Ÿ ] Shares1 Multiband Corporation Common Stock, no par value PURCHASE AGREEMENT
[ Ÿ ]
Shares1
Multiband
Corporation
Common
Stock, no par value
[ ▇ ], ▇▇▇▇
▇▇▇▇▇-▇▇▇▇▇▇
▇▇▇▇▇▇▇ Group LLC
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▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Northland
Securities, Inc.
▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Ladies
and Gentlemen:
Multiband Corporation, a Minnesota corporation (the “Company”),
and DirecTECH Holding Company, Inc. (the “Selling
Stockholder”) severally propose to sell to the several Underwriters named
in Schedule I hereto (the “Underwriters”)
an aggregate of [ Ÿ ] shares
(the “Firm
Shares”) of Common Stock, no par value (the “Common
Stock”), of the Company. The Firm Shares consist of [ Ÿ ] authorized
but unissued shares of Common Stock to be issued and sold by the Company and
[ Ÿ ]
outstanding shares of Common Stock to be sold by the Selling
Stockholder. The Company and the Selling Stockholder have also
granted to the several Underwriters an option to purchase up to [ Ÿ ] and [ Ÿ ] additional
shares of Common Stock, respectively, on the terms and for the purposes set
forth in Section 3 hereof (the “Option
Shares”). The Firm Shares and any Option Shares purchased
pursuant to this Purchase Agreement are herein collectively called the “Securities.”
The Company and the Selling Stockholder
hereby confirm their agreement with respect to the sale of the Securities to the
several Underwriters.
1 Plus
an option to purchase up to [ Ÿ ]
additional shares to cover over-allotments.
1. Registration
Statement and Prospectus. A registration statement on
Form S-1 (File ▇▇. ▇▇▇-[ ▇ ]) (the
“initial
registration statement”) with respect to the
Securities, including a preliminary form of prospectus, has been prepared by the
Company in conformity with the requirements of the Securities Act of 1933, as
amended (the “Act”),
and the rules and regulations (“Rules and
Regulations”) of the Securities and Exchange Commission (the “Commission”)
thereunder and has been filed with the Commission; one or more amendments to
such registration statement have also been so prepared and have been, or will
be, so filed; and, if the Company has elected to rely upon Rule 462(b) of
the Rules and Regulations to increase the size of the offering registered under
the Act, the Company will prepare and file with the Commission a registration
statement with respect to such increase pursuant to Rule 462(b) (the “additional
registration statement”). Copies of such registration
statements and amendments and each related preliminary prospectus have been
delivered to you.
If the Company has elected not to rely
upon Rule 430A of the Rules and Regulations, the Company has prepared and
will promptly file an amendment to the registration statement and an amended
prospectus. If the Company has elected to rely upon Rule 430A of
the Rules and Regulations, it will prepare and file a prospectus pursuant to
Rule 424(b) of the Rules and Regulations that discloses the information
previously omitted from the prospectus in reliance upon Rule 430A (“Rule 430A
Information”). “Original
Registration Statement” as of any time means the initial registration
statement, in the form then filed with the Commission, including all amendments
to the initial registration statement as of such time, the documents
incorporated by reference therein pursuant to the Rules and Regulations, all
information contained in the additional registration statement (if any) and then
deemed to be a part of the initial registration statement pursuant to the
General Instructions of Form S-1 and all information (if any) included in a
prospectus then deemed to be a part of the initial registration statement
pursuant to Rule 430C of the Rules and Regulations or retroactively deemed to be
a part of the initial registration statement pursuant to Rule 430A(b) of the
Rules and Regulations. “Rule 462(b)
Registration Statement” as of any time means the additional registration
statement in the form then filed with the Commission, including the contents of
the Original Registration Statement incorporated by reference therein and
including all information (if any) included in a prospectus then deemed to be a
part of the additional registration statement pursuant to Rule 430C or
retroactively deemed to be a part of the additional registration statement
pursuant to Rule 430A(b). “Registration
Statement” as of any time means the Original Registration Statement and
any Rule 462(b) Registration Statement as of such time. For purposes
of the foregoing definitions, information contained in a form of prospectus that
is deemed retroactively to be a part of the Registration Statement pursuant to
Rule 430A shall be considered to be included in the Registration Statement as of
the time specified in Rule 430A. For purposes of this Agreement,
“Effective
Time” with respect to the Original Registration Statement or the Rule
462(b) Registration Statement means the date and time as of which such
Registration Statement was declared effective by the Commission or has become
effective upon filing pursuant to Rule 462(b). “Registration
Statement” without reference to a time means the Registration Statement
as of its Effective Time. “Statutory
Prospectus” as of any time means the prospectus included in the
Registration Statement immediately prior to that time, including any information
in a prospectus deemed to be a part thereof pursuant to Rule 430A or
430C. For purposes of the preceding sentence, information contained
in a form of prospectus that is deemed retroactively to be a part of the
Registration Statement pursuant to Rule 430A shall be considered to be included
in the Statutory Prospectus as of the actual time that form of prospectus is
filed with the Commission pursuant to Rule 424(b) and not
retroactively. “Prospectus”
means the Statutory Prospectus that discloses the public offering price and
other final terms of the Securities and the offering and otherwise satisfies
Section 10(a) of the Act. “Preliminary
Prospectus” as of any time means any Statutory Prospectus included in the
Registration Statement prior to the time it becomes or became effective under
the Act and any prospectus that omits Rule 430A Information. All
references in this Agreement to the Registration Statement, any Preliminary
Prospectus, the Prospectus or any amendment or supplement to any of the
foregoing, shall be deemed to include the copy filed with the Commission
pursuant to its Electronic Data Gathering, Analysis and Retrieval System (“▇▇▇▇▇”).
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All references in this Agreement to the
Registration Statement, any Preliminary Prospectus or a Prospectus shall be
deemed as of any time to include the documents incorporated therein by reference
in accordance with the Rules and Regulations.
2. Representations
and Warranties of the Company and the Selling Stockholder.
(a) The
Company represents and warrants to, and agrees with, the several Underwriters as
follows:
(i) No
order preventing or suspending the use of any Preliminary Prospectus has been
issued by the Commission and each Preliminary Prospectus, at the time of filing
thereof or the time of first use within the meaning of the Rules and
Regulations, complied in all material respects with the requirements of the Act
and the Rules and Regulations and did not contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading; except that the foregoing shall not
apply to statements in or omissions from any Preliminary Prospectus in reliance
upon, and in conformity with, written information furnished to the Company by
you, or by any Underwriter through you, specifically for use in the preparation
thereof, it being understood and agreed that the only such information furnished
by any Underwriter consists of the information described as such in Section
6(g).
(ii) As
of the time any part of each of the Original Registration Statement and the
462(b) Registration Statement (or any post-effective amendment thereto) became
effective and at all other subsequent times until expiration of the Prospectus
Delivery Period (as hereinafter defined), upon the filing or first use within
the meaning of the Rules and Regulations of the Prospectus (or any supplement to
the Prospectus) and at all other subsequent times until expiration of the
Prospectus Delivery Period and at the First Closing Date and Second Closing
Date, (A) the Registration Statement and the Prospectus (in each case, as
so amended and/or supplemented) conformed or will conform in all material
respects to the requirements of the Act and the Rules and Regulations,
(B) the Registration Statement (as so amended) did not or will not include
an 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,
and (C) the Prospectus (as so supplemented) did not or will not include an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in light of the
circumstances in which they are or were made, not misleading; except that each
of the foregoing shall not apply to statements in or omissions from any such
document in reliance upon, and in conformity with, written information furnished
to the Company by you, or by any Underwriter through you, specifically for use
in the preparation thereof, it being understood and agreed that the only such
information furnished by any Underwriter consists of the information described
as such in Section 6(g). If the Registration Statement has been
declared effective by the Commission, no stop order suspending the effectiveness
of the Registration Statement has been issued, and no proceeding for that
purpose has been initiated or, to the Company’s knowledge, threatened by the
Commission.
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(iii) Neither
(A) the Issuer General Free Writing Prospectus(es) issued at or prior to the
Time of Sale and set forth on Schedule II, the information on Schedule III,
and the Statutory Prospectus, all considered together (collectively, the “Time of Sale
Disclosure Package”), nor (B) any individual Issuer Limited-Use Free
Writing Prospectus, when considered together with the Time of Sale Disclosure
Package, includes or included as of the Time of Sale any untrue statement of a
material fact or omit or omitted as of the Time of Sale to state any material
fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. The
preceding sentence does not apply to statements in or omissions from any
Statutory Prospectus or any Issuer Free Writing Prospectus based upon and in
conformity with written information furnished to the Company by you or by any
Underwriter through you specifically for use therein; it being understood and
agreed that the only such information furnished by any Underwriter consists of
the information described as such in Section 6(g). As used in this
paragraph and elsewhere in this Agreement:
(1) “Time of
Sale” means [ Ÿ ]:00 **[a/p]m (Eastern time) on the
date of this Agreement.
(2) “Issuer Free
Writing Prospectus” means any “issuer free writing prospectus,” as
defined in Rule 433 under the Act, relating to the Securities that (A) is
required to be filed with the Commission by the Company, or (B) is exempt from
filing pursuant to Rule 433(d)(5)(i) under the Act because it contains a
description of the Securities or of the offering that does not reflect the final
terms or pursuant to Rule 433(d)(8)(ii) because it is a “bona fide electronic
roadshow,” as defined in Rule 433 of the Rules and Regulations which is made
available without restriction, in each case in the form filed or required to be
filed with the Commission or, if not required to be filed, in the form retained
in the Company’s records pursuant to Rule 433(g) under the
Act.
(3) “Issuer General
Free Writing Prospectus” means any Issuer Free Writing Prospectus that is
intended for general distribution to prospective investors, as evidenced by its
being specified in Schedule II to this Agreement.
(4) “Issuer
Limited-Use Free Writing Prospectus” means any Issuer Free Writing
Prospectus that is not an Issuer General Free Writing
Prospectus.
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(iv) (A)
Each Issuer Free Writing Prospectus, as of its issue date and at all subsequent
times through the completion of the public offer and sale of the Securities or
until any earlier date that the Company notified or notifies the Underwriters as
described in Section 4(a)(iii)(B), did not, does not and will not include any
information that conflicted, conflicts or will conflict with the information
contained in the Registration Statement, any Statutory Prospectus or the
Prospectus. The foregoing sentence does not apply to statements in or
omissions from any Issuer Free Writing Prospectus based upon and in conformity
with written information furnished to the Company by you or by any Underwriter
through you specifically for use therein; it being understood and agreed that
the only such information furnished by any Underwriter consists of the
information described as such in Section 6(g).
(B)
(1) At
the time of filing the Registration Statement and (2) at the date hereof, the
Company was not and is not an “ineligible issuer,” as defined in Rule 405 under
the Act, including the Company or any subsidiary in the preceding three years
not having been convicted of a felony or misdemeanor or having been made the
subject of a judicial or administrative decree or order as described in Rule 405
(without taking account of any determination by the Commission pursuant to Rule
405 that it is not necessary that the Company be considered an ineligible
issuer), nor an “excluded issuer” as defined in Rule 164 under the
Act.
(C) Each
Issuer Free Writing Prospectus satisfied, as of its issue date and at all
subsequent times through the completion of the public offer and sale of the
Securities, all other conditions to use thereof as set forth in Rules 164 and
433 under the Act.
(v) The
financial statements of the Company, together with the related notes, set forth
in the Registration Statement, the Time of Sale Disclosure Package and
Prospectus comply in all material respects with the requirements of the Act and
fairly present the financial condition of the Company and its consolidated
subsidiaries as of the dates indicated and the results of operations and changes
in cash flows for the periods therein specified in conformity with generally
accepted accounting principles in the United States consistently applied
throughout the periods involved; the supporting schedules included in the
Registration Statement present fairly the information required to be stated
therein; all non-GAAP financial information included in the Registration
Statement, the Time of Sale Disclosure Package and the Prospectus complies with
the requirements of Regulation G and Item 10 of Regulation S-K under the Act;
and, except as disclosed in the Time of Sale Disclosure Package and the
Prospectus, there are no material off-balance sheet arrangements (as defined in
Regulation S-K under the Act, Item 303(a)(4)(ii)) or any other relationships
with unconsolidated entities or other persons, that may have a material current
or, to the Company’s knowledge, material future effect on the Company’s
financial condition, results of operations, liquidity, capital expenditures,
capital resources or significant components of revenue or
expenses. No other financial statements or schedules are required to
be included in the Registration Statement, the Time of Sale Disclosure Package
or the Prospectus. ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, LLP, which has
expressed its opinion with respect to the financial statements and schedules
filed as a part of the Registration Statement and included in the Registration
Statement, the Time of Sale Disclosure Package and the Prospectus, is (x) an
independent public accounting firm within the meaning of the Act and the Rules
and Regulations, (y) a registered public accounting firm (as defined in Section
2(a)(12) of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002 (the “▇▇▇▇▇▇▇▇-▇▇▇▇▇
Act”)) and (z) not in violation of the auditor independence requirements
of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act.
