, a “Pharmaceutical Product”),
such Pharmaceutical Product is being manufactured, packaged,
labeled, tested, distributed, sold and/or marketed by the Company
in compliance with all applicable requirements under FDCA and
similar laws, rules and regulations relating to registration,
investigational use, premarket clearance, licensure, or application
approval, good manufacturing practices, good laboratory practices,
good clinical practices, product listing, quotas, labeling,
advertising, record keeping and filing of reports, except where the
failure to be in compliance would not have a Material Adverse
Effect. There is no pending, completed or, to the Company's
knowledge, threatened, action (including any lawsuit, arbitration,
or legal or administrative or regulatory proceeding, charge,
complaint, or investigation) against the Company or any of its
Subsidiaries, and none of the Company or any of its Subsidiaries
has received any notice, warning letter or other communication from
the FDA or any other governmental entity, which (i) contests the
premarket clearance, licensure, registration, or approval of, the
uses of, the distribution of, the manufacturing or packaging of,
the testing of, the sale of, or the labeling and promotion of any
Pharmaceutical Product, (ii) withdraws its approval of, requests
the recall, suspension, or seizure of, or withdraws or orders the
withdrawal of advertising or sales promotional materials relating
to, any Pharmaceutical Product, (iii) imposes a clinical hold on
any clinical investigation by the Company or any of its
Subsidiaries, (iv) enjoins production at any facility of the
Company or any of its Subsidiaries, (v) enters or proposes to enter
into a consent decree of permanent injunction with the Company or
any of its Subsidiaries, or (vi) otherwise alleges any violation of
any laws, rules or regulations by the Company or any of its
Subsidiaries, and which, either individually or in the aggregate,
would have a Material Adverse Effect. The properties, business and
operations of the Company have been and are being conducted in all
material respects in accordance with all applicable laws, rules and
regulations of the FDA. The Company has not been informed by
the FDA that the FDA will prohibit the marketing, sale, license or
use in the United States of any product proposed to be developed,
produced or marketed by the Company nor has the FDA expressed any
concern as to approving or clearing for marketing any product being
developed or proposed to be developed by the Company.
(ee) Stock
Option Plans. Each stock option granted by the Company under
the Company’s stock option plan was granted (i) in accordance
with the terms of the Company’s stock option plan and (ii)
with an exercise price at least equal to the fair market value of
the Common Stock on the date such stock option would be considered
granted under GAAP and applicable law. No stock option granted
under the Company’s stock option plan has been backdated. The
Company has not knowingly granted, and there is no and has been no
Company policy or practice to knowingly grant, stock options prior
to, or otherwise knowingly coordinate the grant of stock options
with, the release or other public announcement of material
information regarding the Company or its Subsidiaries or their
financial results or prospects.
(ff) Office
of Foreign Assets Control. Neither the Company nor any
Subsidiary nor, to the Company's knowledge, any director, officer,
agent, employee or affiliate of the Company or any Subsidiary is
currently subject to any U.S. sanctions administered by the Office
of Foreign Assets Control of the U.S. Treasury
Department.
(gg) U.S.
Real Property Holding Corporation. The Company is not and
has never been a U.S. real property holding corporation within the
meaning of Section 897 of the Internal Revenue Code of 1986, as
amended, and the Company shall so certify upon the
Representative’s request.
(hh) Bank
Holding Company Act. Neither the Company nor any of its
Subsidiaries or Affiliates is subject to the Bank Holding Company
Act of 1956, as amended (the “BHCA”) and to regulation
by the Board of Governors of the Federal Reserve System (the
“Federal
Reserve”). Neither the Company nor any of its
Subsidiaries or Affiliates owns or controls, directly or
indirectly, five percent (5%) or more of the outstanding shares of
any class of voting securities or twenty-five percent (25%) or more
of the total equity of a bank or any entity that is subject to the
BHCA and to regulation by the Federal Reserve. Neither the Company
nor any of its Subsidiaries or Affiliates exercises a controlling
influence over the management or policies of a bank or any entity
that is subject to the BHCA and to regulation by the Federal
Reserve.
(ii) Money
Laundering. The operations of the Company and its
Subsidiaries are and have been conducted at all times in compliance
with applicable financial record-keeping and reporting requirements
of the Currency and Foreign Transactions Reporting Act of 1970, as
amended, applicable money laundering statutes and applicable rules
and regulations thereunder (collectively, the “Money Laundering Laws”),
and no Action or Proceeding by or before any court or governmental
agency, authority or body or any arbitrator involving the Company
or any Subsidiary with respect to the Money Laundering Laws is
pending or, to the knowledge of the Company or any Subsidiary,
threatened.
(jj) D&O
Questionnaires. To the Company’s knowledge, all
information contained in the questionnaires completed by each of
the Company’s directors and officers immediately prior to the
Offering and in the Lock-Up Agreement provided to the Underwriters
is true and correct in all respects and the Company has not become
aware of any information which would cause the information
disclosed in such questionnaires become inaccurate and
incorrect.
(kk) FINRA
Affiliation. To the Company’s knowledge, no officer,
director or any beneficial owner of 5% or more of the
Company’s unregistered securities has any direct or indirect
affiliation or association with any FINRA member (as determined in
accordance with the rules and regulations of FINRA) that is
participating in the Offering. The Company will advise the
Representative and SHLLP if it learns that any officer,
director or owner of 5% or more of the Company’s outstanding
shares of Common Stock or Common Stock Equivalents is or becomes an
affiliate or associated person of a FINRA member firm.
(ll) Officers’
Certificate. Any certificate signed by any duly authorized
officer of the Company and delivered to the Representative or SHLLP
shall be deemed a representation and warranty by the Company to the
Underwriters as to the matters covered thereby.
(mm) Board
of Directors. The Board of Directors is comprised of the
persons set forth under the heading of the Prospectus captioned
“Management.” The qualifications of the persons serving
as board members and the overall composition of the Board of
Directors comply with the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002 and the rules
promulgated thereunder applicable to the Company and the rules of
the Trading Market. At least one member of the Board of Directors
qualifies as a “financial expert” as such term is
defined under the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002 and the rules
promulgated thereunder and the rules of the Trading Market. In
addition, at least a majority of the persons serving on the Board
of Directors qualify as “independent” as defined under
the rules of the Trading Market.
(nn) Environmental
Laws. The
Company and its Subsidiaries (i) are in compliance with all
federal, state, local and foreign laws relating to pollution or
protection of human health or the environment (including ambient
air, surface water, groundwater, land surface or subsurface
strata), including laws relating to emissions, discharges, releases
or threatened releases of chemicals, pollutants, contaminants, or
toxic or hazardous substances or wastes (collectively,
“Hazardous
Materials”) into the environment, or otherwise
relating to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling of Hazardous
Materials, as well as all authorizations, codes, decrees, demands,
or demand letters, injunctions, judgments, licenses, notices or
notice letters, orders, permits, plans or regulations, issued,
entered, promulgated or approved thereunder (“Environmental Laws”);
(ii) have received all permits licenses or other approvals required
of them under applicable Environmental Laws to conduct their
respective businesses; and (iii) are in compliance with all terms
and conditions of any such permit, license or approval where in
each clause (i), (ii) and (iii), the failure to so comply could be
reasonably expected to have, individually or in the aggregate, a
Material Adverse Effect.
