UNDERWRITING AGREEMENT between RECRUITER.COM GROUP, INC., and JOSEPH GUNNAR & CO. LLC as Representative of the Several Underwriters
Exhibit 1.1
between
▇▇▇▇▇▇▇▇▇.▇▇▇ GROUP, INC.,
and
▇▇▇▇▇▇ ▇▇▇▇▇▇ & CO. LLC
as Representative of the Several Underwriters
Exhibit 1.1
▇▇▇▇▇▇▇▇▇.▇▇▇ GROUP, INC.
______ __,
2021
▇▇▇▇▇▇ ▇▇▇▇▇▇ & Co. LLC
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
As Representative of the several Underwriters named on
Schedule
1 attached
hereto
Ladies and Gentlemen:
The undersigned, ▇▇▇▇▇▇▇▇▇.▇▇▇ Group, Inc., a corporation formed
under the laws of the State of Nevada (collectively with its
subsidiaries and affiliates, including, without limitation, all
entities disclosed or described in the Registration Statement (as
hereinafter defined) as being subsidiaries or affiliates of
▇▇▇▇▇▇▇▇▇.▇▇▇ Group, Inc., the “Company”), hereby confirms its agreement (this
“Agreement”) with ▇▇▇▇▇▇ ▇▇▇▇▇▇ & Co. LLC
(hereinafter referred to as “you” (including its correlatives) or the
“Representative”)
and with the other underwriters named on Schedule 1
hereto for which the Representative is
acting as representative (the Representative and such other
underwriters being collectively called the
“Underwriters” or, individually, an
“Underwriter”) as follows:
1. Purchase
and Sale of Securities.
1.1 Firm
Securities.
1.1.1 Nature
and Purchase of Firm Securities.
(i) On the basis of the
representations and warranties herein contained, but subject to the
terms and conditions herein set forth, the Company agrees to issue
and sell to the several Underwriters, an aggregate of __________
shares (each, a “Firm
Share” and collectively, the “Firm Shares”) of the
Company’s common stock, par value $0.0001 per share (the
“Common Stock”).
For every one Firm Share issued and sold by the Company, the
Company shall issue and sell to the several Underwriters one
warrant to purchase one share of Common Stock each at an exercise
price of $____ per share (110% of the public offering price per
Firm Share in the Offering) (each, a “Warrant” and collectively, the
“Warrants”), or
an aggregate of Warrants to purchase an aggregate of
_________ shares of
Common Stock (the “Firm
Warrants” and together with the Firm Shares, the
“Firm
Securities”). The Firm Shares and Firm Warrants shall
be sold as a unit (a “Firm Unit”), consisting of one Firm
Share and one Firm Warrant.
(ii) The
Underwriters, severally and not jointly, agree to purchase from the
Company the number of Firm Units set forth opposite their
respective names on Schedule 1 attached hereto and
made a part hereof at a purchase price of $_____ per Firm Unit (93% of the Firm Unit Offering
Price), and the purchase price of the Firm Unit shall be allocated
as follows: (i) $_____ per Firm Share and (ii)
$0.01 per Firm Warrant. The
Firm Shares are to be offered initially to the public at the
offering price set forth on the cover page of the Prospectus (as
defined in Section 2.1.1 hereof).
1.1.2 Firm
Securities Payment and Delivery.
(i) Delivery and
payment for the Firm Securities shall be made at 10:00 a.m.,
Eastern time, on the second (or if the
Firm Securities are priced, as contemplated by Rule 15c6-1(c) under
the Exchange Act, after 4:30 p.m. Eastern time, the third) full
business day following the date hereof, or at such other time and
date as the Representative and the Company determine pursuant to
Rule 15c6-1(a) under the Exchange Act, at the offices of
▇▇▇▇▇▇▇ Krooks LLP, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
(“Representative’s
Counsel”), or at such other place (or remotely by
facsimile or other electronic transmission) as shall be agreed upon
by the Representative and the Company. The time and date of
delivery of and payment for the Firm Securities is called the
“Closing
Date.”
(ii) Payment
for the Firm Securities shall be made on the Closing Date by wire
transfer in federal (same day) funds, payable to the order of the
Company upon delivery of the certificates (in form and substance
satisfactory to the Underwriters) representing the Firm Securities
(or through the facilities of the Depository Trust Company
(“DTC”)) for the
account of the Representative. The Firm Securities shall be
registered in such name or names and in such authorized
denominations as the Representative may request in writing at least
two (2) Business Days prior to the Closing Date. The Company shall
not be obligated to sell or deliver the Firm Securities except upon
tender of payment by the Representative for all of the Firm
Securities. The term “Business Day” means any day other
than a Saturday, a Sunday or a legal holiday or a day on which
banking institutions are authorized or obligated by law to close in
New York, New York.
1.2 Over-allotment
Option.
1.2.1 Option
Securities. The Company hereby grants to the Underwriters an
option (the “Over-allotment
Option”) to purchase up to an additional _________
shares of Common Stock, representing up to fifteen percent (15%) of
the Firm Shares included in the Firm Units sold in the offering
(the “Option
Shares”), and/or Warrants to purchase an additional
_____________ shares of Common Stock, representing up to 15% of the
Firm Warrants included in the Firm Units sold in the Offering (the
“Option
Warrants”), in each case for the purpose of covering
over-allotments of such securities, if any. The purchase price to
be paid per Option Share shall be equal to the Firm Share purchase
price (i.e., $_____) and the purchase price to be paid per Option
Warrant shall be $0.01. The Over-allotment Option is, at the
Underwriters’ sole discretion, for Option Shares and Option
Warrants together, solely Option Shares, solely Option Warrants, or
any combination thereof (each, an “Option Security” and collectively,
the “Option
Securities”). The Firm Securities and the Option
Securities are collectively referred to as the “Securities.” The Securities, the
shares of Common Stock underlying the Firm Warrants, and the shares
of Common Stock underlying the Option Warrants are referred to
herein collectively as the “Public Securities.” The Firm
Warrants and the Option Warrants, if any, shall be issued pursuant
to, and shall have the rights and privileges set forth in, a
warrant agreement, dated on or before the Closing Date, between the
Company and Philadelphia Stock Transfer, Inc. as warrant agent (the
“Warrant
Agreement”). The offering and sale of the Public
Securities is herein referred to as the “Offering.”