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(vi) Each
of the Company and its subsidiaries has been duly organized and is validly
existing as a corporation in good standing under the laws of its jurisdiction of
incorporation. Each of the Company and its subsidiaries has full corporate power
and authority to own its properties and conduct its business as currently being
carried on and as described in the Registration Statement, the Time of Sale
Disclosure Package and Prospectus, and is duly qualified to do business as a
foreign corporation in good standing in each jurisdiction in which it owns or
leases real property or in which the conduct of its business makes such
qualification necessary and in which the failure to so qualify would have a
material adverse effect upon the business, prospects, management, properties,
operations, condition (financial or otherwise) or results of operations of the
Company and its subsidiaries, taken as a whole (“Material Adverse
Effect”).
(vii) Except
as contemplated in the Time of Sale Disclosure Package and in the Prospectus,
subsequent to the respective dates as of which information is given in the Time
of Sale Disclosure Package, neither the Company nor any of its subsidiaries has
incurred any material liabilities or obligations, direct or contingent, or
entered into any material transactions, or declared or paid any dividends or
made any distribution of any kind with respect to its capital stock; and there
has not been any change in the capital stock (other than a change in the number
of outstanding shares of Common Stock due to the issuance of shares upon the
exercise of outstanding options or warrants), or any material change in the
short-term or long-term debt, or any issuance of options, warrants, convertible
securities or other rights to purchase the capital stock, of the Company or any
of its subsidiaries, or any material adverse change in the general affairs,
condition (financial or otherwise), business, prospects, management, properties,
operations or results of operations of the Company and its subsidiaries, taken
as a whole (“Material Adverse
Change”) or any development which could reasonably be expected to result
in any Material Adverse Change.
(viii) Except
as set forth in the Time of Sale Disclosure Package and in the Prospectus, there
is not pending or, to the knowledge of the Company, threatened or contemplated,
any action, suit or proceeding (a) to which the Company or any of its
subsidiaries is a party or (b) which has as the subject thereof any officer or
director of the Company, any employee benefit plan sponsored by the Company or
any property or assets owned or leased by the Company before or by any court or
Governmental Authority (as defined below), or any arbitrator, which,
individually or in the aggregate, might result in any Material Adverse Change,
or would materially and adversely affect the ability of the
Company to perform its obligations under this Agreement or which are
otherwise material in the context of the sale of the
Securities. There are no current or, to the knowledge of the Company,
pending, legal, governmental or regulatory actions, suits or proceedings (x) to
which the Company or any of its subsidiaries is subject or (y) which has as the
subject thereof any officer or director of the Company, any employee plan
sponsored by the Company or any property or assets owned or leased by the
Company, that are required to be described in the Registration Statement, Time
of Sale Disclosure Package and Prospectus by the Act or by the Rules and
Regulations and that have not been so described.
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(ix) There
are no statutes, regulations, contracts or documents that are required to be
described in the Registration Statement, in the Time of Sale Disclosure Package
and in the Prospectus or required to be filed as exhibits to the Registration
Statement by the Act or by the Rules and Regulations that have not been so
described or filed.
(x) This
Agreement has been duly authorized, executed and delivered by the Company, and
constitutes a valid, legal and binding obligation of the Company, enforceable in
accordance with its terms, except as rights to indemnity hereunder may be
limited by federal or state securities laws and except as such enforceability
may be limited by bankruptcy, insolvency, reorganization or similar laws
affecting the rights of creditors generally and subject to general principles of
equity. The execution, delivery and performance of this Agreement and
the consummation of the transactions herein contemplated will not (A) conflict
with or result in a breach or violation of any of the terms or provisions of, or
constitute a default under, or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Company pursuant to any
indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Company or any of its subsidiaries is a party or by
which the Company or any of its subsidiaries is bound or to which any of the
property or assets of the Company or any of its subsidiaries is subject, (B)
result in any violation of the provisions of the Company’s charter or by-laws or
(C) result in the violation of any law or statute or any judgment, order, rule,
regulation or decree of any court or arbitrator or federal, state, local or
foreign governmental agency or regulatory authority having jurisdiction over the
Company or any of its subsidiaries or any of their properties or assets (each, a
“Governmental
Authority”). No consent, approval, authorization or order of,
or registration or filing with any Governmental Authority is required for the
execution, delivery and performance of this Agreement or for the consummation of
the transactions contemplated hereby, including the issuance or sale of the
Securities by the Company, except such as may be required under the Act , the
rules of the Financial Industry Regulatory Authority (“FINRA”)
or state securities or blue sky laws; and the Company has full power and
authority to enter into this Agreement and to consummate the transactions
contemplated hereby, including the authorization, issuance and sale of the
Securities as contemplated by this Agreement.
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(xi) All
of the issued and outstanding shares of capital stock of the Company, including
the outstanding shares of Common Stock, are duly authorized and validly issued,
fully paid and nonassessable, have been issued in compliance with all federal
and state and foreign securities laws, were not issued in violation of or
subject to any preemptive rights or other rights to subscribe for or purchase
securities that have not been waived in writing (a copy of which has been
delivered to counsel to the Underwriters), and the holders thereof are not
subject to personal liability by reason of being such holders; the Securities
which may be sold hereunder by the Company have been duly authorized and, when
issued, delivered and paid for in accordance with the terms of this Agreement,
will have been validly issued and will be fully paid and nonassessable, and the
holders thereof will not be subject to personal liability by reason of being
such holders; and the capital stock of the Company, including the Common Stock,
conforms to the description thereof in the Registration Statement, in the Time
of Sale Disclosure Package and in the Prospectus. Except as otherwise
stated in the Registration Statement, in the Time of Sale Disclosure Package and
in the Prospectus, there are no preemptive rights or other rights to subscribe
for or to purchase, or any restriction upon the voting or transfer of, any
shares of Common Stock pursuant to the Company’s charter, by-laws or any
agreement or other instrument to which the Company or any of its subsidiaries is
a party or by which the Company or any of its subsidiaries is
bound. Except as disclosed in the Registration Statement, in the Time
of Sale Disclosure Package and in the Prospectus, neither the filing of the
Registration Statement nor the offering or sale of the Securities as
contemplated by this Agreement gives rise to any (A) rights for or relating to
the registration of any shares of Common Stock or other securities of the
Company (collectively “Registration
Rights”), and any person to whom the Company has granted Registration
Rights has agreed not to exercise such rights until after expiration of the
Lock-Up Period (as defined below) or (B) adjustment to the conversion or
exercise price of any outstanding security issued by the Company. All
of the issued and outstanding shares of capital stock of each of the Company’s
subsidiaries have been duly and validly authorized and issued and are fully paid
and nonassessable, and, except as otherwise described in the Registration
Statement, in the Time of Sale Disclosure Package and in the Prospectus, the
Company owns of record and beneficially, free and clear of any security
interests, claims, liens, proxies, equities or other encumbrances, all of the
issued and outstanding shares of such stock. Except as described in
the Registration Statement, in the Time of Sale Disclosure Package and in the
Prospectus, there are no options, warrants, agreements, contracts or other
rights in existence to purchase or acquire from the Company or any subsidiary of
the Company any shares of the capital stock of the Company or any subsidiary of
the Company. The Company has an authorized and outstanding
capitalization as set forth in the Registration Statement, in the Time of Sale
Disclosure Package and in the Prospectus under the caption
“Capitalization.” The Common Stock (including the Securities)
conforms in all material respects to the description thereof contained in the
Time of Sale Disclosure Package and the Prospectus. The description
of the Company’s stock option, stock bonus and other stock plans or
arrangements, and the options or other rights granted thereunder, set forth in
the Time of Sale Disclosure Package and the Prospectus accurately and fairly
presents the information required to be shown with respect to such plans,
arrangements, options and rights.
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(xii) The
Company and each of its subsidiaries holds, and is operating in compliance in
all material respects with, all franchises, grants, authorizations, licenses,
permits, easements, consents, certificates and orders of any Governmental
Authority or self-regulatory body required for the conduct of its business and
all such franchises, grants, authorizations, licenses, permits, easements,
consents, certifications and orders are valid and in full force and effect; and
neither the Company nor any of its subsidiaries has received notice of any
revocation or modification of any such franchise, grant, authorization, license,
permit, easement, consent, certification or order or has reason to believe that
any such franchise, grant, authorization, license, permit, easement, consent,
certification or order will not be renewed in the ordinary course; and the
Company and each of its subsidiaries is in compliance in all material respects
with all applicable federal, state, local and foreign laws, regulations, orders
and decrees.
(xiii) The
Company and its subsidiaries have good and marketable title to all property
(whether real or personal) described in the Registration Statement, in the Time
of Sale Disclosure Package and in the Prospectus as being owned by them, in each
case free and clear of all liens, claims, security interests, other encumbrances
or defects except such as are described in the Registration Statement, in the
Time of Sale Disclosure Package and in the Prospectus. The property
held under lease by the Company and its subsidiaries is held by them under
valid, subsisting and enforceable leases with only such exceptions with respect
to any particular lease as do not interfere in any material respect with the
conduct of the business of the Company or its subsidiaries.
(xiv) The
Company and each of its subsidiaries owns, possesses, or can acquire on
reasonable terms, all Intellectual Property necessary for the conduct of the
Company’s and it subsidiaries’ business as now conducted or as described in the
Registration Statement, the Time of Sale Disclosure Package and the Prospectus
to be conducted, except as such failure to own, possess, or acquire such rights
would not result in a Material Adverse Effect. Furthermore, (A) to
the knowledge of the Company, there is no infringement, misappropriation or
violation by third parties of any such Intellectual Property, except
as such infringement, misappropriation or violation would not result in a
Material Adverse Effect; (B) there is no pending or, to the knowledge of the
Company, threatened, action, suit, proceeding or claim by others challenging the
Company’s or any of its subsidiaries’ rights in or to any such Intellectual
Property, and the Company is unaware of any facts which would form a reasonable
basis for any such claim; (C) the Intellectual Property owned by the Company and
its subsidiaries, and to the knowledge of the Company, the Intellectual Property
licensed to the Company and its subsidiaries, has not been adjudged invalid or
unenforceable, in whole or in part, and there is no pending or threatened
action, suit, proceeding or claim by others challenging the validity or scope of
any such Intellectual Property, and the Company is unaware of any facts which
would form a reasonable basis for any such claim; (D) there is no pending or
threatened action, suit, proceeding or claim by others that the Company or any
of its subsidiaries infringes, misappropriates or otherwise violates any
Intellectual Property or other proprietary rights of others, neither the Company
or any of its subsidiaries has received any written notice of such claim and the
Company is unaware of any other fact which would form a reasonable basis for any
such claim; and (E) to the Company’s knowledge, no employee of the Company or
any of its subsidiaries is in or has ever been in violation of any term of any
employment contract, patent disclosure agreement, invention assignment
agreement, non-competition agreement, non-solicitation agreement, nondisclosure
agreement or any restrictive covenant to or with a former employer where the
basis of such violation relates to such employee’s employment with the Company
nor any of its subsidiaries or actions undertaken by the employee while employed
with the Company or any of its subsidiaries, except as such violation would not
result in a Material Adverse Effect. “Intellectual
Property” shall mean all patents, patent applications, trade and service
marks, trade and service ▇▇▇▇ registrations, trade names, copyrights,
licenses, inventions, trade secrets, domain names, technology, know-how and
other intellectual property.
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(xv) Neither
the Company nor any of its subsidiaries is in violation of its respective
charter, by-laws or other organizational documents, or in breach of or otherwise
in default, and no event has occurred which, with notice or lapse of time or
both, would constitute such a default in the performance of any material
obligation, agreement or condition contained in any bond, debenture, note,
indenture, loan agreement or any other material contract, lease or other
instrument to which it is subject or by which any of them may be bound, or to
which any of the material property or assets of the Company or any of its
subsidiaries is subject.
(xvi) The
Company and its subsidiaries have timely filed all federal, state, local and
foreign income and franchise tax returns required to be filed and are not in
default in the payment of any taxes which were payable pursuant to said returns
or any assessments with respect thereto, other than any which the Company or any
of its subsidiaries is contesting in good faith. There is no pending
dispute with any taxing authority relating to any of such returns, and the
Company has no knowledge of any proposed liability for any tax to be imposed
upon the properties or assets of the Company for which there is not an adequate
reserve reflected in the Company’s financial statements included in the
Registration Statement, the Time of Sale Disclosure Package and the
Prospectus.