ARTICLE IV.
OTHER AGREEMENTS OF THE PARTIES
4.1 Amendments to Registration
Statement. The Company has delivered, or will as promptly as
practicable deliver, to the Underwriters complete conformed copies
of the Registration Statement and of each consent and certificate
of experts, as applicable, filed as a part thereof, and conformed
copies of the Registration Statement (without exhibits), the
Prospectus and the Prospectus Supplement, as amended or
supplemented, in such quantities and at such places as an
Underwriter reasonably requests. Neither the Company nor any of its
directors and officers has distributed and none of them will
distribute, prior to the Closing Date, any offering material in
connection with the offering and sale of the Securities other than
the Prospectus, the Prospectus Supplement, the Registration
Statement, and copies of the documents incorporated by reference
therein. The Company shall not file any such amendment or
supplement to which the Representative shall reasonably object in
writing.
4.2 Federal Securities
Laws.
(a) Compliance. During the time
when a Prospectus is required to be delivered under the Securities
Act, the Company will use its best efforts to comply with all
requirements imposed upon it by the Securities Act and the rules
and regulations thereunder and the Exchange Act and the rules and
regulations thereunder, as from time to time in force, so far as
necessary to permit the continuance of sales of or dealings in the
Securities in accordance with the provisions hereof and the
Prospectus. If at any time when a Prospectus relating to the
Securities is required to be delivered under the Securities Act,
any event shall have occurred as a result of which, in the opinion
of counsel for the Company or counsel for the Underwriters, the
Prospectus, as then amended or supplemented, includes an untrue
statement of a material fact or omits to state any material fact
required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made,
not misleading, or if it is necessary at any time to amend the
Prospectus to comply with the Securities Act, the Company will
notify the Underwriters promptly and prepare and file with the
Commission, subject to Section 4.1 hereof, an appropriate amendment
or supplement in accordance with Section 10 of the Securities
Act.
(b) Filing of Final Prospectus
Supplement. The Company will file the Prospectus Supplement
(in form and substance satisfactory to the Representative) with the
Commission pursuant to the requirements of Rule 424.
(c) Exchange Act Registration. For
a period of three years from the Execution Date, the Company will
use its best efforts to maintain the registration of the Common
Stock and Warrants under the Exchange Act. The Company will not
deregister the Common Stock or the Warrants under the Exchange Act
without the prior written consent of the
Representative.
(d) Free Writing Prospectuses. The
Company represents and agrees that it has not made and will not
make any offer relating to the Securities that would constitute an
issuer free writing prospectus, as defined in Rule 433 of the rules
and regulations under the Securities Act, without the prior written
consent of the Representative. Any such free writing prospectus
consented to by the Representative is herein referred to as a
“Permitted Free Writing
Prospectus.” The Company represents that it will treat
each Permitted Free Writing Prospectus as an “issuer free
writing prospectus” as defined in rule and regulations under
the Securities Act, and has complied and will comply with the
applicable requirements of Rule 433 of the Securities Act,
including timely Commission filing where required, legending and
record keeping.
4.3 Delivery to the Underwriters of
Prospectuses. The Company will deliver to the Underwriters,
without charge, from time to time during the period when the
Prospectus is required to be delivered under the Securities Act or
the Exchange Act such number of copies of each Prospectus as the
Underwriters may reasonably request and, as soon as the
Registration Statement or any amendment or supplement thereto
becomes effective, deliver to you two original executed
Registration Statements, including exhibits, and all post-effective
amendments thereto and copies of all exhibits filed therewith or
incorporated therein by reference and all original executed
consents of certified experts.
4.4 Effectiveness and Events Requiring
Notice to the Underwriters. The Company will use its best
efforts to cause the Registration Statement to remain effective
with a current prospectus until the later of nine (9) months from
the Execution Date and the date on which the Warrants are no longer
outstanding, and will notify the Underwriters and holders of the
Warrants immediately and confirm the notice in writing: (i) of
the effectiveness of the Registration Statement and any amendment
thereto; (ii) of the issuance by the Commission of any stop
order or of the initiation, or the threatening, of any proceeding
for that purpose; (iii) of the issuance by any state
securities commission of any proceedings for the suspension of the
qualification of the Securities for offering or sale in any
jurisdiction or of the initiation, or the threatening, of any
proceeding for that purpose; (iv) of the mailing and delivery
to the Commission for filing of any amendment or supplement to the
Registration Statement or Prospectus; (v) of the receipt of
any comments or request for any additional information from the
Commission; and (vi) of the happening of any event during the
period described in this Section 4.4 that, in the judgment of the
Company, makes any statement of a material fact made in the
Registration Statement or the Prospectus untrue or that requires
the making of any changes in the Registration Statement or the
Prospectus in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. If the
Commission or any state securities commission shall enter a stop
order or suspend such qualification at any time, the Company will
make every reasonable effort to obtain promptly the lifting of such
order.
4.5 Review of Financial Statements.
For a period of five (5) years from the Execution Date, the
Company, at its expense, shall cause its regularly engaged
independent registered public accountants to review (but not audit)
the Company’s financial statements for each of the first
three fiscal quarters prior to the announcement of quarterly
financial information.
4.6 Reports to the Underwriters Expenses
of the Offering.
(a) Periodic Reports, etc. For a
period of three years from the Execution Date, the Company will
furnish to the Underwriters copies of such financial statements and
other periodic and special reports as the Company from time to time
furnishes generally to holders of any class of its securities and
also promptly furnish to the Underwriters: (i) a copy of each
periodic report the Company shall be required to file with the
Commission; (ii) a copy of every press release and every news item
and article with respect to the Company or its affairs which was
released by the Company; (iii) a copy of each Form 8-K prepared and
filed by the Company; (iv) a copy of each registration statement
filed by the Company under the Securities Act; (v) such additional
documents and information with respect to the Company and the
affairs of any future Subsidiaries of the Company as the
Representative may from time to time reasonably request; provided
that the Underwriters shall each sign, if requested by the Company,
a Regulation FD compliant confidentiality agreement which is
reasonably acceptable to the Representative in connection with such
Underwriter’s receipt of such information. Documents filed
with the Commission pursuant to its ▇▇▇▇▇ system shall be deemed to
have been delivered to the Underwriters pursuant to this
Section.