1.2.2 Exercise
of Option. The Over-allotment Option granted pursuant to
Section 1.2.1 hereof may be exercised by the Representative as to
all (at any time) or any part (from time to time) of the Option
Shares and/or Option Warrants, in any confirmation thereof, within
45 days after the effective date (the “Effective Date”) of the
Registration Statement (as defined in Section 2.1.1 below). The
purchase price to be paid per Option Share shall be equal to the
Firm Share purchase price. The purchase price to be paid per Option
Warrant shall be equal to the Firm Warrant purchase price. The
Underwriters shall not be under any obligation to purchase any
Option Securities prior to the exercise of the Over-allotment
Option. The Over-allotment Option granted hereby may be exercised
by the giving of oral notice to the Company from the
Representative, which shall be confirmed in writing by overnight
mail or facsimile or other electronic transmission, setting forth
the number of Option Shares and/or Option Warrants to be purchased
and the date and time for delivery of and payment for the Option
Securities (the “Option
Closing Date”), which shall not be later than one (1)
Business Day after the date of the notice or such other time as
shall be agreed upon by the Company and the Representative, at the
offices of Representative’s Counsel, or at such other place
(including remotely by facsimile or other electronic transmission)
as shall be agreed upon by the Company and the Representative. If
such delivery and payment for the Option Securities does not occur
on the Closing Date, the Option Closing Date will be as set forth
in the notice. Upon exercise of the Over-allotment Option with
respect to all or any portion of the Option Securities, subject to
the terms and conditions set forth herein, (i) the Company shall
become obligated to sell to the Underwriters the number of Option
Shares and/or Option Warrants specified in such notice, and (ii)
each of the Underwriters, acting severally and not jointly, shall
purchase that portion of the total number of Option Shares and
Option Warrants then being purchased that the number of Firm Shares
and/or Option Warrants as set forth in Schedule 1 opposite the name of
such Underwriter bears to the total number of Firm Shares, subject,
in each case, to such adjustments as the Representative, in its
sole discretion, shall determine.
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1.2.3 Payment
and Delivery. Payment for the Option Securities shall be
made on the Option Closing Date by wire transfer in federal (same
day) funds, payable to the order of the Company upon delivery to
you of certificates (in form and substance satisfactory to the
Representative) representing the Option Securities (or through the
facilities of DTC for the account of the Underwriters). The Option
Securities shall be registered in such name or names and in such
authorized denominations as the Representative may request in
writing at least two (2) Business Days prior to the Option Closing
Date. The Company shall not be obligated to sell or deliver the
Option Securities except upon tender of payment by the
Representative for applicable Option Securities. The Option Closing
Date may be simultaneous with, but not earlier than, the Closing
Date; and in the event that such time and date are simultaneous
with the Closing Date, the term “Closing Date” shall refer to the
time and date of delivery of the Firm Securities and Option
Securities.
1.3 Representative’s
Warrants.
1.3.1 Purchase
Warrants. The Company hereby agrees to issue and sell to the
Representative (and/or its designees) on the Closing Date an option
(“Representative’s
Warrant”) in the form attached hereto as Exhibit A for the purchase
of an aggregate of ________ shares of Common Stock (which is
equal to an aggregate of 5% of the Firm Securities sold in the
Offering), for an aggregate purchase price of $100.00. The
Representative’s Warrant shall be exercisable, in whole or in
part, commencing on a date which is one (1) year after the
Effective Date and expiring on the five-year anniversary of the
Effective Date at an initial exercise price per share of Common
Stock of $____, which is equal to 125% of the public offering price
of each Firm Share. The Representative’s Warrant and the
shares of Common Stock issuable upon exercise thereof are sometimes
hereinafter referred to together as the “Representative’s
Securities.” The Representative understands and agrees
that there are significant restrictions pursuant to FINRA Rule 5110
against transferring the Representative’s Warrant and the
underlying shares of Common Stock during the one hundred eighty
(180) days after the Effective Date and by its acceptance thereof
shall agree that it will not sell, transfer, assign, pledge or
hypothecate the Representative’s Warrant, or any portion
thereof, or be the subject of any hedging, short sale, derivative,
put or call transaction that would result in the effective economic
disposition of such securities for a period of one hundred eighty
(180) days following the Effective Date to anyone other than (i) an
Underwriter or a selected dealer in connection with the Offering,
or (ii) a bona fide officer or partner of the Representative or of
any such Underwriter or selected dealer; and only if any such
transferee agrees to the foregoing lock-up
restrictions.
1.3.2 Delivery.
Delivery of the Representative’s Warrant shall be made on the
Closing Date and shall be issued in the name or names and in such
authorized denominations as the Representative may
request.
2. Representations
and Warranties of the Company. The Company, represents and
warrants to the Underwriters as of the Applicable Time (as defined
below), as of the Closing Date and as of the Option Closing Date,
if any, as follows:
2.1 Filing
of Registration Statement.
2.1.1 Pursuant
to the Securities Act.
(i) The Company has
prepared and filed with the Securities and Exchange Commission (the
“Commission”) a
registration statement, including the related preliminary
prospectus or prospectuses, relating to the Public Securities under
the Securities Act of 1933, as amended (the “Securities Act”), on Form S-1 (No.
333-249208) (the “Initial
Registration Statement”); and such Initial
Registration Statement, and any post-effective amendment thereto,
each in the form previously delivered to you, have been declared
effective by the Commission, in such form. Other than a
registration statement, if any, increasing the size of the Offering
(a “Rule 462(b) Registration
Statement”) filed pursuant to Rule 462(b) under the
Securities Act, which will become effective upon filing, no other
document with respect to the Initial Registration Statement has
heretofore been filed with the Commission. The various parts of the
Initial Registration Statement and the 462(b) Registration
Statement, if any, including all exhibits thereto and including the
information contained in the form of final prospectus filed with
the Commission pursuant to Rule 424(b) under the Securities Act and
deemed by virtue of Rule 430A under the Securities Act to be part
of the Initial Registration Statement at the time it became
effective under the Securities Act, each as amended at the time
such part of the Initial Registration Statement or Rule 462(b)
Registration Statement, if any, became or hereafter becomes
effective under the Securities Act, are hereafter collectively
referred to as the “Registration
Statement.”