(xvii) The
Company has not distributed and will not distribute any prospectus or other
offering material in connection with the offering and sale of the Securities
other than any Preliminary Prospectus, the Time of Sale Disclosure Package or
the Prospectus or other materials permitted by the Act to be distributed by the
Company; provided,
however, that, except as set forth on Schedule II, the Company has not
made and will not make any offer relating to the Securities that would
constitute a “free writing prospectus” as defined in Rule 405 under the Act,
except in accordance with the provisions of Section 4(a)(xvii) of this
Agreement.
(xviii) The
Securities to be sold by the Selling Stockholder and, upon official notice of
issuance, the Securities to be sold by the Company, have been approved for
listing on the Nasdaq Capital Market. Except as previously disclosed
to counsel for the Underwriters or as set forth in the Time of Sale Disclosure
Package and the Prospectus, there are no affiliations with members of FINRA
among the Company’s officers or directors or, to the knowledge of the Company,
any five percent or greater stockholders of the Company or any beneficial owner
of the Company’s unregistered equity securities that were acquired during the
180-day period immediately preceding the initial filing date of the Registration
Statement.
-10-
(xix) Other
than the subsidiaries of the Company listed in Exhibit 21 to the
Registration Statement, the Company, directly or indirectly, owns no capital
stock or other equity or ownership or proprietary interest in any corporation,
partnership, association, trust or other entity.
(xx) The
Company maintains 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 to permit preparation of financial statements in
conformity with generally accepted accounting principles in the United States
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. Except as disclosed in the
Registration Statement, in the Time of Sale Disclosure Package and in the
Prospectus, the Company’s internal control over financial reporting is effective
and none of the Company, its board of directors and audit committee is aware of
any “significant deficiencies” or “material weaknesses” (each as defined by the
Public Company Accounting Oversight Board) in its internal control over
financial reporting, or any fraud, whether or not material, that involves
management or other employees of the Company who have a significant role in the
Company’s internal controls; and since the end of the latest audited fiscal
year, there has been no change in the Company’s internal control over financial
reporting (whether or not remediated) that has materially affected, or is
reasonably likely to materially affect, the Company’s internal control over
financial reporting. The Company’s board of directors has validly
appointed an audit committee to oversee internal accounting controls whose
composition satisfies the requirements of the applicable stock exchange rules
(“Exchange
Rules”) and the Company’s board of directors and/or the audit committee
has adopted a charter that satisfies the requirements of the Exchange
Rules.
(xxi) Other
than as contemplated by this Agreement, the Company has not incurred any
liability for any finder’s or broker’s fee or agent’s commission in connection
with the execution and delivery of this Agreement or the consummation of the
transactions contemplated hereby.
(xxii) The
Company carries, or is covered by, insurance from insurers with appropriately
rated claims paying abilities in such amounts and covering such risks as is
adequate for the conduct of its business and the value of its properties and as
is customary for companies engaged in similar businesses in similar industries;
all policies of insurance and any fidelity or surety bonds insuring the Company
or any of its subsidiaries or its business, assets, employees, officers and
directors are in full force and effect; the Company and its subsidiaries are in
compliance with the terms of such policies and instruments in all material
respects; there are no claims by the Company or any of its subsidiaries under
any such policy or instrument as to which any insurance company is denying
liability or defending under a reservation of rights clause; neither the Company
nor any of its subsidiaries has been refused any insurance coverage sought or
applied for; and neither the Company nor any of its subsidiaries has
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 at a cost that
would not have a Material Adverse Effect.
-11-
(xxiii) The
Company has filed on a timely basis with the Commission all reports, proxy
statements and other documents required by the Act, the Securities Exchange Act
of 1934, as amended (the “Exchange
Act”), and the Rules and Regulations. All such documents filed
by the Company with the Commission, as of the date they were filed, conformed in
all material respects to the requirements of the Act or the Exchange Act, as
applicable, and the Rules and Regulations, and none of such documents contained
an untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading; and no such documents were filed with the Commission since the
Commission’s close of business on the business day immediately prior to the date
of this Agreement and prior to the execution of this Agreement.
(xxiv) The
Company is not and, after giving effect to the offering and sale of the
Securities, will not be an “investment company,” as such term is defined in the
Investment Company Act of 1940, as amended.
(xxv) The
Company is in compliance with all applicable provisions of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇
Act and the rules and regulations of the Commission thereunder.
(xxvi) The
Company has established and maintains disclosure controls and procedures (as
defined in Rules 13a-14 and 15d-14 under the Exchange Act) and such controls and
procedures are effective in ensuring that material information relating to the
Company, including its subsidiaries, is made known to the principal executive
officer and the principal financial officer. The Company has utilized
such controls and procedures in preparing and evaluating the disclosures in the
Registration Statement, in the Time of Sale Disclosure Package and in the
Prospectus.
(xxvii) Each
of the Company, its subsidiaries, its affiliates and any of their respective
officers, directors, supervisors, managers, agents, or employees, has not
violated, its participation in the offering will not violate, and the Company
has instituted and maintains policies and procedures designed to ensure
continued compliance with, each of the following laws: (a)
anti-bribery laws, including but not limited to, any applicable law, rule, or
regulation of any locality, including but not limited to any law, rule, or
regulation promulgated to implement the OECD Convention on Combating Bribery of
Foreign Public Officials in International Business Transactions, signed
December 17, 1997, including the U.S. Foreign Corrupt Practices Act of
1977, as amended, or any other law, rule or regulation of similar purposes and
scope, (b) anti-money laundering laws, including but not limited to, applicable
federal, state, international, foreign or other laws, regulations or government
guidance regarding anti-money laundering, including, without limitation, Title
18 US. Code section 1956 and 1957, the Patriot Act, the Bank Secrecy Act, and
international anti-money laundering principles or procedures by an
intergovernmental group or organization, such as the Financial Action Task Force
on Money Laundering, of which the United States is a member and with which
designation the United States representative to the group or organization
continues to concur, all as amended, and any Executive order, directive, or
regulation pursuant to the authority of any of the foregoing, or any
orders or licenses issued thereunder or (c) laws and regulations imposing U.S.
economic sanctions measures, including, but not limited to, the International
Emergency Economic Powers Act, the Trading with the Enemy Act, the United
Nations Participation Act and the Syria Accountability and Lebanese Sovereignty
Act, all as amended, and any Executive Order, directive, or regulation pursuant
to the authority of any of the foregoing, including the regulations of the
United States Treasury Department set forth under 31 CFR, Subtitle B, Chapter V,
as amended, or any orders or licenses issued thereunder.
-12-
(xxviii) Neither
the Company nor any of its subsidiaries nor, to the knowledge of the Company,
any director, officer or employee of the Company or any of its subsidiaries is
currently subject to any U.S. sanctions administered by the Office of Foreign
Assets Control of the U.S. Department of the Treasury.
(xxix) To
the Company’s knowledge, no transaction has occurred between or among the
Company and its subsidiaries, on the one hand, and any of the Company’s
officers, directors or 5% stockholders or any affiliate or affiliates of any
such officer, director or 5% stockholders that is required to be described that
is not so described in the Registration Statement, the Time of Sale Disclosure
Package and the Prospectus. The Company has not, directly or
indirectly, extended or maintained credit, or arranged for the extension of
credit, or renewed an extension of credit, in the form of a personal loan to or
for any of its directors or executive officers in violation of applicable laws,
including Section 402 of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act.
(xxx) Except
as disclosed in the Time of Disclosure Package and the Prospectus, neither the
Company nor any of its subsidiaries is in violation of any statute, any rule,
regulation, decision or order of any Governmental Authority or any court,
domestic or foreign, relating to the use, disposal or release of hazardous or
toxic substances or relating to the protection or restoration of the environment
or human exposure to hazardous or toxic substances (collectively, “Environmental
Laws”), owns or operates any real property contaminated with any
substance that is subject to any environmental laws, is liable for any off-site
disposal or contamination pursuant to any environmental laws, or is subject to
any claim relating to any environmental laws, which violation,
contamination, liability or claim would individually or in the
aggregate, have a Material Adverse Effect; and the Company is not aware of any
pending investigation which might lead to such a claim.
-13-
(xxxi) The
Company and each of its subsidiaries (A) is in compliance, in all material
respects, with any and all applicable foreign, federal, state and local laws,
rules, regulations, treaties, statutes and codes promulgated by any and all
governmental authorities (including pursuant to the Occupational Health and
Safety Act) relating to the protection of human health and safety in the
workplace (“Occupational
Laws”); (B) has received all material permits, licenses or other
approvals required of it under applicable Occupational Laws to conduct its
business as currently conducted; and (C) is in compliance, in all material
respects, with all terms and conditions of such permit, license or
approval. No action, proceeding, revocation proceeding, writ,
injunction or claim is pending or, to the Company’s knowledge, threatened
against the Company or any of its subsidiaries relating to Occupational Laws,
and the Company does not have knowledge of any facts, circumstances or
developments relating to its operations or cost accounting practices that could
reasonably be expected to form the basis for or give rise to such actions,
suits, investigations or proceedings.
(xxxii) (i)
To the knowledge of the Company, no “prohibited transaction” as defined under
Section 406 of ERISA or Section 4975 of the Code and not exempt under ERISA
Section 408 and the regulations and published interpretations thereunder has
occurred with respect to any Employee Benefit Plan. At no time has
the Company or any ERISA Affiliate maintained, sponsored, participated in,
contributed to or has or had any liability or obligation in respect of any
Employee Benefit Plan subject to Part 3 of Subtitle B of Title I of ERISA, Title
IV of ERISA, or Section 412 of the Code or any “multiemployer plan” as defined
in Section 3(37) of ERISA or any multiple employer plan for which the Company or
any ERISA Affiliate has incurred or could incur liability under Section 4063 or
4064 of ERISA. No Employee Benefit Plan provides or promises, or at
any time provided or promised, retiree health, life insurance, or other retiree
welfare benefits except as may be required by the Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended, or similar state law. Each
Employee Benefit Plan is and has been operated in material compliance with its
terms and all applicable laws, including but not limited to ERISA and the Code
and, to the knowledge of the Company, no event has occurred (including a
“reportable event” as such term is defined in Section 4043 of ERISA) and no
condition exists that would subject the Company or any ERISA Affiliate to any
material tax, fine, lien, penalty or liability imposed by ERISA, the Code or
other applicable law. Each Employee Benefit Plan intended to be
qualified under Code Section 401(a) is so qualified and has a favorable
determination or opinion letter from the IRS upon which it can rely, and any
such determination or opinion letter remains in effect and has not been revoked;
to the knowledge of the Company, nothing has occurred since the date of any such
determination or opinion letter that is reasonably likely to adversely affect
such qualification; (ii) with respect to each Foreign Benefit Plan, such Foreign
Benefit Plan (A) if intended to qualify for special tax treatment, meets, in all
material respects, the requirements for such treatment, and (B) if required to
be funded, is funded to the extent required by applicable law, and with respect
to all other Foreign Benefit Plans, adequate reserves therefore have been
established on the accounting statements of the applicable Company or
subsidiary; (iii) the Company does not have any obligations under any collective
bargaining agreement with any union and no organization efforts are underway
with respect to Company employees. As used in this Agreement, “Code”
means the Internal Revenue Code of 1986, as amended; “Employee Benefit
Plan” means any “employee benefit plan” within the meaning of Section
3(3) of ERISA, including, without limitation, all stock purchase, stock option,
stock-based severance, employment, change-in-control, medical, disability,
fringe benefit, bonus, incentive, deferred compensation, employee loan and all
other employee benefit plans, agreements, programs, policies or other
arrangements, whether or not subject to ERISA, under which (A) any current or
former employee, director or independent contractor of the Company or its
subsidiaries has any present or future right to benefits and which are
contributed to, sponsored by or maintained by the Company or any of its
respective subsidiaries or (B) the Company or any of its subsidiaries has had or
has any present or future obligation or liability; “ERISA”
means the Employee Retirement Income Security Act of 1974, as amended; “ERISA
Affiliate” means any member of the company’s controlled group as defined
in Code Section 414(b), (c), (m) or (o); and “Foreign Benefit
Plan” means any Employee Benefit Plan established, maintained or
contributed to outside of the United States of America or which covers any
employee working or residing outside of the United States.
-14-
(xxxiii) Except
as disclosed in the Registration Statement, the Time of Sale Disclosure Package
and the Prospectus, the Company has not granted rights to develop, manufacture,
produce, assemble, distribute, license, market or sell its products to any other
person and is not bound by any agreement that affects the exclusive right of the
Company to develop, manufacture, produce, assemble, distribute, license, market
or sell its products.
(xxxiv) No
labor problem or dispute with the employees of the Company or any of its
subsidiaries exists or is threatened or imminent, and the Company is not aware
of any existing or imminent labor disturbance by the employees of any of its or
its subsidiaries’ principal suppliers, contractors or customers, that could have
a Material Adverse Effect.