(b) Transfer Sheets. For a period
of three (3) years from the Execution Date, the Company shall
retain the Transfer Agent or a transfer and registrar agent
acceptable to the Representative and will furnish to the
Underwriters at the Company’s sole cost and expense such
transfer sheets of the Company’s securities as an Underwriter
may reasonably request, including the daily and monthly
consolidated transfer sheets of the Transfer Agent and the
DTC.
(c) Trading Reports. During such
time as the Closing Shares, Option Shares and Warrant Shares are
listed on the Trading Market, the Company shall provide to the
Underwriters, at the Company’s expense, such reports
published by the Trading Market relating to price and trading of
such shares, as the Underwriters shall reasonably
request.
(d) General Expenses Related to the
Offering. The Company hereby agrees to pay on each of the
Closing Date and each Option Closing Date, if any, to the extent
not paid at the Closing Date, all expenses incident to the
performance of the obligations of the Company under this Agreement,
including, but not limited to: (a) all filing fees and
communication expenses relating to the registration of the
Securities to be sold in the Offering (including the Option
Securities) with the Commission; (b) all FINRA Public Offering
Filing System fees associated with the review of the Offering by
FINRA; all fees and expenses relating to the listing of such
Closing Shares, Option Shares and Warrant Shares on the Trading
Market and such other stock exchanges as the Company and the
Representative together determine; (c) all fees, expenses and
disbursements relating to the registration or qualification of such
Securities under the “blue sky” securities laws of such
states and other foreign jurisdictions as the Representative may
reasonably designate (including, without limitation, all filing and
registration fees, and the fees and expenses of Blue Sky counsel,
it being agreed that the Company will make a payment of $25,000 to
such counsel on the Closing Date);); (d) the costs of all mailing
and printing of the underwriting documents (including, without
limitation, the Underwriting Agreement, any Blue Sky Surveys and,
if appropriate, any Agreement Among Underwriters, Selected
Dealers’ Agreement, Underwriters’ Questionnaire and
Power of Attorney), Registration Statements, Prospectuses and all
amendments, supplements and exhibits thereto and as many
preliminary and final Prospectuses as the Representative may
reasonably deem necessary; (e) the costs and expenses of the
Company’s public relations firm; (f) the costs of preparing,
printing and delivering the Securities; (g) fees and expenses of
the Transfer Agent for the Securities (including, without
limitation, any fees required for same-day processing of any
instruction letter delivered by the Company); (h) stock transfer
and/or stamp taxes, if any, payable upon the transfer of securities
from the Company to the Underwriters; (i) the fees and expenses of
the Company’s accountants; (j) the fees and expenses of the
Company’s legal counsel and other agents and representatives;
(k) the Underwriters’ costs of mailing prospectuses to
prospective investors; (l) the costs associated with advertising
the Offering in the national editions of the Wall Street Journal
and New York Times after the Closing Date; (m) the fees and
expenses of SHLLP; (n) all fees,
expenses and disbursements relating to background checks of the
Company’s officers and directors in an amount not to exceed
$5,000 per individual;(o) the
cost for the
Underwriters’ use of i-Deal’s book-building, prospectus
tracking and compliance software (or other similar software) for
the Offering; and (p) the
Underwriters’ actual “road show” expenses for the
Offering; provided that the
Company’s obligation to reimburse the Underwriters for their
reimbursable fees and expenses shall be limited in the aggregate to
$125,000 (less the $10,000 advanced by the Company to the
Underwriters to date).
The Underwriters may
also deduct from the net proceeds of the Offering payable to the
Company on the Closing Date, or each Option Closing Date, if any,
the expenses set forth herein to be paid by the Company to the
Underwriters.
4.7 Application of Net Proceeds.
The Company will apply the net proceeds from the Offering received
by it in a manner consistent with the application described under
the caption “Use of Proceeds” in the
Prospectus.
4.8 Delivery of Earnings Statements to
Security Holders. The Company will make generally available
to its security holders as soon as practicable, but not later than
the first day of the fifteenth full calendar month following the
Execution Date, an earnings statement (which need not be certified
by independent public or independent certified public accountants
unless required by the Securities Act or the Rules and Regulations
under the Securities Act, but which shall satisfy the provisions of
Rule 158(a) under Section 11(a) of the Securities Act) covering a
period of at least twelve consecutive months beginning after the
Execution Date.
4.9 Stabilization. Neither the
Company, nor, to its knowledge, any of its employees, directors or
shareholders (without the consent of the Representative) has taken
or will take, directly or indirectly, any action designed to or
that has constituted or that might reasonably be expected to cause
or result in, under the Exchange Act, or otherwise, stabilization
or manipulation of the price of any security of the Company to
facilitate the sale or resale of the Securities.
4.10 Internal
Controls. The Company will maintain a system of internal
accounting controls sufficient to provide reasonable assurances
that: (i) transactions are executed in accordance with
management’s general or specific authorization;
(ii) transactions are recorded as necessary in order to permit
preparation of financial statements in accordance with GAAP and to
maintain accountability for assets; (iii) access to assets is
permitted only in accordance with management’s general or
specific authorization; and (iv) the recorded accountability
for assets is compared with existing assets at reasonable intervals
and appropriate action is taken with respect to any
differences.
4.11 Accountants.
The Company shall continue to retain a nationally recognized
independent certified public accounting firm for a period of at
least three years after the Execution Date. The Underwriters
acknowledge that the Company Auditor is acceptable to the
Underwriters.
4.12 FINRA.
The Company shall advise the Underwriters (who shall make an
appropriate filing with FINRA) if it is aware that any 5% or
greater shareholder of the Company becomes an affiliate or
associated person of an Underwriter.
4.13 No
Fiduciary Duties. The Company acknowledges and agrees that
the Underwriters’ responsibility to the Company is solely
contractual and commercial in nature, based on arms-length
negotiations and that neither the Underwriters nor their affiliates
or any selected dealer shall be deemed to be acting in a fiduciary
capacity, or otherwise owes any fiduciary duty to the Company or
any of its affiliates in connection with the Offering and the other
transactions contemplated by this Agreement. Notwithstanding anything in this Agreement to the
contrary, the Company acknowledges that the Underwriters may have
financial interests in the success of the Offering that are not
limited to the difference between the price to the public and the
purchase price paid to the Company by the Underwriters for the
shares and the Underwriters have no obligation to disclose, or
account to the Company for, any of such additional financial
interests. 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 fiduciary duty.
4.14 Warrant
Shares. If all or any portion of a Warrant is exercised at a
time when there is an effective registration statement to cover the
issuance of the Warrant Shares or if the Warrant is exercised via
cashless exercise, the Warrant Shares issued pursuant to any such
exercise shall be issued free of all restrictive legends. If at any
time following the date hereof the Registration Statement (or any
subsequent registration statement registering the sale or resale of
the Warrant Shares) is not effective or is not otherwise available
for the sale of the Warrant Shares, the Company shall immediately
notify the holders of the Warrants in writing that such
registration statement is not then effective and thereafter shall
promptly notify such holders when the registration statement is
effective again and available for the sale of the Warrant Shares
(it being understood and agreed that the foregoing shall not limit
the ability of the Company to issue, or any holder thereof to sell,
any of the Warrant Shares in compliance with applicable federal and
state securities laws).