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All references in this agreement (this
“Agreement”) to the Registration Statement, the Rule
462(b) Registration Statement, any Preliminary Prospectus, Issuer
Free Writing Prospectus or the Prospectus, or any amendments or
supplements to any of the foregoing, shall be deemed to include any
copy thereof filed with the Commission pursuant to its Electronic
Data Gathering, Analysis and Retrieval System
(“▇▇▇▇▇”). For purposes of this Agreement,
“Applicable
Time” is 5:30 p.m. (New
York City time) on the date of this Agreement.
(ii) The
prospectus relating to the Public Securities and the
Representative’s Securities, in the form first filed with the
Commission pursuant to Rule 424(b) under the Securities Act, is
hereafter referred to as the “Prospectus.” Any preliminary
prospectus included in the Initial Registration Statement or filed
with the Commission pursuant to Rule 424 under the Securities Act
is hereafter referred to as a “Preliminary Prospectus”; and the
Preliminary Prospectus relating to the Public Securities, if any,
as amended or supplemented immediately prior to the Applicable
Time, is hereafter referred to as the “Pricing Prospectus.” Any
“issuer free writing prospectus” (as defined in Rule
433 under the Securities Act) relating to the Public Securities is
hereafter referred to as an “Issuer Free Writing Prospectus”;
and the Pricing Prospectus, as supplemented by the Issuer Free
Writing Prospectuses, if any, listed in Schedule 2-B hereto, and
the information included on Schedule 2A hereto, taken together, are
hereafter referred to collectively as the “Pricing Disclosure Package.” As
used herein “Testing-the-Waters Communication”
means any oral or written communication with potential investors
undertaken in reliance on Section 5(d) of the Securities Act, and
“Written Testing-the-Waters
Communication” means any Testing-the-Waters
Communication that is a written communication within the meaning of
Rule 405 under the Securities Act.
(iii) At
the time of filing the Registration Statement and any
post-effective amendment thereto, at the earliest time thereafter
that the Company or another offering participant made a
bona fide offer (within the
meaning of Rule 164(h)(2) of the Securities Act) of the Public
Securities and at the date hereof, the Company was not and is not
an “ineligible issuer,” as defined in Rule
405.
(iv) Each
Issuer Free Writing Prospectus conformed or will conform in all
material respects to the requirements of the Securities Act and the
regulations promulgated thereunder on the date of first use, and
the Company has complied with the requirements of Rule 433 under
the Securities Act with respect to each Issuer Free Writing
Prospectus including, without limitation, all prospectus delivery,
filing, record retention and legending requirements applicable to
any such Issuer Free Writing Prospectus. The Company has not (i)
distributed any offering material in connection with the Offering
other than any Preliminary Prospectus, the Prospectus, and any
Issuer Free Writing Prospectus set forth on Schedule 2-B hereto, or
(ii) filed, referred to, approved, used or authorized the use of
any “free writing prospectus” as defined in Rule 405
under the Securities Act with respect to the Offering or the Public
Securities, except for any Issuer Free Writing Prospectus set forth
in Schedule 2-B hereto and any electronic road show previously
approved by the Representative. The Company has retained in
accordance with the Securities Act and the rules and regulations
promulgated thereunder all Issuer Free Writing Prospectuses that
were not required to be filed pursuant to the Securities Act and
the rules and regulations promulgated thereunder. The Company has
taken all actions necessary so that any “road show” (as
defined in Rule 433 under the Securities Act) in connection with
the offering of the Stock will not be required to be filed pursuant
to the Securities Act and the rules and regulations
thereunder.
2.1.2 Pursuant
to the Exchange Act. The Company has filed with the
Commission a Form 8-A (Accession No. 001-__________) providing for
the registration pursuant to Section 12(b) under the Securities
Exchange Act of 1934, as amended (the “Exchange Act”), of the shares of
Common Stock and Warrants; and such Form 8-A has become effective
under the Exchange Act. The Company has taken no action designed
to, or likely to have the effect of, terminating the registration
of the shares of Common Stock and Warrants under the Exchange Act,
nor has the Company received any notification that the Commission
is contemplating terminating such registration.
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2.1.3 Testing
the Waters Communications
(i) Each Written
Testing-the-Waters Communications did not, as of the Applicable
Time, and at all times through the completion of the public offer
and sale of the Public Securities will not, include any information
that conflicted, conflicts or will conflict with the information
contained in the Registration Statement, the Pricing Disclosure
Package or the Prospectus. Each Written Testing-the-Waters
Communication did not, as of the Applicable Time, when taken
together with the Pricing Disclosure Package, contain an untrue
statement of a material fact or 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;
provided that no
representation or warranty is made as to the Underwriters’
Information (as defined in Section 2.4.1(ii) below).
(ii) The
Company has not (a) engaged in any Testing-the-Waters Communication
other than Testing-the-Waters Communications with the consent of
the Representative with entities that are qualified institutional
buyers within the meaning of Rule 144A under the Securities Act or
institutions that are accredited investors within the meaning of
Rule 501 under the Securities Act and (b) authorized any third
party to engage in Testing-the-Waters Communications. The Company
reconfirms that the Representative has been authorized to act on
its behalf in undertaking Testing-the-Waters Communications. The
Company has not distributed any Written Testing-the-Waters
Communications other than those listed on Schedule 2-C
hereto.
(iii) From
the time of the initial confidential submission of the Registration
Statement to the Commission (or, if earlier, the first date on
which the Company engaged directly or through any person authorized
to act on its behalf in any Testing-the-Waters Communication)
through the date hereof, the Company has been and is an
“emerging growth company,” as defined in Section 2(a)
of the Securities Act (an “Emerging Growth
Company”).
2.1.4 Road
Show. The Company has filed publicly on ▇▇▇▇▇ at least 15
calendar days prior to any “road show” (as defined in
Rule 433 under the Securities Act), any confidentially submitted
registration statement and registration statement amendments
relating to the offer and sale of the Public
Securities.
2.2 Stock
Exchange Listing. Each of the
shares of Common Stock and Warrants has been approved for listing
on The Nasdaq Capital Market (the “NasdaqCM”), subject only to official notice of
issuance.