(xxxv) No
subsidiary of the Company is currently prohibited, directly or indirectly, from
paying any dividends to the Company, from making any other distribution on such
subsidiary’s capital stock, from repaying to the Company any loans or advances
to such subsidiary from the Company or from transferring any of such
subsidiary’s property or assets to the Company or any other subsidiary of the
Company, except as described in or contemplated by the Time of Sale Disclosure
Package and the Prospectus.
(xxxvi) Any
third-party statistical and market-related data included in the Registration
Statement, the Time of Sale Disclosure Package and the Prospectus are based on
or derived from sources that the Company believes to be reliable and accurate in
all material respects.
(xxxvii) No
forward-looking statement (within the meaning of Section 27A of the Act and
Section 21E of the Exchange Act) made by the Company or any of its officers or
directors contained in the Registration Statement, the Time of Sale Disclosure
Package or the Prospectus, or made available to the public generally since
January 1, 2010, has been made or reaffirmed without a reasonable
basis or has been disclosed other than in good faith.
-15-
(b) The
Selling Stockholder represents and warrants to, and agrees with, the several
Underwriters as follows:
(i) The
Selling Stockholder is the record and beneficial owner of, and has, and on the
First Closing Date and/or the Second Closing Date, as the case may be, will
have, valid and marketable title to the Securities to be sold by the Selling
Stockholder, free and clear of all security interests, claims, liens,
restrictions on transferability, legends, proxies, equities or other
encumbrances; and upon delivery of and payment for such Securities hereunder,
the several Underwriters will acquire valid and marketable title thereto, free
and clear of any security interests, claims, liens, restrictions on
transferability, legends, proxies, equities or other
encumbrances. The Selling Stockholder is selling the Securities to be
sold by the Selling Stockholder for the Selling Stockholder’s own account and is
not selling such Securities, directly or indirectly, for the benefit of the
Company or any Underwriter, and no part of the proceeds of such sale received by
the Selling Stockholder will inure, either directly or indirectly, to the
benefit of the Company or any Underwriter other than as described in the
Registration Statement, the Time of Sale Disclosure Package and
Prospectus.
(ii) The
Selling Stockholder has full right, power and authority to enter into a Letter
of Transmittal and Custody Agreement (“Custody
Agreement”), with Corporate Stock Transfer, as Custodian (the “Custodian”);
pursuant to the Custody Agreement the Selling Stockholder has placed in custody
with the Custodian, for delivery under this Agreement, the certificates
representing the Securities to be sold by the Selling Stockholder; such
certificates represent validly issued, outstanding, fully paid and nonassessable
shares of Common Stock; and such certificates were duly and properly endorsed in
blank for transfer, or were accompanied by all documents duly and properly
executed that are necessary to validate the transfer of title thereto, to the
Underwriters, free of any legend, restriction on transferability, proxy, lien or
claim, whatsoever.2
(iii) **[The Selling Stockholder has
the full right, power and authority to enter into an irrevocable power of
attorney (a “Power of
Attorney”) authorizing and directing [ Ÿ ] and [ Ÿ ], as
attorneys-in-fact (the “Attorneys-in-Fact”),
or either of them, to effect the sale and delivery of the Securities being sold
by the Selling Stockholder, to enter into this Agreement and to take all such
other action as may be necessary hereunder.]
-16-
(iv) This
Agreement[, the Custody Agreement and the Power of Attorney] have each been duly
authorized, executed and delivered by or on behalf of the Selling Stockholder
and each constitutes a valid and binding agreement of the Selling Stockholder,
enforceable in accordance with its terms, except as rights to indemnity
hereunder or thereunder may be limited by federal or state securities laws and
except as such enforceability may be limited by bankruptcy, insolvency,
reorganization or laws affecting the rights of creditors generally and subject
to general principles of equity. The execution and delivery of this
Agreement[,the Power of Attorney] and the Custody Agreement and the performance
of the terms hereof and thereof and the consummation of the transactions herein
and therein contemplated will not result in a breach or violation of any of the
terms and provisions of, or constitute a default under, any agreement or
instrument to which the Selling Stockholder is a party or by which the Selling
Stockholder is bound, or any law, regulation, order or decree applicable to the
Selling Stockholder; no consent, approval, authorization or order of, or filing
with, any court or governmental agency or body is required for the execution,
delivery and performance of this Agreement[, the Power of Attorney] and the
Custody Agreement or for the consummation of the transactions contemplated
hereby and thereby, including the sale of the Securities being sold by the
Selling Stockholder, except such as may be required under the Act or state
securities laws or blue sky laws.
(v) The
Selling Stockholder does not have any registration or other similar rights to
have any equity or debt securities registered for sale by the Company under the
Registration Statement or included in the offering contemplated by this
Agreement, except as described or incorporated by reference in the Registration
Statement.
(vi) The
Selling Stockholder has not distributed and will not distribute any prospectus
or other offering material in connection with the offering and sale of the
Securities other than any Preliminary Prospectus, the Time of Sale Disclosure
Package or the Prospectus or other materials permitted by the Act to be
distributed by the Selling Stockholder; provided, however, that the
Selling Stockholder not has made and will not make any offer relating to the
Securities that would constitute a “free writing prospectus” as defined in Rule
405 under the Act except a Permitted Free Writing Prospectus authorized by the
Company and the Underwriters for distribution in accordance with the provisions
of Section 4(a)(xvii) hereof.
(vii) As
of the time any part of each of the Original Registration Statement and the
462(b) Registration Statement (or any post-effective amendment thereto) became
effective and at all other subsequent times until expiration of the Prospectus
Delivery Period, upon the filing or first use within the meaning of the Rules
and Regulations of the Prospectus (or any supplement to the Prospectus) and at
all other subsequent times until expiration of the Prospectus Delivery Period
and at the First Closing Date and Second Closing Date, (A) the Registration
Statement and the Prospectus (in each case, as so amended and/or supplemented)
conformed or will conform in all material respects to the requirements of the
Act and the Rules and Regulations, (B) the Registration Statement (as so
amended) did not or will not include an 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, and (C) the Prospectus (as so
supplemented) did not or will not include an untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances in which they are or
were made, not misleading. The preceding sentence with respect to the
Selling Stockholder applies only to the extent that any statements in or
omissions from a Registration Statement or the Prospectus are based on written
information concerning the Selling Stockholder furnished to the Company by the
Selling Stockholder specifically for use therein (any written information
concerning the Selling Stockholder furnished to the Company by the Selling
Stockholder specifically for such use being referred to as the “Selling
Stockholder Information”).
-17-
(viii) As
of the Applicable Time, neither (i) the Time of Sale Disclosure Package nor (ii)
any individual Limited Use Issuer Free Writing Prospectus, when considered
together with the Time of Sale Disclosure Package, included any untrue statement
of a material fact or omitted to state any material fact necessary in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading. The preceding sentence with respect to the
Selling Stockholder applies only to the extent that any statements in or
omissions from the Time of Sale Disclosure Package or any Issuer Limited-Use
Free Writing Prospectus are based on the Selling Stockholder
Information.
(ix) The
Selling Stockholder Information contained in any Issuer Free Writing Prospectus,
as of its issue date and at all subsequent times through the completion of the
public offer and sale of the Securities or until any earlier date that the
Selling Stockholder notified or notifies the Company and the Underwriters as
described in the next sentence, did not, does not and will not include any
information that conflicted, conflicts or will conflict with the information
then contained in the Registration Statement. If at any time
following issuance of an Issuer Free Writing Prospectus there occurred or occurs
an event or development as a result of which such Selling Stockholder
Information, if republished immediately following such event or development,
conflicted or would conflict with the information then contained in the
Registration Statement or as a result of which the Selling Stockholder
Information would include any untrue statement of a material fact or omitted or
would omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, the Selling Stockholder has promptly notified or will promptly
notify the Company and each Underwriter and will provide the Company with all
necessary information so as to correct such untrue statement or
omission.
(x) The
sale of the Securities by the Selling Stockholder pursuant to this Agreement is
not prompted by any material information concerning the Company or any of its
subsidiaries that is not set forth in the Time of Disclosure Package and
Prospectus.
(c) Any
certificate signed by any officer of the Company and delivered to you or to
counsel for the Underwriters shall be deemed a representation and warranty by
the Company to each Underwriter as to the matters covered thereby; any
certificate signed by or on behalf of the Selling Stockholder as such and
delivered to you or to counsel for the Underwriters shall be deemed a
representation and warranty by the Selling Stockholder to each Underwriter as to
the matters covered thereby.
-18-
3. Purchase, Sale
and Delivery of Securities.
(a) On
the basis of the representations, warranties and agreements herein contained,
but subject to the terms and conditions herein set forth, the Company agrees to
issue and sell [ Ÿ ] Firm
Shares, and the Selling Stockholder agrees to sell [ Ÿ ] Firm
Shares, to the several Underwriters, and each Underwriter agrees, severally and
not jointly, to purchase from the Company and the Selling Stockholder the number
of Firm Shares set forth opposite the name of such Underwriter in
Schedule I hereto. The purchase price for each Firm Share shall
be $[ Ÿ ] per
share. The obligation of each Underwriter to each of the Company and
the Selling Stockholder shall be to purchase from each of the Company and the
Selling Stockholder that number of Firm Shares (to be adjusted by the
Underwriters to avoid fractional shares) which represents the same proportion of
the number of Firm Shares to be sold by each of the Company and the Selling
Stockholder pursuant to this Agreement as the number of Firm Shares set forth
opposite the name of such Underwriter in Schedule I hereto represents to
the total number of Firm Shares to be purchased by all Underwriters pursuant to
this Agreement. In making this Agreement, each Underwriter is
contracting severally and not jointly; except as provided in paragraph (c)
of this Section 3, the agreement of each Underwriter is to purchase only
the respective number of Firm Shares specified in Schedule I.
The Firm Shares will be delivered by
the Company and the Custodian to the several Underwriters against payment of the
purchase price therefor by wire transfer of same day funds payable to the order of
the Company and the Custodian, as appropriate, at the offices of ▇▇▇▇▇-▇▇▇▇▇▇
Capital Group LLC, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, or
such other location as may be mutually acceptable, at 9:00 a.m. Central
time on the third (or if the Securities are priced, as contemplated by Rule
15c6-1(c) under the Exchange Act, after 4:30 p.m. Eastern time, the fourth) full
business day following the date hereof, or at such other time and date as you
and the Company determine pursuant to Rule 15c6-1(a) under the Exchange Act,
such time and date of delivery being herein referred to as the “First Closing
Date.” If the Underwriters so elect, delivery of the Firm
Shares may be made by credit through full fast transfer to the accounts at The
Depository Trust Company designated by the Underwriters. Certificates
representing the Firm Shares, in definitive form and in such denominations and
registered in such names as you may request upon at least two business days’
prior notice to the Company and the Custodian, or evidence of their issuance,
will be made available for checking at a reasonable time preceding the First
Closing Date at the offices of ▇▇▇▇▇-▇▇▇▇▇▇ Capital Group LLC, Minneapolis,
Minnesota, or such other location as may be mutually
acceptable.
-19-
(b) On
the basis of the representations, warranties and agreements herein contained,
but subject to the terms and conditions herein set forth, the Company, with
respect to [ Ÿ ] of the
Option Shares, and the Selling Stockholder, with respect to [ Ÿ ] Option
Shares, hereby grant to the several Underwriters an option to purchase all or
any portion of the Option Shares at the same purchase price as the Firm Shares,
for use solely in covering any over-allotments made by the Underwriters in the
sale and distribution of the Firm Shares. The option granted
hereunder may be exercised in whole or in part at any time (but not more than
once) within 30 days after the effective date of this Agreement upon notice
(confirmed in writing) by the Underwriters to the Company and to the Selling
Stockholder setting forth the aggregate number of Option Shares as to which the
several Underwriters are exercising the option, the names and denominations in
which the certificates for the Option Shares are to be registered and the date
and time, as determined by you, when the Option Shares are to be delivered, such
time and date being herein referred to as the “Second Closing” and “Second
Closing Date”, respectively; provided, however, that the Second Closing Date
shall not be earlier than the First Closing Date nor earlier than the second
business day after the date on which the option shall have been
exercised. If the option is exercised, the obligation of each
Underwriter shall be to purchase from the Company and the Selling Stockholder
that number of Option Shares (to be adjusted by the Underwriters to avoid
fractional shares) which represents the same proportion that the number of
Option Shares granted by the Selling Stockholder and the Company bears to the
total number of Option Shares. The number of Option Shares to be
purchased by each Underwriter shall be the same percentage of the total number
of Option Shares to be purchased by the several Underwriters as the number of
Firm Shares to be purchased by such Underwriter is of the total number of Firm
Shares to be purchased by the several Underwriters, as adjusted by the
Underwriters in such manner as they deem advisable to avoid fractional
shares. No Option Shares shall be sold and delivered unless the Firm
Shares previously have been, or simultaneously are, sold and
delivered.