4.15 Board
Composition and Board Designations. The Company shall ensure
that: (i) the qualifications of the persons serving as board
members and the overall composition of the Board of Directors
comply with the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002 and the rules
promulgated thereunder and with the listing requirements of the
Trading Market and (ii) if applicable, at least one member of
the Board of Directors qualifies as a “financial
expert” as such term is defined under the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act
of 2002 and the rules promulgated thereunder.
4.16 Securities
Laws Disclosure; Publicity. At the request of the
Representative, by 8:00 a.m. (New York City time) on the date
hereof, the Company shall issue a press release disclosing the
material terms of the Offering. The Company and the Representative
shall consult with each other in issuing any other press releases
with respect to the Offering, and neither the Company nor any
Underwriter shall issue any such press release nor otherwise make
any such public statement without the prior consent of the Company,
with respect to any press release of such Underwriter, or without
the prior consent of such Underwriter, with respect to any press
release of the Company, which consent shall not unreasonably be
withheld or delayed, except if such disclosure is required by law,
in which case the disclosing party shall promptly provide the other
party with prior notice of such public statement or communication.
The Company will not issue press releases or engage in any other
publicity, without the Representative’s prior written
consent, for a period ending at 5:00 p.m. (New York City time) on
the first business day following the 45th day following the Closing
Date, other than normal and customary releases issued in the
ordinary course of the Company’s business.
4.17 Shareholder
Rights Plan. No claim will be made or enforced by the
Company or, with the consent of the Company, any other Person, that
any Underwriter of the Securities is an “Acquiring
Person” under any control share acquisition, business
combination, poison pill (including any distribution under a rights
agreement) or similar anti-takeover plan or arrangement in effect
or hereafter adopted by the Company, or that any Underwriter of
Securities could be deemed to trigger the provisions of any such
plan or arrangement, by virtue of receiving
Securities.
4.18 Reservation
of Common Stock. As of the date hereof, the Company has
reserved and the Company shall continue to reserve and keep
available at all times, free of preemptive rights, a sufficient
number of shares of Common Stock for the purpose of enabling the
Company to issue Option Shares pursuant to the Over-Allotment
Option and Warrant Shares pursuant to any exercise of the
Warrants.
4.19 Listing
of Common Stock. The Company hereby agrees to use best
efforts to maintain the listing or quotation of the Common Stock on
the Trading Market on which it is currently listed, and
concurrently with the Closing, the Company shall apply to list or
quote all of the Closing Shares, Option Shares and Warrant Shares
on the Nasdaq Capital Market and promptly secure the listing of all
of the Closing Shares, Option Shares and Warrant Shares on such
Trading Market. The Company further agrees, if the Company applies
to have the Common Stock traded on any other Trading Market, it
will then include in such application all of the Closing Shares,
Option Shares and Warrant Shares, and will take such other action
as is necessary to cause all of the Closing Shares, Option Shares
and Warrant Shares to be listed or quoted on such other Trading
Market as promptly as possible. The Company will then take all
action reasonably necessary to continue the listing and trading of
its Common Stock on a Trading Market and will comply in all
respects with the Company’s reporting, filing and other
obligations under the bylaws or rules of the Trading Market. The
Company agrees to maintain the eligibility of the Common Stock for
electronic transfer through the Depository Trust Company or another
established clearing corporation, including, without limitation, by
timely payment of fees to the Depository Trust Company or such
other established clearing corporation in connection with such
electronic transfer.
4.20 Subsequent
Equity Sales.
(a) From the date
hereof until __________2022 [twelve
months from the execution date], neither the Company nor any
Subsidiary shall issue, enter into any agreement to issue or
announce the issuance or proposed issuance of any shares of Common
Stock or Common Stock Equivalents.
(b) From the date
hereof until _______, the Company shall be
prohibited from effecting or entering into an agreement to effect
any issuance by the Company or any of its Subsidiaries of Common
Stock or Common Stock Equivalents (or a combination of units
thereof) involving a Variable Rate Transaction. “Variable Rate
Transaction” means a transaction in which the Company
(i) issues or sells any debt or equity securities that are
convertible into, exchangeable or exercisable for, or include the
right to receive, additional shares of Common Stock either (A) at a
conversion price, exercise price or exchange rate or other price
that is based upon, and/or varies with, the trading prices of or
quotations for the shares of Common Stock at any time after the
initial issuance of such debt or equity securities or (B) with a
conversion, exercise or exchange price that is subject to being
reset at some future date after the initial issuance of such debt
or equity security or upon the occurrence of specified or
contingent events directly or indirectly related to the business of
the Company or the market for the Common Stock or (ii) enters into,
or effects a transaction under, any agreement, including, but not
limited to, an equity line of credit, whereby the Company may issue
securities at a future determined price. Any Underwriter shall be
entitled to obtain injunctive relief against the Company to
preclude any such issuance, which remedy shall be in addition to
any right to collect damages.
(c) Notwithstanding the
foregoing, this Section 4.21 shall not apply in respect of an
Exempt Issuance, except that no Variable Rate Transaction shall be
an Exempt Issuance.
4.21 Capital
Changes. Until _________________[twelve months from the
execution date], the Company shall not undertake a reverse or
forward stock split or reclassification of the Common Stock without
the prior written consent of the Representative.
4.22 Secondary
Market Trading and Standard & Poor’s. The Company
will apply to be included in Standard & Poor’s Daily News
and Corporation Records Corporate Descriptions for a period of five
(5) years immediately after the Execution Date.
4.23 Financial
Public Relations Firm. As of the Execution Date, the Company
shall have retained a financial public relations firm reasonably
acceptable to the Representative and the Company, which shall
initially be Barwicki Investor Relations, which firm will be
experienced in assisting issuers in public offerings of securities
and in their relations with their security holders, and shall
retain such firm or another firm reasonably acceptable to the
Representative for a period of not less than two (2) years after
the Execution Date.
4.24 Research
Independence. The Company
acknowledges that each Underwriter’s research analysts and
research departments, if any, are required to be independent from
their respective investment banking divisions and are subject to
certain regulations and internal policies, and that such
Underwriter’s research analysts may hold and make statements
or investment recommendations and/or publish research reports with
respect to the Company and/or the offering that differ from the
views of its investment bankers. The Company hereby waives and
releases, to the fullest extent permitted by law, any claims that
the Company may have against such Underwriter with respect to any
conflict of interest that may arise from the fact that the views
expressed by their independent research analysts and research
departments may be different from or inconsistent with the views or
advice communicated to the Company by such Underwriter’s
investment banking divisions. The Company acknowledges that the
Representative is a full service securities firm and as such from
time to time, subject to applicable securities laws, may effect
transactions for its own account or the account of its customers
and hold long or short position in debt or equity securities of the
Company.