2.3 No
Stop Orders, etc. No stop order
suspending the effectiveness of the Initial Registration Statement,
any post-effective amendment thereto or the Rule 462(b)
Registration Statement, if any, has been issued and no proceeding
for that purpose has been initiated or, to the Company’s
knowledge, threatened by the Commission. No order preventing or
suspending the use of any Preliminary Prospectus or the Prospectus
has been issued and no proceeding for that purpose has been
initiated or, to the Company’s knowledge, threatened by the
Commission. The Company has complied in all material respects with
each request (if any) from the Commission for additional
information.
2.4 Disclosures
in Registration Statement.
2.4.1 Compliance
with Securities Act and 10b-5 Representation.
(i) Each of the
Registration Statement and any post-effective amendment thereto, at
the time it became effective, complied in all material respects
with the requirements of the Securities Act and the rules and
regulations of the Commission thereunder (the “Securities Act Regulations”). Each
Preliminary Prospectus, the Prospectus and any amendment or
supplement thereto, at the time each was filed with the Commission,
complied in all material respects with the requirements of the
Securities Act and the Securities Act Regulations. Each Preliminary
Prospectus delivered to the Underwriters for use in connection with
this offering and the Prospectus was or will be identical to the
electronically transmitted copies thereof filed with the Commission
pursuant to ▇▇▇▇▇, except to the extent permitted by Regulation
S-T.
-5-
(ii) The
Registration Statement, when it became effective, did not contain
and, as amended or supplemented, if applicable, will not contain,
as of the date of such amendment or supplement, an untrue statement
of a material fact or omitted or will omit to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading; provided, however, that this representation
and warranty shall not apply to any information contained in or
omitted from the Registration Statement or any amendment thereto in
reliance upon and in conformity with information furnished in
writing to the Company by or on behalf of any Underwriter through
the Representative specifically for use therein (collectively, the
“Underwriters’
Information”). The parties acknowledge and agree that
such information provided by or on behalf of any Underwriter
consists solely of the following disclosure contained in the
“Underwriting” section of the Prospectus: (i) the
tables showing the number of securities to be purchased by each
Underwriter, (ii) the first paragraph under the caption
“Discounts and Commissions” and (iii) paragraphs under
the captions “Discretionary Accounts,”
“Stabilization,” “Passive Market Making,”
“Electronic Offer, Sale and Distribution of Shares,”
“Other Relationships” and “Market
Information”
(iii) The
Pricing Disclosure Package, as of the Applicable Time, did not
contain an untrue statement of a material fact or 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 Prospectus will not, as of its date, as of the
Closing Date or as of any Option Closing Date, contain an untrue
statement of a material fact or 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. Each
Issuer Free Writing Prospectus complies in all material respects
with the applicable provisions of the Securities Act and the
Securities Act Regulations, and does not conflict with the
information contained in the Registration Statement, the Pricing
Prospectus or the Prospectus, and each Issuer Free Writing
Prospectus listed in Schedule 2-B hereto, as
supplemented by and taken together with the Pricing Disclosure
Package did not, as of the Applicable Time, contain an untrue
statement of a material fact or 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.
Notwithstanding the foregoing, the representations and warranties
set forth in this Section 2.4.1(iii) shall not apply with respect
to the Underwriters’ Information.
2.4.2 Disclosure
of Agreements. The agreements and documents described in the
Registration Statement, the Pricing Disclosure Package and the
Prospectus conform in all material respects to the descriptions
thereof contained therein and there are no agreements or other
documents required by the Securities Act and the Securities Act
Regulations to be described in the Registration Statement, the
Pricing Disclosure Package and the Prospectus or to be filed with
the Commission as exhibits to the Registration Statement, that have
not been so described or filed. Each agreement or other instrument
(however characterized or described) to which either the Company is
a party or by which the Company is or may be bound or affected and
(i) that is referred to in the Registration Statement, the Pricing
Disclosure Package and the Prospectus, or (ii) is material to the
Company’s business, has been duly authorized and validly
executed by the Company, as the case may be, is in full force and
effect in all material respects and is enforceable against the
Company, or as the case may be, and, to the Company’s
knowledge, the other parties thereto, in accordance with its terms,
except (x) as such enforceability may be limited by
bankruptcy, insolvency, reorganization or similar laws affecting
creditors’ rights generally, (y) as enforceability of
any indemnification or contribution provision may be limited under
the federal and state securities laws, and (z) that the remedy
of specific performance and injunctive and other forms of equitable
relief may be subject to the equitable defenses and to the
discretion of the court before which any proceeding therefor may be
brought. None of such agreements or instruments has been assigned
by the Company, and neither the Company nor, to the Company’s
knowledge, any other party is in default thereunder and no event
has occurred that, with the lapse of time or the giving of notice,
or both, would constitute a default thereunder. To the best of the
Company’s knowledge, performance by the Company of the
material provisions of such agreements or instruments will not
result in a violation of any existing applicable law, rule,
regulation, judgment, order or decree of any governmental,
judicial, regulatory or administrative agency, body or court,
domestic or foreign, having jurisdiction over the Company or any of
their assets or business (each, a “Governmental Entity”), including,
without limitation, those relating to environmental laws and
regulations.
2.4.3 Prior
Securities Transactions. Since May 1, 2018 [NTD: there is a
three year lookback on the Recent Sales of Unregistered
Securities], no securities of the Company have been sold by the
Company or by or on behalf of, or for the benefit of, any person or
persons controlling, controlled by or under common control with the
Company, except as disclosed in the Registration Statement, the
Pricing Disclosure Package and the Preliminary
Prospectus.
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2.4.4 Regulations.
The statements set forth in the Pricing Prospectus and Prospectus
under the caption “Description of Our Securities”,
insofar as it purports to constitute a summary of the terms of the
Common Stock and the Warrants, and under the captions “Shares
Eligible for Future Sale,”, “Certain Relationships and
Related Person Transactions,” “Prospectus Summary
—Implications of Being an Emerging Growth Company”,
“Business—Legal Proceedings,”
“Business—Intellectual Property,”
“Underwriting,” “Risk Factors” and the
statements in the Registration Statement under Item 14 thereof,
insofar as they purport to describe the provisions of the laws and
documents referred to therein, are accurate, complete and fair in
all material respects.