The Option Shares will be delivered by
the Custodian and the Company, as appropriate, to the several Underwriters
against payment of the purchase price therefor by wire transfer of same day
funds payable to the order of the Custodian or the Company, as appropriate, at
the offices of ▇▇▇▇▇-▇▇▇▇▇▇ Capital Group, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, or such other location as may be mutually acceptable at
9:00 a.m., Central time, on the Second Closing Date. If the
Underwriters so elect, delivery of the Option Shares may be made by credit
through full fast transfer to the accounts at The Depository Trust Company
designated by the Underwriters. Certificates representing the Option
Shares in definitive form and in such denominations and registered in such names
as you have set forth in your notice of option exercise, or evidence of their
issuance, will be made available for checking at a reasonable time preceding the
Second Closing Date at the office of ▇▇▇▇▇-▇▇▇▇▇▇ Capital Group, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, or such other location as may be
mutually acceptable.
(c) It
is understood that any Underwriter may (but shall not be obligated to) make
payment to the Company or the Selling Stockholder, on behalf of any other
Underwriter for the Securities to be purchased by such other
Underwriter. Any such payment by an Underwriter shall not relieve
such other Underwriter of any of its obligations hereunder. Nothing
herein contained shall constitute any of the Underwriters an unincorporated
association or partner with the Company or the Selling
Stockholder.
-20-
4. Covenants.
(a) The
Company covenants and agrees with the several Underwriters as
follows:
(i) If
the Original Registration Statement has not already been declared effective by
the Commission, the Company will use its best efforts to cause the Original
Registration Statement and any post-effective amendments thereto to become
effective as promptly as possible; the Company will notify you promptly of the
time when the Original Registration Statement or any post-effective amendment to
the Original Registration Statement has become effective or any supplement to
the Prospectus has been filed and of any request by the Commission
for any amendment or supplement to the Original Registration Statement or
Prospectus or additional information; if the Company has elected to rely on
Rule 430A of the Rules and Regulations, the Company will prepare and file a
Prospectus containing the information omitted therefrom pursuant to
Rule 430A of the Rules and Regulations with the Commission within the time
period required by, and otherwise in accordance with the provisions of,
Rules 424(b) and 430A of the Rules and Regulations; if the Company has
elected to rely upon Rule 462(b) of the Rules and Regulations to increase
the size of the offering registered under the Act and the Rule 462(b)
Registration Statement has not yet been filed and become effective, the Company
will prepare and file the Rule 462 Registration Statement with the Commission
within the time period required by, and otherwise in accordance with the
provisions of, Rule 462(b) and the Act; the Company will prepare and file
with the Commission, promptly upon your request, any amendments or supplements
to the Registration Statement or Prospectus that, in your opinion, may be
necessary or advisable in connection with the distribution of the Securities by
the Underwriters; and the Company will furnish the Underwriters and counsel for
the Underwriters a copy of any proposed amendment or supplement to the
Registration Statement or Prospectus and will not file any amendment or
supplement to the Registration Statement or Prospectus to which you shall
reasonably object by notice to the Company after having been furnished a copy a
reasonable time prior to the filing.
(ii) The
Company will advise you, promptly after it shall receive notice or obtain
knowledge thereof, of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement, or any
post-effective amendment thereto or preventing or suspending the use of any
Preliminary Prospectus, the Time of Sale Disclosure Package, the Prospectus or
any Issuer Free Writing Prospectus, of the suspension of the qualification of
the Securities for offering or sale in any jurisdiction, or of the initiation or
threatening of any proceeding for any such purpose; and the Company will
promptly use its best efforts to prevent the issuance of any stop order or to
obtain its withdrawal if such a stop order should be
issued. Additionally, the Company agrees that it shall comply with
the provisions of Rules 424(b) and 430A, as applicable, under the Act and will
use its reasonable efforts to confirm that any filings made by the Company under
Rule 424(b), Rule 433 or Rule 462 were received in a timely manner by the
Commission.
-21-
(iii) (A)
Within the time during which a prospectus (assuming the absence of Rule 172)
relating to the Securities is required to be delivered under the Act by any
Underwriter or dealer (the “Prospectus
Delivery Period”), the Company will comply as far as it is able with all
requirements imposed upon it by the Act, as now and hereafter amended, and by
the Rules and Regulations, as from time to time in force, so far as necessary to
permit the continuance of sales of or dealings in the Securities as contemplated
by the provisions hereof, the Time of Sale Disclosure Package and the
Prospectus. If during such period any event occurs as a result of
which the Prospectus (or if the Prospectus is not yet available to prospective
purchasers, the Time of Sale Disclosure Package) would include an untrue
statement of a material fact or omit to state a material fact necessary to make
the statements therein, in the light of the circumstances then existing, not
misleading, or if during such period it is necessary to amend the Registration
Statement or supplement the Prospectus (or if the Prospectus is not yet
available to prospective investors, the Time of Sale Disclosure Package) to
comply with the Act, the Company will promptly notify you and will amend the
Registration Statement or supplement the Prospectus (or, if the Prospectus is
not yet available to prospective purchasers, the Time of Sale Disclosure
Package) (at the expense of the Company) so as to correct such statement or
omission or effect such compliance.
(B)
If at any
time following issuance of an Issuer Free Writing Prospectus there occurred or
occurs an event or development as a result of which such Issuer Free Writing
Prospectus conflicted or would conflict with the information contained in the
Registration Statement, any Statutory Prospectus or the Prospectus relating to
the Securities or included or would include an untrue statement of a material
fact or omitted or would omit to state a material fact necessary in order to
make the statements therein, in the light of the circumstances prevailing at
that subsequent time, not misleading, the Company has promptly notified or
promptly will notify the Underwriters and has promptly amended or will promptly
amend or supplement, at its own expense, such Issuer Free Writing Prospectus to
eliminate or correct such conflict, untrue statement or
omission.
(iv) The
Company shall take or cause to be taken all necessary action to qualify the
Securities for sale under the securities laws of such jurisdictions as you
reasonably designate and to continue such qualifications in effect so long as
required for the distribution of the Securities, except that the Company shall
not be required in connection therewith to qualify as a foreign corporation or
to execute a general consent to service of process in any state.
(v) The
Company will furnish, at its own expense, to the Underwriters and counsel for
the Underwriters copies of the Registration Statement (three of which will be
signed and will include all consents and exhibits filed therewith), and to the
Underwriters and any dealer each Preliminary Prospectus, the Time of Sale
Disclosure Package, the Prospectus, any Issuer Free Writing Prospectus and all
amendments and supplements to such documents, in each case as soon as available
and in such quantities as you may from time to time reasonably
request.
-22-
(vi) During
a period of five years commencing with the date hereof, the Company will furnish
to each Underwriter who may so request in writing copies of all periodic and
special reports furnished to the stockholders of the Company and all
information, documents and reports filed with the Commission, FINRA or any
securities exchange (other than any such information, documents and reports that
are filed with the Commission electronically via ▇▇▇▇▇ or any successor
system).
(vii) The
Company will make generally available to its security holders as soon as
practicable, but in no event later than 15 months after the end of the Company’s
current fiscal quarter, an earnings statement (which need not be audited)
covering a 12-month period beginning after the effective date of the Original
Registration Statement (or if later the Rule 462(b) Registration Statement) that
shall satisfy the provisions of Section 11(a) of the Act and Rule 158
of the Rules and Regulations.
(viii) The
Company, whether or not the transactions contemplated hereunder are consummated
or this Agreement is terminated, will pay or cause to be paid (A) all
expenses (including transfer taxes allocated to the respective transferees)
incurred in connection with the delivery to the Underwriters of the Securities,
(B) all expenses and fees (including, without limitation, fees and expenses of
the Company’s accountants and counsel and counsel to the Selling Stockholder,
but, except as otherwise provided below, not including fees of the Underwriters’
counsel) in connection with the preparation, printing, filing, delivery, and
shipping of the Registration Statement (including the financial statements
therein and all amendments, schedules, and exhibits thereto), the Securities,
each Preliminary Prospectus, the Time of Sale Disclosure Package, the
Prospectus, any Issuer Free Writing Prospectus and any amendment thereof or
supplement thereto, and the printing, delivery, and shipping of this Agreement
and other underwriting documents, including Blue Sky Memoranda (covering the
states and other applicable jurisdictions), (C) all filing fees and fees
and disbursements of the Underwriters’ counsel incurred in connection with the
qualification of the Securities for offering and sale by the Underwriters or by
dealers under the securities or blue sky laws of the states and other
jurisdictions which you shall designate, (D) the fees and expenses of the
Custodian and any transfer agent or registrar, (E) the filing fees and fees and
disbursements of Underwriters’ counsel incident to any required review and
approval by FINRA of the terms of the sale of the Securities, (F) listing
fees, if any, (G) the cost and expenses of the Company relating to investor
presentations or any “roadshow” undertaken in connection with marketing of the
Securities, (H) all other reasonable accountable fees and expenses of the
Underwriters, including all fees and disbursements of Underwriters’ counsel, in
connection with the offering contemplated by this Agreement (not to exceed
$125,000 in the aggregate, which amount includes any fees and disbursements of
the Underwriters’ counsel paid by the Company pursuant to clauses (C) and (E) of
this paragraph), and (I) all other costs and
expenses of the Company and the Selling Stockholder incident to the performance
of its obligations hereunder that are not otherwise specifically provided for
herein. If this Agreement is terminated by the Underwriters pursuant to
Section 8 hereof or if the sale of the Securities provided for herein is
not consummated by reason of any failure, refusal or inability on the part of
the Company or the Selling Stockholder to perform any agreement on its part to
be performed, or because any other condition of the Underwriters’ obligations
hereunder required to be fulfilled by the Company or the Selling Stockholder is
not fulfilled, the Company will reimburse the several Underwriters for all
reasonable, accountable, out-of-pocket disbursements (including but not limited
to fees and disbursements of counsel, printing expenses, travel expenses,
postage, facsimile and telephone charges) incurred by the Underwriters in
connection with their investigation, preparing to market and marketing the
Securities or in contemplation of performing their obligations
hereunder.
-23-
(ix) The
Company will apply the net proceeds from the sale of the Securities to be sold
by it hereunder for the purposes set forth in the Time of Sale Disclosure
Package and in the Prospectus and will file such reports with the Commission
with respect to the sale of the Securities and the application of the proceeds
therefrom as may be required in accordance with Rule 463 of the Rules and
Regulations.
(x) The
Company will not, without the prior written consent of ▇▇▇▇▇-▇▇▇▇▇▇ Capital
Group LLC, from the date of execution of this Agreement and continuing to and
including the date that is 90 days after the date of the Prospectus (the “Lock-Up
Period”), (A) offer, pledge, announce the intention to sell, sell,
contract to sell, sell any option or contract to purchase, purchase any option
or contract to sell, grant any option, right or warrant to purchase or otherwise
transfer or dispose of, directly or indirectly, any shares of Stock or any
securities convertible into or exercisable or exchangeable for Common Stock or
(B) enter into any swap or other agreement that transfers, in whole or in part,
any of the economic consequences of ownership of the Common Stock, whether any
such transaction described in clause (A) or (B) above is to be settled by
delivery of Common Stock or such other securities, in cash or otherwise, except
(x) to the Underwriters pursuant to this Agreement, (y) pursuant to employee
stock option plans as existing on the date of this Agreement or (z) or upon the
exercise of warrants or the conversion or exchange of convertible or
exchangeable securities outstanding as of the date of this Agreement in
accordance with the terms of such securities as of the date
hereof. The Company agrees not to accelerate the vesting of any
option or warrant or the lapse of any repurchase right prior to the expiration
of the Lock-Up Period. If (1) during the last 17 days of the Lock-Up
Period, (a) the Company issues an earnings release, (b) the Company publicly
announces material news or (c) a material event relating to the Company occurs;
or (2) prior to the expiration of the Lock-Up Period, the Company announces that
it will release earnings results during the 16-day period beginning on the last
day of the Lock-Up Period, then the restrictions in this Agreement, unless
otherwise waived by ▇▇▇▇▇-▇▇▇▇▇▇ Capital Group LLC in writing, shall continue to
apply until the expiration of the date that is 18 calendar days after the date
on which (a) the Company issues the earnings release, (b) the Company publicly
announces material news or (c) a material event relating to the Company
occurs. The Company will provide the Underwriters and each
shareholder subject to the Lock-Up Agreement (as defined below) with prior
notice of any such announcement that gives rise to the extension of the Lock-Up
Period.
-24-
(xi) The
Company has caused to be delivered to you prior to the date of this Agreement a
letter, in the form of Exhibit A hereto (the “Lock-Up
Agreement”), from each of the Company’s directors and officers. The Company will
enforce the terms of each Lock-Up Agreement and issue stop-transfer instructions
to the transfer agent for the Common Stock with respect to any transaction or
contemplated transaction that would constitute a breach of or default under the
applicable Lock-Up Agreement.