ARTICLE
V.
DEFAULT BY UNDERWRITERS
If on
the Closing Date or any Option Closing Date, if any, any
Underwriter shall fail to purchase and pay for the portion of the
Closing Securities or Option Securities, as the case may be, which
such Underwriter has agreed to purchase and pay for on such date
(otherwise than by reason of any default on the part of the
Company), the Representative, or if the Representative is the
defaulting Underwriter, the non-defaulting Underwriters, shall use
their reasonable efforts to procure within 36 hours thereafter one
or more of the other Underwriters, or any others, to purchase from
the Company such amounts as may be agreed upon and upon the terms
set forth herein, the Closing Securities or Option Securities , as
the case may be, which the defaulting Underwriter or Underwriters
failed to purchase. If during such 36 hours the Representative
shall not have procured such other Underwriters, or any others, to
purchase the Closing Securities or Option Securities, as the case
may be, agreed to be purchased by the defaulting Underwriter or
Underwriters, then (a) if the aggregate number of Closing
Securities or Option Securities, as the case may be, with respect
to which such default shall occur does not exceed 10% of the
Closing Securities or Option Securities, as the case may be,
covered hereby, the other Underwriters shall be obligated,
severally, in proportion to the respective numbers of Closing
Securities or Option Securities, as the case may be, which they are
obligated to purchase hereunder, to purchase the Closing Securities
or Option Securities, as the case may be, which such defaulting
Underwriter or Underwriters failed to purchase, or (b) if the
aggregate number of Closing Securities or Option Securities, as the
case may be, with respect to which such default shall occur exceeds
10% of the Closing Securities or Option Securities, as the case may
be, covered hereby, the Company or the Representative will have the
right to terminate this Agreement without liability on the part of
the non-defaulting Underwriters or of the Company except to the
extent provided in Article VI hereof. In the event of a default by
any Underwriter or Underwriters, as set forth in this Article V,
the applicable Closing Date may be postponed for such period, not
exceeding seven days, as the Representative, or if the
Representative is the defaulting Underwriter, the non-defaulting
Underwriters, may determine in order that the required changes in
the Prospectus or in any other documents or arrangements may be
effected. The term “Underwriter” includes any Person
substituted for a defaulting Underwriter. Any action taken under
this Section shall not relieve any defaulting Underwriter from
liability in respect of any default of such Underwriter under this
Agreement.
ARTICLE VI.
INDEMNIFICATION
6.1 Indemnification of the
Underwriters. Subject to the conditions set forth below, the
Company agrees to indemnify and hold harmless the Underwriters, and
each dealer selected by each Underwriter that participates in the
offer and sale of the Securities (each a “Selected Dealer”) and
each of their respective directors, officers and employees and each
Person, if any, who controls such Underwriter or any Selected
Dealer (“Controlling
Person”) within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act, against any and
all loss, liability, claim, damage and expense whatsoever
(including but not limited to any and all documented legal or other
expenses reasonably incurred in investigating, preparing or
defending against any litigation, commenced or threatened, or any
claim whatsoever, whether arising out of any action between such
Underwriter and the Company or between such Underwriter and any
third party or otherwise) to which they or any of them may become
subject under the Securities Act, the Exchange Act or any other
statute or at common law or otherwise or under the laws of foreign
countries, arising out of or based upon any untrue statement or
alleged untrue statement of a material fact contained in (i) any
Preliminary Prospectus, if any, the Registration Statement or the
Prospectus (as from time to time each may be amended and
supplemented); (ii) any materials or information provided to
investors by, or with the approval of, the Company in connection
with the marketing of the offering of the Securities, including any
“road show” or investor presentations made to investors
by the Company (whether in person or electronically); or (iii) any
application or other document or written communication (in this
Article VI, collectively called “application”) executed by
the Company or based upon written information furnished by the
Company in any jurisdiction in order to qualify the Securities
under the securities laws thereof or filed with the Commission, any
state securities commission or agency, Trading Market or any
securities exchange; or the omission or alleged omission therefrom
of a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under
which they were made, not misleading, unless such statement or
omission was made in reliance upon and in conformity with written
information furnished to the Company with respect to the applicable
Underwriter by or on behalf of such Underwriter expressly for use
in any Preliminary Prospectus, if any, the Registration Statement
or Prospectus, or any amendment or supplement thereto, or in any
application, as the case may be. With respect to any untrue
statement or omission or alleged untrue statement or omission made
in the Preliminary Prospectus, if any, the indemnity agreement
contained in this Section 6.1 shall not inure to the benefit of an
Underwriter to the extent that any loss, liability, claim, damage
or expense of such Underwriter results from the fact that a copy of
the Prospectus was not given or sent to the Person asserting any
such loss, liability, claim or damage at or prior to the written
confirmation of sale of the Securities to such Person as required
by the Securities Act and the rules and regulations thereunder, and
if the untrue statement or omission has been corrected in the
Prospectus, unless such failure to deliver the Prospectus was a
result of non-compliance by the Company with its obligations under
this Agreement. The Company agrees promptly to notify each
Underwriter of the commencement of any litigation or proceedings
against the Company or any of its officers, directors or
Controlling Persons in connection with the issue and sale of the
Public Securities or in connection with the Registration Statement
or Prospectus.
6.2 Procedure. If any action is
brought against an Underwriter, a Selected Dealer or a Controlling
Person in respect of which indemnity may be sought against the
Company pursuant to Section 6.1, such Underwriter, such Selected
Dealer or Controlling Person, as the case may be, shall promptly
notify the Company in writing of the institution of such action and
the Company shall assume the defense of such action, including the
employment and reasonable and documented fees of counsel (subject
to the reasonable approval of such Underwriter or such Selected
Dealer, as the case may be) and payment of actual, reasonable and
documented expenses. Such Underwriter, such Selected Dealer or
Controlling Person 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 Underwriter, such Selected Dealer
or Controlling Person unless (i) the employment of such counsel at
the expense of the Company shall have been authorized in writing by
the Company in connection with the defense of such action, or (ii)
the Company shall not have employed counsel to have charge of the
defense of such action, or (iii) such indemnified party or parties
shall have reasonably concluded that there may be defenses
available to it or them which are different from or additional to
those available to the Company (in which case the Company shall not
have the right to direct the defense of such action on behalf of
the indemnified party or parties), in any of which events the
reasonable fees and expenses of not more than one additional firm
of attorneys selected by such Underwriter (in addition to local
counsel), Selected Dealer and/or Controlling Person shall be borne
by the Company. Notwithstanding anything to the contrary contained
herein, if any Underwriter, Selected Dealer or Controlling Person
shall assume the defense of such action as provided above, the
Company shall have the right to approve the terms of any settlement
of such action which approval shall not be unreasonably
withheld.