2.4.5 No
Other Distribution of Offering Materials. The Company has
not, directly or indirectly, distributed and will not distribute
any offering material in connection with the Offering other than
any Preliminary Prospectus, the Prospectus and other materials, if
any, permitted under the Securities Act and consistent with Section
3.2 below.
2.5 Changes
After Dates in Registration Statement. Since the respective dates as of which information
is given in the Registration Statement, the Pricing Disclosure
Package and the Prospectus, except as otherwise specifically stated
therein: (i) there has been no material adverse change in the
financial position or results of operations of the Company, nor any
change or development that, singularly or in the aggregate, would
involve a material adverse change or a prospective material adverse
change, in or affecting the condition (financial or otherwise),
results of operations, business, assets or prospects of the Company
and its Subsidiaries (as defined below) taken as a whole (a
“Material Adverse
Change”); (ii) there
have been no material transactions entered into by the Company,
other than as contemplated pursuant to this Agreement; (iii) there
has not been any material change in the capital stock or long-term
or short-term debt of the Company, (iv) there have been no
transactions entered into by the Company, other than in the
ordinary course of business, which are material with respect to the
Company, individually or taken as a whole, (v) the Company has not
sustained any material loss or interference with its business or
properties from fire, explosion, flood, earthquake, hurricane,
accident or other calamity, whether or not covered by insurance, or
from any labor dispute or any legal or governmental proceeding and
(vi) no officer or director of the Company has resigned from any
position with the Company. Since the date of the latest balance
sheet included in the Registration Statement, the Pricing
Disclosure Package or the Prospectus, neither the Company nor any
Subsidiary has incurred or undertaken any liabilities or
obligations, whether direct or indirect, liquidated or contingent,
matured or unmatured, or entered into any transactions, including
any acquisition or disposition of any business or asset, which are
material to the Company and the Subsidiaries, individually or taken
as a whole, except for liabilities, obligations and transactions
which are disclosed in the Registration Statement, the Pricing
Disclosure Package and the Prospectus.
2.6 Independent
Accountants. ▇▇▇▇▇▇▇ &
Company P.A. (the “Auditor”),
who has certified the financial statements and supporting schedules
and information of the Company that are included in the
Registration Statement, the Pricing Disclosure Package, or the
Prospectus are independent public accountants as required by the
Securities Act, the Securities Act Regulations and the rules of the
Public Company Accounting Oversight Board
(“PCAOB”). The Auditor has not, during the periods
covered by the financial statements included in the Registration
Statement, the Pricing Disclosure Package and the Prospectus,
provided to the Company any non-audit services, as such term is
used in Section 10A(g) of the Exchange Act.
-7-
2.7 Financial Statements,
etc. The financial statements,
including the notes thereto, and the supporting schedules included
in the Registration Statement, the Pricing Disclosure Package and
the Prospectus present fairly in all material respects the
consolidated financial position as of the dates indicated and the
cash flows and results of operations for the periods specified of
the Company; except as otherwise stated in the Registration
Statement, the Pricing Disclosure Package and the Prospectus, said
financial statements have been prepared in conformity with United
States generally accepted accounting principles
(“GAAP”) applied on a consistent basis throughout
the periods involved; and the supporting schedules, if any,
included in the Registration Statement, the Pricing Disclosure
Package and the Prospectus present fairly in all material respects
in accordance with GAAP the information required to be stated
therein. No other historical or pro forma financial statements or
supporting schedules are required to be included in the
Registration Statement, the Pricing Disclosure Package or the
Prospectus by the Securities Act or the Securities Act Regulations.
The other financial and statistical information included in the
Registration Statement, the Pricing Disclosure Package and the
Prospectus present fairly in all material respects the information
included therein and have been prepared on a basis consistent with
that of the financial statements that are included in the
Registration Statement, the Pricing Disclosure Package and the
Prospectus and the books and records of the respective entities
presented therein. The pro forma financial statements included in
the Registration Statement, Pricing Disclosure Package and the
Prospectus have been properly compiled and prepared in accordance
with the applicable requirements of the Securities Act and the
Securities Act Regulations and include all adjustments necessary to
present fairly in all material respects in accordance with GAAP the
pro forma financial position of the respective entity or entities
presented therein at the respective dates indicated and their cash
flows and the results of operations for the respective periods
specified. All disclosures contained in the Registration Statement,
the Pricing Disclosure Package or the Prospectus regarding
“non-GAAP financial measures” (as such term is defined
by the rules and regulations of the Commission), if any, comply
with Regulation G of the Exchange Act and Item 10 of Regulation S-K
of the Securities Act, to the extent applicable. Each of the
Registration Statement, the Pricing Disclosure Package and the
Prospectus discloses all material off-balance sheet transactions,
arrangements, obligations (including contingent obligations), and
other relationships of the Company with unconsolidated entities or
other persons that may have a material current or future effect on
the Company’s financial condition, changes in financial
condition, results of operations, liquidity, capital expenditures,
capital resources, or significant components of revenues or
expenses. Except as disclosed in the Registration Statement, the
Pricing Disclosure Package and the Prospectus, (a) neither the
Company nor any of its direct and indirect subsidiaries, including
each entity disclosed or described in the Registration Statement,
the Pricing Disclosure Package and the Prospectus as being a
subsidiary of the Company (each, a “Subsidiary” and, collectively, the
“Subsidiaries”), has incurred any material liabilities or
obligations, direct or contingent, or entered into any material
transactions other than in the ordinary course of business, (b) the
Company has not declared or paid any dividends or made any
distribution of any kind with respect to its capital stock, (c)
there has not been any change in the capital stock of the Company
or any of its Subsidiaries, or, other than in the course of
business, any grants under any stock compensation plan, and (d)
there has not been any material adverse change in the
Company’s long-term or short-term debt.