(xii) The
Company has not taken and will not take, directly or indirectly, any action
designed to or which might reasonably be expected to cause or result in, or
which has constituted, the stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the Securities, and
has not effected any sales of Common Stock which are required to be disclosed in
response to Item 701 of Regulation S-K under the Act which have not
been so disclosed in the Registration Statement.
(xiii) The
Company will not incur any liability for any finder’s or broker’s fee or agent’s
commission in connection with the execution and delivery of this Agreement or
the consummation of the transactions contemplated hereby.
(xiv) The
Company will file on a timely basis with the Commission such periodic and
special reports as required by the Rules and Regulations.
(xv) The
Company and its subsidiaries will maintain such controls and other procedures,
including without limitation those required by Sections 302 and 906 of the
▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act and the applicable regulations thereunder, that are designed
to ensure that information required to be disclosed by the Company in the
reports that 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, including without limitation, controls and procedures designed
to ensure that information required to be disclosed by the Company in the
reports that it files or submits under the Exchange Act is accumulated and
communicated to the Company’s management, including its principal executive
officer and its principal financial officer, or persons performing similar
functions, as appropriate to allow timely decisions regarding required
disclosure, to ensure that material information relating to Company, including
its subsidiaries, is made known to them by others within those
entities.
(xvi) The
Company and its subsidiaries will comply with all applicable provisions of the
▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act.
(xvii) The
Company represents and agrees that, unless it obtains the prior written consent
of ▇▇▇▇▇-▇▇▇▇▇▇ Capital Group LLC, and each Underwriter severally represents and
agrees that, unless it obtains the prior written consent of the Company and
▇▇▇▇▇-▇▇▇▇▇▇ Capital Group LLC, 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 under the Securities Act, or that would
otherwise constitute a “free writing prospectus,” as defined in Rule 405 under
the Act, required to be filed with the Commission; provided that the prior
written consent of the parties hereto shall be deemed to have been given in
respect of the free writing prospectuses included in Schedule II. Any
such free writing prospectus consented to by the Company and ▇▇▇▇▇-▇▇▇▇▇▇
Capital Group LLC is hereinafter referred to as a “Permitted Free
Writing Prospectus.” The Company represents that it has
treated or agrees that it will treat each Permitted Free Writing Prospectus as
an “issuer free writing prospectus,” as defined in Rule 433, and has complied
and will comply with the requirements of Rules 164 and 433 applicable to any
Permitted Free Writing Prospectus, including timely Commission filing where
required, legending and record keeping. The Company represents that
it has satisfied and agrees that it will satisfy the conditions in Rule 433 to
avoid a requirement to file with the Commission any electronic
roadshow.
-25-
(b) The
Selling Stockholder covenants and agrees with the several Underwriters as
follows:
(i) The
Selling Stockholder will pay all taxes, if any, on the transfer and sale,
respectively, of the Securities being sold by the Selling Stockholder.
(ii) The
Securities to be sold by the Selling Stockholder, represented by the
certificates on deposit with the Custodian pursuant to the Custody Agreement,
are subject to the interest of the several Underwriters; the arrangements made
for such custody are, except as specifically provided in the Custody Agreement,
irrevocable; and the obligations of the Selling Stockholder hereunder shall not
be terminated, except as provided in this Agreement or in the Custody Agreement,
by any act of the Selling Stockholder, by operation of law, whether by the
liquidation, dissolution or merger of the Selling Stockholder, by the death of
the Selling Stockholder, or by the occurrence of any other event. If
the Selling Stockholder should liquidate, dissolve or be a party to a merger or
if any other such event should occur before the delivery of the Securities
hereunder, certificates for the Securities deposited with the Custodian shall be
delivered by the Custodian in accordance with the terms and conditions of this
Agreement as if such liquidation, dissolution, merger or other event had not
occurred, whether or not the Custodian shall have received notice
thereof.
(iii) The
lock-up agreement executed by the Selling Stockholder and delivered to you prior
to the date of this Agreement is in full force and effect.
(iv) The
Selling Stockholder has not taken and will not take, directly or indirectly, any
action designed to or which might reasonably be expected to cause or result in
stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of the Securities, and has not effected any sales
of Common Stock which, if effected by the Company, would be required to be
disclosed in response to Item 701 of Regulation S-K.
(v) The
Selling Stockholder shall immediately notify you if any event occurs, or of any
change in the Selling Stockholder Information, which results in the Time of Sale
Disclosure Package or in the Prospectus (as amended or supplemented) or any
Issuer General Free-Writing Prospectus including an untrue statement of a
material fact or omitting to state any material fact necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading.
-26-
(vi) The
Selling Stockholder shall deliver to the Custodian or the Underwriters, as
appropriate, prior to the First Closing Date, a properly completed and executed
United States Treasury Department Form W-9 (or other applicable form or
statement specified by Treasury Department regulations in lieu
thereof).
5. Conditions of
Underwriters’ Obligations. The obligations of the several
Underwriters hereunder are subject to the accuracy, as of the date hereof and at
each of the First Closing Date and the Second Closing Date (as if made at such
Closing Date), of and compliance with all representations, warranties and
agreements of the Company and the Selling Stockholder contained herein, to the
performance by the Company and the Selling Stockholder of their respective
obligations hereunder and to the following additional conditions:
(a) The
Registration Statement shall have become effective not later than
5:00 p.m., Central time, on the date of this Agreement, or such later time
and date as the several Underwriters shall approve and all filings required by
Rules 424, 430A and 433 of the Rules and Regulations shall have been timely
made (without reliance on Rule 424(b)(8) or Rule 164(b)); no stop order
suspending the effectiveness of the Registration Statement or any part thereof
or any amendment thereof, nor suspending or preventing the use of the Time of
Sale Disclosure Package, the Prospectus or any Issuer Free Writing
Prospectus shall have been issued; no proceedings for the issuance of
such an order shall have been initiated or threatened; and any request of the
Commission for additional information (to be included in the Registration
Statement, the Time of Sale Disclosure Package, the Prospectus, any Issuer Free
Writing Prospectus or otherwise) shall have been complied with to your
satisfaction.
(b) No
Underwriter shall have advised the Company that (i) the Registration Statement
or any amendment thereof or supplement thereto contains an untrue statement of a
material fact which, in your opinion, is material or omits to state a material
fact which, in your opinion, is required to be stated therein or necessary to
make the statements therein not misleading, or (ii) the Time of Sale Disclosure
Package or the Prospectus, or any amendment thereof or supplement thereto, or
any Issuer Free Writing Prospectus contains an untrue statement of fact which,
in your opinion, is material, or omits to state a fact which, in your opinion,
is material and is required to be stated therein, or necessary to make the
statements therein, in light of the circumstances under which they are made, not
misleading.
(c) Except
as contemplated in the Time of Sale Disclosure Package and in the Prospectus,
subsequent to the respective dates as of which information is given in the Time
of Sale Disclosure Package and the Prospectus, neither the Company nor any of
its subsidiaries shall have incurred any material liabilities or obligations,
direct or contingent, or entered into any material transactions, or declared or
paid any dividends or made any distribution of any kind with respect to its
capital stock; and there shall not have been any change in the capital stock
(other than a change in the number of outstanding shares of Common Stock due to
the issuance of shares upon the exercise of outstanding options or warrants), or
any material change in the short-term or long-term debt of the Company, or any
issuance of options, warrants, convertible securities or other rights to
purchase the capital stock of the Company or any of its subsidiaries, or any
Material Adverse Change or any development involving a prospective Material
Adverse Change (whether or not arising in the ordinary course of business),
that, in your judgment, makes it impractical or inadvisable to offer or deliver
the Securities on the terms and in the manner contemplated in the Time of Sale
Disclosure Package and in the Prospectus.
-27-
(d) On
each Closing Date, there shall have been furnished to you the opinion of
Winthrop & Weinstine, P. A., counsel for the Company, dated such Closing
Date and addressed to you with respect to such matters as the parties shall
mutually agree.
(e) On
each Closing Date, there shall have been furnished to you the opinion of [ Ÿ ], counsel
for the Selling Stockholder, dated such Closing Date and addressed to you with
respect to such matters as the parties shall mutually agree.
(f) On
each Closing Date, there shall have been furnished to you such opinion or
opinions from Faegre & ▇▇▇▇▇▇ LLP, counsel for the several Underwriters,
dated such Closing Date and addressed to you, with respect to such matters as
you reasonably may request, and such counsel shall have received such papers and
information as they request to enable them to pass upon such
matters.
(g) On
each Closing Date you shall have received a letter of ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, LLP, dated such date and addressed to you, confirming that it is an
independent public accounting firm within the meaning of the Act and are in
compliance with the applicable requirements relating to the qualifications of
accountants under Rule 2-01 of Regulation S-X of the Commission, and
stating, as of the date of such letter (or, with respect to matters involving
changes or developments since the respective dates as of which specified
financial information is given in the Time of Sale Disclosure Package, as of a
date not prior to the date hereof or more than five days prior to the date of
such letter), the conclusions and findings of said firm with respect to the
financial information and other matters covered by its letter delivered to you
concurrently with the execution of this Agreement, and the effect of the letter
so to be delivered on such Closing Date shall be to confirm the conclusions and
findings set forth in such prior letter.
(h) On
each Closing Date, there shall have been furnished to you a certificate, dated
such Closing Date and addressed to you, signed by the chief executive officer
and by the chief financial officer of the Company, to the effect
that:
(i) The
representations and warranties of the Company in this Agreement are true and
correct, in all material respects, as if made at and as of such Closing Date,
and the Company has complied with all the agreements and satisfied all the
conditions on its part to be performed or satisfied at or prior to such Closing
Date;
-28-
(ii) No
stop order or other order suspending the effectiveness of the Registration
Statement or any part thereof or any amendment thereof or the qualification of
the Securities for offering or sale, nor suspending or preventing the use of the
Time of Sale Disclosure Package, the Prospectus or any Issuer Free Writing
Prospectus, has been issued, and no proceeding for that purpose has
been instituted or, to the best of their knowledge, is contemplated by the
Commission or any state or regulatory body; and
(iii) The
signers of said certificate have carefully examined the Registration Statement,
the Time of Sale Disclosure Package and the Prospectus, and any amendments
thereof or supplements thereto, and (A) each part of the Registration Statement
and the Prospectus, and any amendments thereof or supplements thereto contain,
and contained when such part of the Registration Statement, or any amendment
thereof, became effective, all statements and information required to be
included therein, the Registration Statement, or any amendment thereof, does not
contain and did not contain when such part of the Registration Statement, or any
amendment thereof, became effective, 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 not misleading, and the Prospectus, as amended or
supplemented, does not include and did not include as of its date or the time of
first use within the meaning of the Rules and Regulations, any untrue statement
of material fact or omit to state and did not omit to state as of its date or
the time of first use within the meaning of the rules and Regulations a material
fact necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading, (B) neither (1) the Time of Sale
Disclosure Package nor (2) any individual Issuer Limited-Use Free Writing
Prospectus, when considered together with the Time of Sale Disclosure Package,
include, nor included as of the Time of Sale any untrue statement of a material
fact or omits, or omitted as of the Time of Sale, to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, (C) since the Time of
Sale there has occurred no event required to be set forth in an amended or
supplemented prospectus which has not been so set forth, (D) subsequent to the
respective dates as of which information is given in the Time of Sale Disclosure
Package and in the Prospectus, neither the Company nor any of its subsidiaries
has incurred any material liabilities or obligations, direct or contingent, or
entered into any material transactions, not in the ordinary course of business,
or declared or paid any dividends or made any distribution of any kind with
respect to its capital stock, and except as disclosed in the Time of Sale
Disclosure Package and in the Prospectus, there has not been any change in the
capital stock (other than a change in the number of outstanding shares of Common
Stock due to the issuance of shares upon the exercise of outstanding options or
warrants), or any material change in the short-term or long-term debt, or any
issuance of options, warrants, convertible securities or other rights to
purchase the capital stock, of the Company, or any of its subsidiaries, or any
other Material Adverse Change or any development which could reasonably be
expected to result in any Material Adverse Change (whether or not arising in the
ordinary course of business), and (E) except as stated in the Time of Sale
Disclosure Package and in the Prospectus, there is not pending, or, to the
knowledge of the Company, threatened or contemplated, any action, suit or
proceeding to which the Company or any of its subsidiaries is a party before or
by any court, Governmental Agency or any arbitrator, which could reasonably be
expected to result in any Material Adverse Change.
-29-
(i) On
each Closing Date, there shall have been furnished to you a certificate, dated
such Closing Date and addressed to you, signed by the Selling Stockholder [or
either of the Selling Stockholder’s Attorneys-in-Fact] to the effect that the
representations and warranties of the Selling Stockholder contained in this
Agreement are true and correct as if made at and as of such Closing Date, and
that the Selling Stockholder has complied with all the agreements and satisfied
all the conditions on the Selling Stockholder’s part to be performed or
satisfied at or prior to such Closing Date.