6.3 Indemnification of the Company.
Each Underwriter severally and not jointly agrees to indemnify and
hold harmless the Company, its directors, officers and employees
and agents who control the Company within the meaning of Section 15
of the Securities Act or Section 20 of the Exchange Act against any
and all loss, liability, claim, damage and expense described in the
foregoing indemnity from the Company to such Underwriter, as
incurred, but only with respect to untrue statements or omissions,
or alleged untrue statements or omissions made in any Preliminary
Prospectus, if any, the Registration Statement or Prospectus or any
amendment or supplement thereto or in any application, in reliance
upon, and in strict conformity with, written information furnished
to the Company with respect to such Underwriter by or on behalf of
such Underwriter expressly for use in such Preliminary Prospectus,
if any, the Registration Statement or Prospectus or any amendment
or supplement thereto or in any such application. In case any
action shall be brought against the Company or any other Person so
indemnified based on any Preliminary Prospectus, if any, the
Registration Statement or Prospectus or any amendment or supplement
thereto or any application, and in respect of which indemnity may
be sought against such Underwriter, such Underwriter shall have the
rights and duties given to the Company, and the Company and each
other Person so indemnified shall have the rights and duties given
to such Underwriter by the provisions of this Article VI.
Notwithstanding the provisions of this
Section 6.3, no Underwriter shall be required to indemnify the
Company for any amount in excess of the underwriting discounts and
commissions applicable to the Securities purchased by such
Underwriter. The Underwriters' obligations in this Section 6.3 to
indemnify the Company are several in proportion to their respective
underwriting obligations and not joint.
6.4 Contribution.
(a) Contribution Rights. In order
to provide for just and equitable contribution under the Securities
Act in any case in which (i) any Person entitled to indemnification
under this Article VI makes a claim for indemnification pursuant
hereto but it is judicially determined (by the entry of a final
judgment or decree by a court of competent jurisdiction and the
expiration of time to appeal or the denial of the last right of
appeal) that such indemnification may not be enforced in such case
notwithstanding the fact that this Article VI provides for
indemnification in such case, or (ii) contribution under the
Securities Act, the Exchange Act or otherwise may be required on
the part of any such Person in circumstances for which
indemnification is provided under this Article VI, then, and in
each such case, the Company and each Underwriter, severally and not
jointly, shall contribute to the aggregate losses, liabilities,
claims, damages and expenses of the nature contemplated by said
indemnity agreement incurred by the Company and such Underwriter,
as incurred, in such proportions that such Underwriter is
responsible for that portion represented by the percentage that the
underwriting discount appearing on the cover page of the Prospectus
bears to the initial offering price appearing thereon and the
Company is responsible for the balance; provided, that, no Person
guilty of a fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to
contribution from any Person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section, each director,
officer and employee of such Underwriter or the Company, as
applicable, and each Person, if any, who controls such Underwriter
or the Company, as applicable, within the meaning of Section 15 of
the Securities Act shall have the same rights to contribution as
such Underwriter or the Company, as applicable. Notwithstanding the provisions of this Section
6.4, no Underwriter shall be required to contribute any amount in
excess of the underwriting discounts and commissions applicable to
the Securities purchased by such Underwriter. The Underwriters'
obligations in this Section 6.4 to contribute are several in
proportion to their respective underwriting obligations and not
joint.
(b) Contribution Procedure. Within
fifteen days after receipt by any party to this Agreement (or its
representative) of notice of the commencement of any action, suit
or proceeding, such party will, if a claim for contribution in
respect thereof is to be made against another party
(“contributing
party”), notify the contributing party of the
commencement thereof, but the failure to so notify the contributing
party will not relieve it from any liability which it may have to
any other party other than for contribution hereunder. In case any
such action, suit or proceeding is brought against any party, and
such party notifies a contributing party or its representative of
the commencement thereof within the aforesaid fifteen days, the
contributing party will be entitled to participate therein with the
notifying party and any other contributing party similarly
notified. Any such contributing party shall not be liable to any
party seeking contribution on account of any settlement of any
claim, action or proceeding affected by such party seeking
contribution without the written consent of such contributing
party. The contribution provisions contained in this Section 6.4
are intended to supersede, to the extent permitted by law, any
right to contribution under the Securities Act, the Exchange Act or
otherwise available.
ARTICLE VII.
MISCELLANEOUS
7.1 Termination.
(a) Termination Right. The
Representative shall have the right to terminate this Agreement at
any time prior to any Closing Date, (i) if any domestic or
international event or act or occurrence has materially disrupted,
or in its opinion will in the immediate future materially disrupt,
general securities markets in the United States; or (ii) if
trading on any Trading Market shall have been suspended or
materially limited, or minimum or maximum prices for trading shall
have been fixed, or maximum ranges for prices for securities shall
have been required by FINRA or by order of the Commission or any
other government authority having jurisdiction, or (iii) if
the United States shall have become involved in a new war or an
increase in major hostilities, or (iv) if a banking moratorium
has been declared by a New York State or federal authority, or
(v) if a moratorium on foreign exchange trading has been
declared which materially adversely impacts the United States
securities markets, or (vi) if the Company shall have
sustained a material loss by fire, flood, accident, hurricane,
earthquake, theft, sabotage or other calamity or malicious act
which, whether or not such loss shall have been insured, will, in
the Representative’s opinion, make it inadvisable to proceed
with the delivery of the Securities, or (vii) if the Company
is in material breach of any of its representations, warranties or
covenants hereunder, or (viii) if the Representative shall
have become aware after the date hereof of such a material adverse
change in the conditions or prospects of the Company, or such
adverse material change in general market conditions as in the
Representative’s judgment would make it impracticable to
proceed with the offering, sale and/or delivery of the Securities
or to enforce contracts made by the Underwriters for the sale of
the Securities.
(b) Expenses. In the event this
Agreement shall be terminated pursuant to Section 7.1(a), within
the time specified herein or any extensions thereof pursuant to the
terms herein, the Company shall be obligated to pay to the
Representative its actual and accountable out of pocket expenses
related to the transactions contemplated herein then due and
payable, including the fees and disbursements of SHLLP up to
$100,000 (provided,
however, that such
expense cap in no way limits or impairs the indemnification and
contribution provisions of this Agreement).
(c) Indemnification.
Notwithstanding any contrary provision contained in this Agreement,
any election hereunder or any termination of this Agreement, and
whether or not this Agreement is otherwise carried out, the
provisions of Article VI shall not be in any way effected by such
election or termination or failure to carry out the terms of this
Agreement or any part hereof.
7.2 Entire Agreement. The
Transaction Documents, together with the exhibits and schedules
thereto, the Prospectus and the Prospectus Supplement, contain the
entire understanding of the parties with respect to the subject
matter hereof and thereof and supersede all prior agreements and
understandings, oral or written, with respect to such matters,
which the parties acknowledge have been merged into such documents,
exhibits and schedules.