2.8 Authorized
Capital; Options, etc. The
Company had, at the date or dates indicated in the Registration
Statement, the Pricing Disclosure Package and the Prospectus, the
duly authorized, issued and outstanding capitalization as set forth
therein. Based on the assumptions stated in the Registration
Statement, the Pricing Disclosure Package and the Prospectus, the
Company will have on the Closing Date the adjusted stock
capitalization set forth therein. Except as set forth in, or
contemplated by, the Registration Statement, the Pricing Disclosure
Package and the Prospectus, on the Applicable Time, as of the
Applicable Time and on the Closing Date and any Option Closing
Date, there will be no stock options, warrants, or other rights to
purchase or otherwise acquire any authorized but unissued shares of
Common Stock of the Company or any security convertible or
exercisable into shares of Common Stock of the Company, or any
contracts or commitments to issue or sell shares of Common Stock or
any such options, warrants, rights or convertible
securities.
2.9 Valid
Issuance of Securities, etc.
2.9.1 Outstanding
Securities. All issued and outstanding securities of the
Company issued prior to the transactions contemplated by this
Agreement have been duly authorized and validly issued and are
fully paid and non-assessable; the holders thereof have no
contractual rights of rescission or put rights with respect
thereto, and are not subject to personal liability by reason of
being such holders; and none of such securities were issued in
violation of the preemptive rights, rights of first refusal or
rights of participation of any holders of any security of the
Company or similar contractual rights granted by the Company,
except for such rights as may have been fully satisfied or waived
prior to the Effective Date. The authorized shares of Common Stock
conform in all material respects to all statements relating thereto
contained in the Registration Statement, the Pricing Disclosure
Package and the Prospectus. The offers and sales of the outstanding
shares of Common Stock, options, warrants and other rights to
purchase or exchange such securities for shares of the Common Stock
as the case may be, were at all relevant times either registered
under the Securities Act and the applicable state securities or
“blue sky” laws or, based in part on the
representations and warranties of the purchasers of such shares of
Common Stock, and or holders of membership interests exempt from
such registration requirements.
-8-
2.9.2 Securities
Sold Pursuant to this Agreement. The Public Securities and
Representative’s Securities have been duly authorized for
issuance and sale and, when issued and paid for, will be validly
issued, fully paid and non-assessable; the holders thereof are not
and will not be subject to personal liability by reason of being
such holders; the Public Securities and Representative’s
Securities are not and will not be subject to the preemptive rights
of any holders of any security of the Company or similar
contractual rights granted by the Company; and all corporate action
required to be taken for the authorization, issuance and sale of
the Public Securities and Representative’s Securities has
been duly and validly taken. The Public Securities and
Representative’s Securities conform in all material respects
to all statements with respect thereto contained in the
Registration Statement, the Pricing Disclosure Package and the
Prospectus. All corporate action required to be taken for the
authorization, issuance and sale of the Warrants and
Representative’s Warrant has been duly and validly taken; the
shares of Common Stock issuable upon exercise of the Warrants and
Representative’s Warrant have been duly authorized and
reserved for issuance by all necessary corporate action on the part
of the Company and, when paid for and issued in accordance with the
Warrant Agreement and Warrants or the Representative’s
Warrant, as the case may be, such underlying shares of Common Stock
will be validly issued, fully paid and non-assessable; the holders
thereof are not and will not be subject to personal liability by
reason of being such holders; and such shares of Common Stock are
not and will not be subject to the preemptive rights of any holders
of any security of the Company or similar contractual rights
granted by the Company.
2.10 Registration
Rights of Third Parties. Except
as set forth in the Registration Statement, the Pricing Disclosure
Package and the Prospectus, no holders of any securities of the
Company or any options, warrants, rights or other securities
exercisable for or convertible or exchangeable into securities of
the Company have the right to require the Company to register any
such securities of the Company under the Securities Act or to
include any such securities in the Registration Statement or any
other registration statement to be filed by the Company, except for
any such rights so disclosed that have either been fully complied
with by the Company or effectively waived by the holders
thereof.
2.11 Validity
and Binding Effect of Agreements. The execution, delivery and performance of this
Agreement, the Warrants, the Warrant Agreement, and the
Representative’s Warrant have been duly and validly
authorized by the Company, and, this Agreement, constitute, and the
Representative’s Warrant, when executed and delivered, will
constitute, the valid and binding agreements of the Company, in
each case, enforceable against the Company in accordance with their
respective terms, except: (i) as such enforceability may be
limited by bankruptcy, insolvency, reorganization or similar laws
affecting creditors’ rights generally; (ii) as
enforceability of any indemnification or contribution provision may
be limited under the federal and state securities laws; and
(iii) that the remedy of specific performance and injunctive
and other forms of equitable relief may be subject to the equitable
defenses and to the discretion of the court before which any
proceeding therefor may be brought.
2.12 No
Conflicts, etc. The execution,
delivery and performance by the Company of this Agreement, the
Warrants, the Warrant Agreement, and the Representative’s
Warrant and all ancillary documents, the consummation by the
Company of the transactions herein and therein contemplated and the
compliance by the Company with the terms hereof and thereof, as the
case may be, do not and will not, with or without the giving of
notice or the lapse of time or both: (i) result in a material
breach of, or conflict with any of the terms and provisions of, or
constitute a material default under, or result in the creation,
modification, termination or imposition of any lien, charge,
mortgage, pledge, security interest, claim, equity, trust or other
encumbrance, preferential arrangement, defect or restriction of any
kind whatsoever (any “Lien”) upon any property or assets of the
Company pursuant to the terms of any indenture, mortgage, deed of
trust, note, lease, loan agreement or any other agreement or
instrument, franchise, license or permit to which the Company is a
party or as to which any property of the Company is a party;
(ii) result in any violation of the provisions of the
Company’s Articles of Incorporation (as the same have been
amended or restated from time to time, the
“Charter”), the by-laws of the Company (as the same
may be amended or restated from time to time) or (iii) violate
any existing applicable law, rule, regulation, ordinance,
directive, judgment, writ, order or decree of any
Governmental Entity as of the date hereof or by any foreign,
state or local Governmental Entity, except in the cases of clauses
(i) and (iii) for such breaches, conflicts or violations which
could not reasonably be expected to have a Material Adverse
Change.