(j) The
Underwriters shall have received all of the Lock-Up Agreements referenced in
Section 4.
(k) The
Company shall have furnished to you and counsel for the Underwriters such
additional documents, certificates and evidence as you or they may have
reasonably requested.
(l) FINRA
shall have raised no objection to the fairness and reasonableness of the
underwriting terms and arrangements.
(m) The
Securities to be delivered on such Closing Date will have been approved for
listing on the Nasdaq Capital Market, subject to official notice of
issuance.
All such opinions, certificates,
letters and other documents will be in compliance with the provisions hereof
only if they are satisfactory in form and substance to you and counsel for the
Underwriters. The Company will furnish you with such conformed copies
of such opinions, certificates, letters and other documents as you shall
reasonably request.
6. Indemnification
and Contribution.
(a)
The Company agrees to indemnify and hold harmless each Underwriter from and
against any losses, claims, damages or liabilities, joint or several, to which
such Underwriter may become subject, under the Act or otherwise (including in
settlement of any litigation if such settlement is effected with the written
consent of the Company), insofar as such losses, claims, damages or liabilities
(or actions in respect thereof) arise out of or are based upon an untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement, including the 430A Information and any other information
deemed to be a part of the Registration Statement at the time of effectiveness
and at any subsequent time pursuant to the Rules and Regulations, if applicable,
any Preliminary Prospectus, the Time of Sale Disclosure Package, the Prospectus,
or any amendment or supplement thereto, any Issuer Free Writing Prospectus or in
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 Common Stock
(“Marketing
Materials”), including any roadshow or investor presentations made to
investors by the Company (whether in person or electronically), or arise out of
or are based upon the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading, and will reimburse each Underwriter for any legal or other
expenses reasonably incurred by it in connection with investigating or defending
against such loss, claim, damage, liability or action as such expenses are
incurred; provided,
however, that the Company will not be liable in any such case to the
extent that any such loss, claim, damage, liability or action arises out of or
is based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in the Registration Statement, any Preliminary Prospectus,
the Time of Sale Disclosure Package, the Prospectus, or any such amendment or
supplement, any Issuer Free Writing Prospectus or in any Marketing Materials, in
reliance upon and in conformity with written information furnished to the
Company by you, or by any Underwriter through you, specifically for use in the
preparation thereof; it being understood and agreed that the only information
furnished by an Underwriter consists of the information described as such in
Section 6(g).
-30-
(b) The
Selling Stockholder agrees to indemnify and hold harmless each Underwriter from
and against any losses, claims, damages or liabilities, joint or several, to
which such Underwriter may become subject, under the Act or otherwise (including
in settlement of any litigation if such settlement is effected with the written
consent of the Selling Stockholder), insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in the
Registration Statement, including the 430A Information and any other information
deemed to be a part of the Registration Statement at the time of effectiveness
and at any subsequent time pursuant to the Rules and Regulations, if applicable,
any Preliminary Prospectus, the Time of Sale disclosure Package, the Prospectus,
or any amendment or supplement thereto, any Issuer Free Writing Prospectus, or
in any Marketing Materials, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, and will reimburse
each Underwriter for any legal or other expenses reasonably incurred by it in
connection with investigating or defending against such loss, claim, damage,
liability or action as such expenses are incurred; provided, however, that (x) the Selling
Stockholder shall be liable in any such case only to the extent that any such
loss, claim, damage, liability or action arises out of or is based upon an
untrue statement or alleged untrue statement or omission or alleged omission
made in the Registration Statement, any Preliminary Prospectus, the Time of Sale
Disclosure Package, the Prospectus, or any such amendment or supplement, any
Issuer Free Writing Prospectus or in any Marketing Materials in reliance upon
and in conformity with Selling Stockholder Information, and (y) in no event
shall the Selling Stockholder’s liability hereunder exceed the gross proceeds
from the sale of Securities by the Selling Stockholder pursuant to this
Agreement.
(c) Each
Underwriter will, severally and not jointly, indemnify and hold harmless the
Company and the Selling Stockholder from and against any losses, claims, damages
or liabilities to which the Company and the Selling Stockholder may become
subject, under the Act or otherwise (including in settlement of any litigation,
if such settlement is effected with the written consent of such Underwriter),
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon an untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement, any
Preliminary Prospectus, the Time of Sale Disclosure Package, the Prospectus, or
any amendment or supplement thereto, or any Issuer Free Writing Prospectus or
arise out of or are based upon the omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein not misleading, in each case to the extent, but only to the
extent, that such untrue statement or alleged untrue statement or omission or
alleged omission was made in the Registration Statement, any Preliminary
Prospectus, the Time of Sale Disclosure Package, the Prospectus, or any such
amendment or supplement, or any Issuer Free Writing Prospectus in reliance upon
and in conformity with written information furnished to the Company by you, or
by such Underwriter through you, specifically for use in the preparation thereof
(it being understood and agreed that the only information furnished by an
Underwriter consists of the information described as such in Section 6(g)), and
will reimburse the Company and the Selling Stockholder for any legal or other
expenses reasonably incurred by the Company or the Selling Stockholder in
connection with investigating or defending against any such loss, claim, damage,
liability or action as such expenses are incurred.
-31-
(d) Promptly
after receipt by an indemnified party under subsection (a), (b) or (c) above of
notice of the commencement of any action, such indemnified party shall, if a
claim in respect thereof is to be made against the indemnifying party under such
subsection, notify the indemnifying party in writing of the commencement
thereof; but the omission so to notify the indemnifying party shall not relieve
the indemnifying party from any liability that it may have to any indemnified
party except to the extent such indemnifying party has been materially
prejudiced by such failure (through the forfeiture of substantive rights or
defenses). In case any such action shall be brought against any
indemnified party, and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate
in, and, to the extent that it shall wish, jointly with any other indemnifying
party similarly notified, to assume the defense thereof, with counsel
satisfactory to such indemnified party, and after notice from the indemnifying
party to such indemnified party of the indemnifying party’s election so to
assume the defense thereof, the indemnifying party shall not be liable to such
indemnified party under such subsection for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof other than reasonable costs of investigation; provided, however, that
if, in your sole judgment, it is advisable for the Underwriters to be
represented as a group by separate counsel, you shall have the right to employ a
single counsel (in addition to local counsel) to represent all Underwriters who
may be subject to liability arising from any claim in respect of which indemnity
may be sought by the Underwriters under subsection (a) or (b) of this
Section 6, in which event the reasonable fees and expenses of such separate
counsel shall be borne by the indemnifying party or parties and reimbursed to
the Underwriters as incurred. An indemnifying party shall not be
obligated under any settlement agreement relating to any action under this
Section 6 to which it has not agreed in writing. In addition, no
indemnifying party shall, without the prior written consent of the indemnified
party (which consent shall not be unreasonably withheld or delayed, effect any
settlement of any pending or threatened proceeding unless such settlement
includes an unconditional release of such indemnified party for all liability on
claims that are the subject matter of such proceeding and does not include a
statement as to, or an admission of, fault, culpability or a failure to act by
or on behalf of an indemnified party.
-32-
(e) If
the indemnification provided for in this Section 6 is unavailable or
insufficient to hold harmless an indemnified party under subsection (a),
(b) or (c) above, then each indemnifying party shall contribute to the amount
paid or payable by such indemnified party as a result of the losses, claims,
damages or liabilities referred to in subsection (a), (b) or (c) above,
(i) in such proportion as is appropriate to reflect the relative benefits
received by the Company and the Selling Stockholder on the one hand and the
Underwriters on the other from the offering of the Securities or (ii) if
the allocation provided by clause (i) above is not permitted by applicable
law, in such proportion as is appropriate to reflect not only the relative
benefits referred to in clause (i) above but also the relative fault of the
Company and the Selling Stockholder on the one hand and the Underwriters on the
other in connection with the statements or omissions that resulted in such
losses, claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative benefits received by the Company and the
Selling Stockholder on the one hand and the Underwriters on the other shall be
deemed to be in the same proportion as the total net proceeds from the offering
(before deducting expenses) received by the Company and Selling Stockholder bear
to the total underwriting discounts and commissions received by the
Underwriters, in each case as set forth in the table on the cover page of the
Prospectus. The relative fault shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates to
information supplied by the Company, the Selling Stockholder or the Underwriters
and the parties’ relevant intent, knowledge, access to information and
opportunity to correct or prevent such untrue statement or
omission. The Company, the Selling Stockholder and the Underwriters
agree that it would not be just and equitable if contributions pursuant to this
subsection (e) were to be determined by pro rata allocation (even if the
Underwriters were treated as one entity for such purpose) or by any other method
of allocation which does not take account of the equitable considerations
referred to in the first sentence of this subsection (e). The
amount paid by an indemnified party as a result of the losses, claims, damages
or liabilities referred to in the first sentence of this subsection (e)
shall be deemed to include any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating or defending against any
action or claim which is the subject of this
subsection (e). Notwithstanding the provisions of this
subsection (e), no Underwriter shall be required to contribute any amount
in excess of the amount by which the total price at which the Securities
underwritten by it and distributed to the public were offered to the public
exceeds the amount of any damages that such Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission and (ii) the liability under this subsection of the Selling
Stockholder shall be limited to an amount equal to the gross proceeds from the
sale of Securities sold by the Selling Stockholder hereunder. No
person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The
Underwriters’ obligations in this subsection (e) to contribute are several
in proportion to their respective underwriting obligations and not
joint.
(f) The
obligations of the Company and the Selling Stockholder under this Section 6
shall be in addition to any liability which the Company and the Selling
Stockholder may otherwise have and shall extend, upon the same terms and
conditions, to each person, if any, who controls any Underwriter within the
meaning of the Act; and the obligations of the Underwriters under this
Section 6 shall be in addition to any liability that the respective
Underwriters may otherwise have and shall extend, upon the same terms and
conditions, to each director of the Company (including any person who, with his
consent, is named in the Registration Statement as about to become a director of
the Company), to each officer of the Company who has signed the Registration
Statement and to each person, if any, who controls the Company or the Selling
Stockholder within the meaning of the Act.
-33-
(g) The
Underwriters severally confirm and the Company and the Selling Stockholder
acknowledge that the statements with respect to the public offering of the
Securities by the Underwriters set forth [ Ÿ ] under the
caption “Underwriting” in the Time of Sale Disclosure Package and in the
Prospectus are correct and constitute the only information concerning such
Underwriters furnished in writing to the Company by or on behalf of the
Underwriters specifically for inclusion in the Registration Statement, any
Preliminary Prospectus, the Time of Sale Disclosure Package, the Prospectus or
any Issuer Free Writing Prospectus.
7. Representations
and Agreements to Survive Delivery. All representations,
warranties, and agreements of the Company and the Selling Stockholder herein or
in certificates delivered pursuant hereto, and the agreements of the several
Underwriters, the Company and the Selling Stockholder contained in Section 6
hereof, shall remain operative and in full force and effect regardless of any
investigation made by or on behalf of any Underwriter or any controlling person
thereof, or the Company or any of its officers, directors, or controlling
persons, or the Selling Stockholder or any controlling person thereof, and shall
survive delivery of, and payment for, the Securities to and by the Underwriters
hereunder.
8. Termination.
(a) You
shall have the right to terminate this Agreement by giving notice to the Company
and the Selling Stockholder as hereinafter specified at any time at or prior to
the First Closing Date, and the option referred to in Section 3(b), if
exercised, may be cancelled at any time prior to the Second Closing Date, if
(i) the Company shall have failed, refused or been unable, at or prior to
such Closing Date, to perform any agreement on its part to be performed
hereunder, (ii) any other condition of the Underwriters’ obligations
hereunder is not fulfilled, (iii) trading on the NASDAQ Stock Market, New
York Stock Exchange or the NYSE Amex Equities exchange shall have been wholly
suspended, (iv) minimum or maximum prices for trading shall have
been fixed, or maximum ranges for prices for securities shall have been
required, on the NASDAQ Stock Market, New York Stock Exchange or the NYSE Amex Equities exchange,
by such exchange or by order of the Commission or any other Governmental
Authority, (v) a banking moratorium shall have been declared by federal or
state authorities, or (vi) there shall have occurred any outbreak or escalation
of hostilities or any change in financial markets or any calamity or crisis
that, in your judgment, is material and adverse and makes it impractical or
inadvisable to proceed with the completion of the sale of and payment for the
Securities. Any such termination shall be without liability of any
party to any other party except that the provisions of Section 4(a)(viii),
Section 4(b)(i), Section 4(b)(ii) and Section 6 hereof shall at all
times be effective.
(b) If
you elect to terminate this Agreement as provided in this Section, the Company
and the Selling Stockholder shall be notified promptly by you by telephone,
confirmed by letter.