7.3 Notices. Any and all notices or
other communications or deliveries required or permitted to be
provided hereunder shall be in writing and shall be deemed given
and effective on the earliest of: (a) the time of transmission, if
such notice or communication is delivered via facsimile at the
facsimile number or e-mail attachment at the email address set
forth on the signature pages attached hereto at or prior to 5:30
p.m. (New York City time) on a Trading Day, (b) the next Trading
Day after the time of transmission, if such notice or communication
is delivered via facsimile at the facsimile number or e-mail
attachment at the e-mail address as set forth on the signature
pages attached hereto on a day that is not a Trading Day or later
than 5:30 p.m. (New York City time) on any Trading Day, (c) the
second (2nd) Trading Day
following the date of mailing, if sent by U.S. nationally
recognized overnight courier service or (d) upon actual receipt by
the party to whom such notice is required to be given. The address
for such notices and communications shall be as set forth on the
signature pages attached hereto.
7.4 Amendments; Waivers. No
provision of this Agreement may be waived, modified, supplemented
or amended except in a written instrument signed, in the case of an
amendment, by the Company and the Representative. No waiver of any
default with respect to any provision, condition or requirement of
this Agreement shall be deemed to be a continuing waiver in the
future or a waiver of any subsequent default or a waiver of any
other provision, condition or requirement hereof, nor shall any
delay or omission of any party to exercise any right hereunder in
any manner impair the exercise of any such right.
7.5 Headings. The headings herein
are for convenience only, do not constitute a part of this
Agreement and shall not be deemed to limit or affect any of the
provisions hereof.
7.6 Successors and Assigns. This
Agreement shall be binding upon and inure to the benefit of the
parties and their successors and permitted assigns.
7.7 Governing Law. All questions
concerning the construction, validity, enforcement and
interpretation of the Transaction Documents shall be governed by
and construed and enforced in accordance with the internal laws of
the State of New York, without regard to the principles of
conflicts of law thereof. Each party agrees that all legal
Proceedings concerning the interpretations, enforcement and defense
of the transactions contemplated by this Agreement and any other
Transaction Documents (whether brought against a party hereto or
its respective affiliates, directors, officers, shareholders,
partners, members, employees or agents) shall be commenced
exclusively in the state and federal courts sitting in the City of
New York. Each party hereby irrevocably submits to the exclusive
jurisdiction of the state and federal courts sitting in the City of
New York, Borough of Manhattan for the adjudication of any dispute
hereunder or in connection herewith or with any transaction
contemplated hereby or discussed herein (including with respect to
the enforcement of any of the Transaction Documents), and hereby
irrevocably waives, and agrees not to assert in any Action or
Proceeding, any claim that it is not personally subject to the
jurisdiction of any such court, that such Action or Proceeding is
improper or is an inconvenient venue for such Proceeding. Each
party hereby irrevocably waives personal service of process and
consents to process being served in any such Action or Proceeding
by mailing a copy thereof via registered or certified mail or
overnight delivery (with evidence of delivery) to such party at the
address in effect for notices to it under this Agreement and agrees
that such service shall constitute good and sufficient service of
process and notice thereof. Nothing contained herein shall be
deemed to limit in any way any right to serve process in any other
manner permitted by law. If either party shall commence an Action
or Proceeding to enforce any provisions of the Transaction
Documents, then, in addition to the obligations of the Company
under Article VI, the prevailing party in such Action or Proceeding
shall be reimbursed by the other party for its reasonable
attorneys’ fees and other costs and expenses incurred with
the investigation, preparation and prosecution of such Action or
Proceeding.
7.8 Survival. The representations
and warranties contained herein shall survive the Closing and the
Option Closing, if any, and the delivery of the
Securities.
7.9 Execution. This Agreement may
be executed in two or more counterparts, all of which when taken
together shall be considered one and the same agreement and shall
become effective when counterparts have been signed by each party
and delivered to each other party, it being understood that the
parties need not sign the same counterpart. In the event that any
signature is delivered by facsimile transmission or by e-mail
delivery of a “.pdf” format data file, such signature
shall create a valid and binding obligation of the party executing
(or on whose behalf such signature is executed) with the same force
and effect as if such facsimile or “.pdf” signature
page were an original thereof.
7.10 Severability.
If any term, provision, covenant or restriction of this Agreement
is held by a court of competent jurisdiction to be invalid,
illegal, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions set forth herein shall
remain in full force and effect and shall in no way be affected,
impaired or invalidated, and the parties hereto shall use their
commercially reasonable efforts to find and employ an alternative
means to achieve the same or substantially the same result as that
contemplated by such term, provision, covenant or restriction. It
is hereby stipulated and declared to be the intention of the
parties that they would have executed the remaining terms,
provisions, covenants and restrictions without including any of
such that may be hereafter declared invalid, illegal, void or
unenforceable.
7.11 Remedies.
In addition to being entitled to exercise all rights provided
herein or granted by law, including recovery of damages, the
Underwriters and the Company will be entitled to specific
performance under the Transaction Documents. The parties agree that
monetary damages may not be adequate compensation for any loss
incurred by reason of any breach of obligations contained in the
Transaction Documents and hereby agree to waive and not to assert
in any Action for specific performance of any such obligation the
defense that a remedy at law would be adequate.
7.12 Saturdays,
Sundays, Holidays,
etc. If
the last or appointed day for the taking of any action or the
expiration of any right required or granted herein shall not be a
Business Day, then such action may be taken or such right may be
exercised on the next succeeding Business Day.
7.13 Construction.
The parties agree that each of them and/or their respective counsel
have reviewed and had an opportunity to revise the Transaction
Documents and, therefore, the normal rule of construction to the
effect that any ambiguities are to be resolved against the drafting
party shall not be employed in the interpretation of the
Transaction Documents or any amendments thereto. In addition, each
and every reference to share prices and shares of Common Stock in
any Transaction Document shall be subject to adjustment for reverse
and forward stock splits, stock dividends, stock combinations and
other similar transactions of the Common Stock that occur after the
date of this Agreement.
7.14 WAIVER
OF JURY TRIAL. IN ANY ACTION, SUIT, OR PROCEEDING IN ANY
JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY ARISING
OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY, THE PARTIES EACH KNOWINGLY AND INTENTIONALLY,
TO THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY
ABSOLUTELY, UNCONDITIONALLY, IRREVOCABLY AND EXPRESSLY WAIVE
FOREVER ANY RIGHT TO TRIAL BY JURY.
(Signature Pages Follow)
If the
foregoing correctly sets forth the understanding between the
Underwriters and the Company, please so indicate in the space
provided below for that purpose, whereupon this letter shall
constitute a binding agreement among the Company and the several
Underwriters in accordance with its terms.
Very
truly yours,
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By:
______________________
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Name:
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Title:
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Address
for Notice:
▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇
Chief
Executive Officer
▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇. Suite 203
Beverly
Hills, CA 90212
Copy
to:
▇▇▇▇▇
▇. ▇▇▇▇▇▇
▇▇▇▇▇
& ▇▇▇▇▇▇▇▇ LLP
▇▇▇▇ ▇.