-9-
2.13 No
Defaults; Violations. Except as
set forth in, or contemplated by, the Registration Statement, the
Pricing Disclosure Package and the Prospectus, the Company is not
(i) in violation of its Charter, by-laws, or other organizational
documents, (ii) in default under, and no event has occurred which,
with notice or lapse of time or both, would constitute a default
under or result in the creation or imposition of any Lien upon any
property or assets of the Company pursuant to any indenture,
mortgage, deed of trust, note, lease,
loan agreement or other agreement or instrument to which it is a
party or by which it is bound or to which any of its property or
assets is subject, or (iii) in violation of any statute, law, rule,
regulation, ordinance, directive, judgment, writ, decree or order
of any court or judicial, regulatory or other legal or Governmental
Entity, except (in the case of clauses (ii) and (iii) above) for
violations or defaults that could not (individually or in the
aggregate) reasonably be expected to have a Material Adverse Effect
(as defined in Section 2.17 below).
2.14 Corporate
Power; Licenses; Authorizations.
2.14.1 Conduct
of Business. The Company has all requisite power and
authority, and all necessary consents, approvals, authorizations,
orders, registrations, qualifications, licenses, filings and
permits of, with and from all Governmental Entities and all third
parties, foreign and domestic (collectively, the
“Authorizations”),
to own, lease and operate its properties and conduct its business
as it is now being conducted and as disclosed in the Registration
Statement, the Pricing Disclosure Package and the Prospectus, and
each such Authorization is valid and in full force and effect,
except in each case as could not reasonably be expected to have a
Material Adverse Effect. The Company has not received notice of any
investigation or proceedings which, if decided adversely to the
Company, could reasonably be expected to result in, the revocation
of, or imposition of a materially burdensome restriction on, any
such Authorization.
2.14.2 Transactions
Contemplated Herein. The Company has or, at the time of
execution, had all corporate power and authority to enter into this
Agreement, the Warrants, the Warrant Agreement, and the
Representative’s Warrant and to carry out the provisions and
conditions hereof, and all Authorizations required in connection
therewith have been obtained. No Authorization of, and no filing
with, Governmental Entity is required for the valid issuance, sale
and delivery of the Public Securities and the consummation of the
transactions and agreements contemplated by this Agreement, the
Warrant Agreement and the Representative’s Warrant Agreement
and as contemplated by the Registration Statement, the Pricing
Disclosure Package and the Prospectus, except as may be required
under state securities or blue sky laws or the by-laws the rules
and regulations of the Financial Industry Regulatory Authority,
Inc. (“FINRA”)
in connection with the purchase and distribution of the Public
Securities by the Underwriters, each of which has been obtained and
is in full force and effect.
2.15 D&O
Information. To the
Company’s knowledge, all information concerning the
Company’s directors, officers and principal stockholders as
described in the Registration Statement, the Pricing Disclosure
Package and the Prospectus, provided to the Underwriters is true
and correct in all material respects and the Company has not become
aware of any information which would cause the information
disclosed in the Registration Statement, the Pricing Disclosure
Package and the Prospectus to become inaccurate and incorrect in
any material respect.
2.16 Litigation;
Governmental Proceedings.
Except as disclosed in the Registration Statement, the Pricing
Disclosure Package and the Prospectus, there is no judicial,
regulatory, arbitral or other legal or governmental proceeding or
other litigation or arbitration, domestic or foreign, pending to
which the Company is a party or of which any property, operations
or assets of the Company is the subject which, individually or in
the aggregate, if determined adversely to the Company, could
reasonably be expected to have a Material Adverse Effect, or which
might materially and adversely affect the consummation of the
transactions contemplated in this Agreement or the performance by
the Company of its respective obligations hereunder; to the
Company’s knowledge, no such proceeding, litigation or
arbitration is threatened or contemplated; and the defense of all
such proceedings, litigation and arbitration against or involving
the Company could not reasonably be expected to have a Material
Adverse Effect.
-10-
2.17 Good
Standing. The Company has been
duly organized and is validly existing as a corporation and is in
good standing under the laws of its jurisdiction of incorporation.
The Company is duly qualified to do business and is in good
standing as a foreign corporation in each jurisdiction in which the
character or location of its properties (owned, leased or licensed)
or the nature or conduct of its business makes such qualification
necessary, except for those failures to be so qualified or in good
standing which (individually and in the aggregate) could not
reasonably be expected to have a material adverse effect on (i) the
business, general affairs, management, condition (financial or
otherwise), results of operations, stockholders’ equity,
properties or prospects of the Company and the Subsidiaries, when
taken as a whole; or (ii) the ability of the Company to consummate
the Offering or any other transaction contemplated by this
Agreement or the Registration Statement, the Pricing Disclosure
Package and the Prospectus (collectively, a
“Material Adverse
Effect”). The Charter,
and by-laws, or other constitutive and organizational documents of
the Company comply with the requirements of applicable law and are
in full force and effect.
2.18 Insurance.
The Company maintains insurance in such amounts and covering such
risks as the Company reasonably considers 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 of which insurance is in full force and effect, except where
the failure to maintain such insurance could not reasonably be
expected to have a Material Adverse Effect. In furtherance of the foregoing, the
Company carries (or will carry at the Closing Date) and is entitled
to the benefits of directors and officers insurance coverage at
least equal to $2,000,000. There are
no material claims by the Company under any such policy or
instrument as to which any insurance company is denying liability
or defending under a reservation of rights clause. The Company
reasonably believes that it will be able to renew its existing
insurance as and when such coverage expires or will be able to
obtain replacement insurance adequate for the conduct of the
business and the value of its properties at a cost that would not
have a Material Adverse Effect.
2.19 Transactions
Affecting Disclosure to FINRA.
2.19.1 Finder’s
Fees. Except as described in the Registration Statement, the
Pricing Disclosure Package and the Prospectus, there are no claims,
payments, contracts, arrangements, agreements or understandings
between the Company and any person that would give rise to a valid
claim against the Company or any Underwriter for a brokerage
commission, finder’s fee or other like payment in connection
with the transactions contemplated by this Agreement or, to the
Company’s knowledge, any arrangements, agreements,
understandings, payments or issuance with respect to the Company or
any of its officers, directors, stockholders, partners, employees
or affiliates that may affect the Underwriters’ compensation
as determined by FINRA.