9. Default by the
Selling Stockholder or the Company. If the Selling Stockholder
shall fail at the First Closing Date to sell and deliver the Securities that the
Selling Stockholder is obligated to sell hereunder, then the Underwriters may
choose, by notice from you to the Company and the Selling Stockholder, either
(a) terminate this Agreement without any liability on the part of any
Underwriter or, except as provided in Section 4(a)(viii), Section 4(b)(i),
Section 4(b)(ii) and Section 6 hereof, any non-defaulting party or
(b) elect to purchase the Securities which the Company has agreed to sell
hereunder.
-34-
In the event of a default by the
Selling Stockholder as referred to in this Section, either you or the Company
shall have the right to postpone the First Closing Date for a period not
exceeding seven days in order to effect any required changes in the Registration
Statement, in the Time of Sale Disclosure Package or in the Prospectus or in any
other documents or arrangements.
If the Company shall fail at the First
Closing Date to sell and deliver the number of Securities which it is obligated
to sell hereunder, then this Agreement shall terminate without any liability on
the part of any Underwriter or, except as provided in Section 4(a)(viii),
Section 4(b)(i), Section 4(b)(ii) and Section 6 hereof, any non-defaulting
party.
No action taken pursuant to this
Section shall relieve the Company or the Selling Stockholder so defaulting from
liability, if any, in respect of such default.
10.
Notices. Except
as otherwise provided herein, all communications hereunder shall be in writing
and, if to the Underwriters, shall be mailed or delivered to the address of such
Underwriter indicated on the first page of this Agreement; if to the Company,
shall be mailed or delivered to it at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Chief
Executive Officer; if to the Selling Stockholder, shall be mailed or delivered
to [
Ÿ ], or in
each case to such other address as the person to be notified may have requested
in writing. Any party to this Agreement may change such address for
notices by sending to the parties to this Agreement written notice of a new
address for such purpose.
11. Persons Entitled
to Benefit of Agreement. This Agreement shall inure to the
benefit of and be binding upon the parties hereto and their respective
successors and assigns and the controlling persons, officers and directors
referred to in Section 6. Nothing in this Agreement is intended or
shall be construed to give to any other person, firm or corporation any legal or
equitable remedy or claim under or in respect of this Agreement or any provision
herein contained. The term “successors and assigns” as herein used
shall not include any purchaser, as such purchaser, of any of the Securities
from any of the several Underwriters.
-35-
12. Absence of
Fiduciary Relationship. The Company and the Selling
Stockholder each acknowledges and agrees that: (a) the Underwriters have been
retained solely to act as an underwriter in connection with the sale of the
Securities and that no fiduciary, advisory or agency relationship between the
Company or the Selling Stockholder and any Underwriter have been created in
respect of any of the transactions contemplated by this Agreement, irrespective
of whether the Underwriters have advised or are advising the Company or the
Selling Stockholder on other matters; (b) the price and other terms of the
Securities set forth in this Agreement were established by the Company and the
Selling Stockholder following discussions and arms-length negotiations with the
Underwriters, and each of the Company and the Selling Stockholder is capable of
evaluating and understanding and understands and accepts the terms, risks and
conditions of the transactions contemplated by this Agreement; (c) it has been
advised that the Underwriters and their affiliates are engaged in a broad range
of transactions which may involve interests that differ from those of the
Company and the Selling Stockholder and that the Underwriters have no obligation
to disclose such interest and transactions to the Company or the Selling
Stockholder by virtue of any fiduciary, advisory or agency relationship; (d) it
has been advised that the Underwriters are acting, in respect of the
transactions contemplated by this Agreement, solely for the benefit of the
Underwriters, and not on behalf of the Company or the Selling Stockholder; (e)
it, he or she waives to the fullest extent permitted by law, any claims it may
have against the Underwriters for breach of fiduciary duty or alleged breach of
fiduciary duty in respect of any of the transactions contemplated by this
Agreement and agrees that the Underwriters shall have no liability (whether
direct or indirect) to the Company or the Selling Stockholder in respect of such
a fiduciary duty claim on behalf of or in right of the Selling Stockholder or
the Company, including stockholders, employees or creditors of the
Company.
13. Governing
Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
14. Counterparts. This
Agreement may be executed in one or more counterparts and, if executed in more
than one counterpart, the executed counterparts shall each be deemed to be an
original and all such counterparts shall together constitute one and the same
instrument.
15. General
Provisions. This Agreement constitutes the entire agreement of
the parties to this Agreement and supersedes all prior written or oral and all
contemporaneous oral agreements, understandings and negotiations with respect to
the subject matter hereof. This Agreement may not be amended or
modified unless in writing by all of the parties hereto, and no condition herein
(express or implied) may be waived unless waived in writing by each party whom
the condition is meant to benefit. The Section headings herein are
for the convenience of the parties only and shall not affect the construction or
interpretation of this Agreement.
[Signature
Page Follows]
-36-
Please sign and return to the Company
the enclosed duplicates of this letter whereupon this letter will become a
binding agreement between the Company, the Selling Stockholder and the several
Underwriters in accordance with its terms.
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Very
truly yours,
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Multiband
Corporation
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By
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Its
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DirecTECH
Holding Company, Inc.
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By
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Title
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Confirmed
as of the date first
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above
mentioned
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▇▇▇▇▇-▇▇▇▇▇▇
Capital Group LLC
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By
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Its
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Northland
Securities, Inc.
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By
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Its
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SCHEDULE
I
|
Underwriter
|
Number of Firm Shares (1)
|
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▇▇▇▇▇-▇▇▇▇▇▇
Capital Group LLC
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Northland
Securities, Inc.
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Total
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(1)
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The
Underwriters may purchase up to an additional [ Ÿ ]
Option Shares, to the extent the option described in Section 3(b) of
the Agreement is exercised, in the proportions and in the manner described
in the Agreement.
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SCHEDULE
II
Issuer
General Free Writing Prospectuses
SCHEDULE
III
Pricing
Information
EXHIBIT
A
Form
of Lock-Up Agreement
_________________, 20___
▇▇▇▇▇-▇▇▇▇▇▇
Capital Group LLC
Northland
Securities, Inc.
c/o
▇▇▇▇▇-▇▇▇▇▇▇ Capital Group LLC
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Dear
Sirs:
As an inducement to the underwriters
(the “Underwriters”)
to execute a purchase agreement (the “Purchase
Agreement”) providing for a public offering (the “Offering”)
of common stock (the “Common
Stock”), of Multiband Corporation, a Minnesota corporation, and any
successor (by merger or otherwise) thereto (the “Company”),
the undersigned hereby agrees that without, in each case, the prior written
consent of ▇▇▇▇▇-▇▇▇▇▇▇ Capital Group LLC (“▇▇▇▇▇-▇▇▇▇▇▇”)
during the period specified in the second succeeding paragraph (the “Lock-Up
Period”), the undersigned will not (1) offer, pledge, announce the
intention to sell, sell, contract to sell, sell any option or contract to
purchase, purchase any option or contract to sell, grant any option, right or
warrant to purchase, make any short sale or otherwise transfer or dispose of,
directly or indirectly, any shares of Common Stock or any securities convertible
into, exercisable or exchangeable for or that represent the right to receive
Common Stock (including without limitation, Common Stock which may be deemed to
be beneficially owned by the undersigned in accordance with the rules and
regulations of the Securities and Exchange Commission and securities which may
be issued upon exercise of a stock option or warrant) whether now owned or
hereafter acquired (the “Undersigned’s
Securities”) or (2) enter into any swap or other agreement that
transfers, in whole or in part, any of the economic consequences of ownership of
the Undersigned’s Securities, whether any such transaction described in clause
(1) or (2) above is to be settled by delivery of Common Stock or such other
securities, in cash or otherwise. The foregoing restriction is
expressly agreed to preclude the undersigned from engaging in any hedging or
other transaction which is designed to or which reasonably could be expected to
lead to or result in a sale or disposition of the Undersigned’s Securities even
if such Securities would be disposed of by someone other than the
undersigned. Such prohibited hedging or other transactions would
include without limitation any short sale or any purchase, sale or grant of any
right (including without limitation any put or call option) with respect to any
of the Undersigned’s Securities or with respect to any security that includes,
relates to, or derives any significant part of its value from such
Securities.
In addition, the undersigned agrees
that, without the prior written consent of ▇▇▇▇▇-▇▇▇▇▇▇, it will
not, during the Lock-Up Period, make any demand for or exercise any right with
respect to, the registration of any Common Stock or any security convertible
into or exercisable or exchangeable for Common Stock.
A-1
The
initial Lock-Up Period will commence on the date of this Agreement and continue
and include the date 90 days after the date of the final prospectus used to sell
Common Stock in the Offering pursuant to the Purchase Agreement; provided,
however, that if (1) during the last 17 days of the initial Lock-Up Period, the
Company releases earnings results or material news or a material event relating
to the Company occurs or (2) prior to the expiration of the initial Lock-Up
Period, the Company announces that it will release earnings results during the
16-day period beginning on the last day of the initial Lock-Up Period, then in
each case the Lock-Up Period will be extended until the expiration of the 18-day
period beginning on the date of release of the earnings results or the
occurrence of the material news or material event, as applicable, unless
▇▇▇▇▇-▇▇▇▇▇▇ waives,
in writing, such extension.
The
undersigned hereby acknowledges that the Company will be requested to agree in
the Purchase Agreement to provide written notice to the undersigned of any event
that would result in an extension of the Lock-Up Period pursuant to the previous
paragraph and agrees that any such notice properly delivered will be deemed to
have been given to, and received by, the undersigned. The undersigned
further agrees that, prior to engaging in any transaction or taking any other
action that is subject to the terms of this Agreement during the period from the
date of this Agreement to and including the 34th day
following the expiration of the initial Lock-Up Period, it will give notice
thereof to the Company and will not consummate such transaction or take any such
action unless it has received written confirmation from the Company that the
Lock-Up Period (as may have been extended pursuant to the previous paragraph)
has expired.
Notwithstanding
the foregoing, the undersigned may transfer the Undersigned’s Securities (i) as
a bona fide gift or
gifts and (ii) to any trust for the direct or indirect benefit of the
undersigned or the immediate family of the undersigned; provided, in each case, that
(x) such transfer shall not involve a disposition for value, (y) the transferee
agrees in writing with the Underwriters to be bound by the terms of this Lock-Up
Agreement, and (z) no filing by any party under Section 16(a) of the Securities
Exchange Act of 1934, as amended (the “Exchange
Act”), shall be required or shall be made voluntarily in connection with
such transfer. For purposes of this Agreement, “immediate family”
shall mean any relationship by blood, marriage or adoption, nor more remote than
first cousin.
In
addition, the foregoing restrictions shall not apply to (i) the exercise of
stock options granted pursuant to the Company’s equity incentive plans; provided that it shall apply
to any of the Undersigned’s Securities issued upon such exercise, or
(ii) the establishment of any contract, instruction or plan (a “Plan”)
that satisfies all of the requirements of Rule 10b5-1(c)(1)(i)(B) under the
Exchange Act; provided
that no sales of the Undersigned’s Securities shall be made pursuant to such a
Plan prior to the expiration of the Lock-Up Period (as such may have been
extended pursuant to the provisions hereof), and such a Plan may only be
established if no public announcement of the establishment or existence thereof
and no filing with the Securities and Exchange Commission or other regulatory
authority in respect thereof or transactions thereunder or contemplated thereby,
by the undersigned, the Company or any other person, shall be required, and no
such announcement or filing is made voluntarily, by the undersigned, the Company
or any other person, prior to the expiration of the Lock-Up Period (as such may
have been extended pursuant to the provisions hereof).
A-2
In
furtherance of the foregoing, the Company and its transfer agent and registrar
are hereby authorized to decline to make any transfer of shares of Common Stock
if such transfer would constitute a violation or breach of this
Agreement.
The
undersigned hereby represents and warrants that the undersigned has full power
and authority to enter into this Agreement. 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.
The
undersigned understands that the undersigned shall be released from all
obligations under this Agreement if (i) the Company notifies the
Underwriters that it does not intend to proceed with the Offering, (ii) the
Purchase Agreement does not become effective, or if the Purchase Agreement
(other than the provisions thereof which survive termination) shall terminate or
be terminated prior to payment for and delivery of the Common Stock to be sold
thereunder, or (iii) the Offering is not completed by June 30, 2011.
The
undersigned understands that the Underwriters are entering into the Purchase
Agreement and proceeding with the Offering in reliance upon this
Agreement.
This
Agreement shall be governed by, and construed in accordance with, the laws of
the State of New York.
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Very
truly yours,
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Printed
Name of Holder
|
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By:
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Signature
|
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Printed
Name of Person Signing
|
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(and
indicate capacity of person signing if
|
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signing
as custodian, trustee, or on behalf of
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||
|
an
entity)
|
||
A-3