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
Dallas,
TX 75201, USA
Accepted
on the date first above written.
▇▇▇▇
CAPITAL PARTNERS, LLC
As the
Representative of the several underwriters,
if
any, named in Schedule
I hereto
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Newport
Beach, CA 92660
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By:
______________________
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Name:
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Title:
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Address
for Notice:
[NAME &TITLE]
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CAPITAL PARTNERS, LLC
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Newport
Beach, CA 92660
Copy
to:
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▇▇▇▇▇▇ LLP
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Washington,
DC 20001
SCHEDULE I
Schedule of Underwriters
Underwriters
Closing
Shares Closing Pre-Funded
Warrants Closing
Warrants Closing Purchase
Price
Total
EXHIBIT
E
LOCK-UP AGREEMENT
February__,
2021
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Capital Partners, LLC
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Newport
Beach, CA 92660
Re:
GT Biopharma, Inc. (the
“Company”)
Ladies
and Gentlemen:
The
undersigned is an owner of record or beneficially of certain shares
of the Company’s common stock of the Company, $0.001 par
value per share or (“Common
Stock”), or securities convertible into, exchangeable,
or exercisable for Common Stock (“Securities”). The Company proposes
to enter into an underwriting agreement (the “Underwriting Agreement”) with you
as representative of the underwriters (the
“Representative”), with respect to a public offering of
the Company’s Common Stock (the “Offering”). The undersigned
acknowledges that the Offering will be of benefit to the
undersigned. The undersigned also acknowledges that you and each
underwriter to be named in the Underwriting Agreement will rely on
the representations and agreements of the undersigned contained in
this letter in connection with entering into the Underwriting
Agreement and performing your and their obligations thereunder.
Capitalized terms used herein and not otherwise defined shall have
the meanings set forth in the Underwriting Agreement.
In
consideration of the foregoing and as an inducement to the
underwriters, the undersigned hereby agrees that the undersigned
will not, without your prior written consent (which consent may be
withheld in your sole discretion), directly or indirectly, sell,
offer to sell, contract to sell, or grant any option for the sale
(including without limitation any short sale), grant any security
interest in, pledge, hypothecate, hedge, establish an open
“put equivalent position” within the meaning of Rule
16a-1(h) under the Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated thereunder (collectively, the
“Exchange Act”)
or otherwise dispose of or enter into any transaction which is
designed to, or could be expected to, result in the disposition
(whether by actual disposition or effective economic disposition
due to cash settlement or otherwise by the Company or any affiliate
of the Company or any person in privity with the Company or any
affiliate of the Company) (collectively, a “Disposition”) of any shares of
Common Stock or any Securities currently or hereafter owned either
of record or beneficially (as defined in Rule 13d-3 under the
Exchange Act) by the undersigned, or publicly announce the
undersigned’s intention to do any of the foregoing
(provided, however, that
the undersigned may (i) complete one or more gift transfers of
Securities to immediate family member(s) (as defined in Item 404(a)
of Regulation S-K under the Exchange Act) who agree in writing to
be similarly bound for the remainder of the Lock-up Period (as
defined below) or (ii) transfer Securities to one or more trusts
for bona fide estate planning purposes, in each case without prior
written consent and upon three (3) business days’ written
notice to you), for a period commencing on the date hereof and
continuing through the close of trading on the date one hundred and
eighty (180) days following the Closing Date, as defined in the
Underwriting Agreement, subject to adjustment as discussed below
(the “Lock-up
Period”).
The
foregoing restrictions have been expressly agreed to preclude the
holder of shares of Common Stock and/or the Securities from
engaging in any hedging or other transaction which is designed to
or reasonably expected to lead to or result in a Disposition of
shares of Common Stock or Securities during the Lock-up Period,
even if such shares of Common Stock or Securities would be disposed
of by someone other than such holder. Such prohibited hedging or
other transactions would include, without limitation, any short
sale (whether or not against the box) or any purchase, sale, or
grant of any right (including, without limitation, any put or call
option) with respect to any shares of Common Stock or Securities or
with respect to any security (other than a broad-based market
basket or index) that includes, relates to, or derives any
significant part of its value from shares of Common Stock or
Securities.
The
undersigned also agrees and consents to the entry of stop transfer
instructions with the Company’s transfer agent and registrar
against the transfer of shares of Common Stock or Securities held
by the undersigned except in compliance with the foregoing
restrictions.
The
undersigned understands that the underwriters are entering into the
Underwriting Agreement and proceeding with the Offering in reliance
upon this Lock-Up Agreement.
This
agreement is irrevocable and will be binding on the undersigned and
the respective successors, heirs, personal representatives, and
assigns of the undersigned.
This
Lock-up Agreement will be deemed to have been made and delivered in
the State of New York, and both the binding provisions of this
Agreement and the transactions contemplated hereby will be governed
as to validity, interpretation, construction, effect and in all
other respects by the internal laws of the State of New York,
without regard to the conflict of laws principles thereof. The
undersigned: (i) agrees that any legal suit, action or proceeding
arising out of or relating to this Lock-up Agreement will be
instituted exclusively in the courts located in the City of New
York, State of New York, (ii) waives any objection which it may
have or hereafter to the venue of any such suit, action or
proceeding, and (iii) irrevocably consents to the exclusive
jurisdiction of the state and federal courts located in the City of
New York, State of New York, in any such suit, action or
proceeding, waiving any, and agreeing not to assert any, basis for
seeking transfer or removal of such action to any other court,
whether federal or state, unless the New York court in which such
action or proceeding was commenced first declines jurisdiction. The
undersigned further agrees to accept and acknowledge service of any
and all process which may be served in any such suit, action or
proceeding in such courts and agrees that service of process upon
the undersigned mailed by certified mail to the undersigned’s
address will be deemed in every respect effective service of
process upon the undersigned. Nothing in this Lock-up Agreement
shall constitute an obligation to purchase shares of Common Stock,
or Securities of the Company. Whether or not the Offering actually
occurs depends on a number of factors, including market conditions.
Any Offering will only be made pursuant to the Underwriting
Agreement, the terms of which are subject to negotiation among the
Company and the Representative.
[Signature Page Follows]
The
undersigned hereby represents and warrants that the undersigned has
full power and authority to enter into this Lock-Up Agreement and
that, upon request, the undersigned will execute any additional
documents necessary in connection with the enforcement hereof. All
authority herein conferred or agreed to be conferred and any
obligations of the undersigned shall be binding upon the
successors, assigns, heirs or personal representatives of the
undersigned.
Very
truly yours,
_______________________
Printed
Name of Holder
By:
_______________________
Signature
______________________________
Printed
Name of Person Signing
(and
indicate capacity of person signing if
signing as custodian, trustee, or on behalf
of an entity)