2.19.2 Payments
Within Six (6) Months. Except as described in the
Registration Statement, the Pricing Disclosure Package and the
Prospectus, the Company has not made any direct or indirect
payments (in cash, securities or otherwise) to: (i) any
person, as a finder’s fee, consulting fee or otherwise, in
consideration of such person raising capital for the Company or
introducing to the Company persons who raised or provided capital
to the Company; (ii) any FINRA member; or (iii) any person or
entity that has any direct or indirect affiliation or association
with any FINRA member, within the six (6) months prior to the
initial filing of the Registration Statement, other than the
payment to the Underwriters as provided hereunder in connection
with the Offering.
2.19.3 Use
of Proceeds. None of the net proceeds of the Offering will
be paid by the Company to any participating FINRA member or its
affiliates, except as specifically described in the Registration
Statement.
2.19.4 FINRA
Affiliation. Except as described in the Registration
Statement, the Pricing Disclosure Package and the Prospectus, there
is no (i) officer or director of the Company, (ii) beneficial owner
of 5% or more of any class of the Company’s securities or
(iii) beneficial owner of the Company’s unregistered equity
securities which were acquired during the 180-day period
immediately preceding the filing of the Registration Statement that
is an affiliate or associated person of a FINRA member
participating in the Offering (as determined in accordance with the
rules and regulations of FINRA). Except as disclosed in the
Registration Statement, the Pricing Disclosure Package and the
Prospectus, the Company (i) does not have any material lending or
other relationship with any bank or lending affiliate of any
Underwriter and (ii) does not intend to use any of the proceeds
from the sale of the Public Securities to repay any outstanding
debt owed to any affiliate of any Underwriter.
-11-
2.19.5 Information.
All information provided by the Company in the FINRA questionnaire
to Representative’s Counsel specifically for use by
Representative’s Counsel in connection with its Public
Offering System filings (and related disclosure) with FINRA is
true, correct and complete in all material respects.
2.20 Foreign
Corrupt Practices Act. None of
the Company, any director or officer of the Company, or, to the
knowledge of the Company, any agent, employee, affiliate or other
person acting on behalf of the Company, has (i) made any unlawful
contribution, gift, entertainment or other unlawful expense
relating to political activity; (ii) made any direct or indirect
unlawful payment to any domestic governmental official,
“foreign official” (as defined in the U.S. Foreign
Corrupt Practices Act of 1977, as amended, and the rules and
regulations thereunder (collectively, the
“FCPA”)
or employee; (iii) violated or is in violation of any provision of
the FCPA or any applicable non-U.S. anti-bribery statute or
regulation; (iv) made any bribe, rebate, payoff, influence payment,
kickback or other unlawful payment; and (v) received notice of any
investigation, proceeding or inquiry by any Governmental Entity
regarding any of the matters in clauses (i)-(iv) above; and the
Company and, to the knowledge of the Company, the Company’s
affiliates have conducted their respective businesses in compliance
with the FCPA and have instituted and maintain policies and
procedures designed to ensure, and which are reasonably expected to
continue to ensure, continued compliance
therewith.
2.21 Compliance
with OFAC. None of the Company,
any director or officer of the Company or, to the knowledge of the
Company, any agent, employee, affiliate or other person acting on
behalf of the Company, is currently the subject or target of any
sanctions administered or enforced by the United States Government,
including, without limitation, the U.S. Department of the
Treasury’s Office of Foreign Assets Control
(“OFAC”), the U.S. Department of State, the United
Nations Security Council, the European Union, Her Majesty’s
Treasury, or other relevant sanctions authority (collectively,
“Sanctions”), nor is the Company located, organized or
resident in a country or territory that is the subject of
Sanctions; and the Company will not directly or indirectly use the
proceeds of the offering, or lend, contribute or otherwise make
available such proceeds to any joint venture partner or other
person or entity, for the purpose of financing the activities of or
business with any person, or in any country or territory, that
currently is the subject or target of any U.S. sanctions
administered by OFAC or in any other manner that will result in a
violation by any person (including any person participating in the
transaction whether as underwriter, advisor, investor or otherwise)
of Sanctions.
2.22 Money
Laundering Laws. The operations
of the Company are and have been conducted at all times in
compliance with applicable financial record-keeping and reporting
requirements of the Currency and Foreign Transactions Reporting Act
of 1970, as amended, the money laundering statutes of all
applicable jurisdictions, the rules and regulations thereunder and
any related or similar rules, regulations or guidelines issued,
administered or enforced by any Governmental Entity (collectively,
the “Money Laundering
Laws”) and no action,
suit or proceeding by or before any Governmental Entity or any
arbitrator involving the Company with respect to the Money
Laundering Laws is pending or, to the best knowledge of the
Company, threatened.
2.23 Forward-Looking
Statements. No forward-looking
statement (within the meaning of Section 27A of the Securities Act
and Section 21E of the Exchange Act) contained in either the
Registration Statement, Pricing Disclosure Package or the
Prospectus has been made or reaffirmed without a reasonable basis
or has been disclosed other than in good faith.
2.24 Officers’
Certificate. Any certificate
signed by any duly authorized officer of the Company and delivered
to you or to Representative’s Counsel shall be deemed a
representation and warranty by the Company to the Underwriters as
to the matters covered thereby.
2.25 Lock-Up
Agreements.
Schedule
3 hereto contains a complete
and accurate list of each of the Company’s officers,
directors and each owner of 5% of the Company’s outstanding
shares of Common Stock (or securities convertible into or
exercisable for shares of Common Stock) (collectively, the
“Lock-Up
Parties”). The Company
has caused each of the Lock-Up Parties to deliver to the
Representative an executed Lock-Up Agreement, in the form attached
hereto as Exhibit
B (the “Lock-Up
Agreement”), prior to the
execution of this Agreement.
2.26 Subsidiaries.
All direct and indirect Subsidiaries of the Company are duly
organized and in good standing under the laws of the place of
organization or incorporation, and each Subsidiary is in good
standing in each jurisdiction in which its ownership or lease of
property or the conduct of business requires such qualification,
except where the failure to qualify would not have a Material
Adverse Effect. The Company’s ownership and control of each
Subsidiary is as described in the Registration Statement, the
Pricing Disclosure Package and the Prospectus
-12-
2.27 Related
Party Transactions.
2.27.1 Business
Relationships. Except as set
forth in, or contemplated by, the Registration Statement, the
Pricing Disclosure Package and the Prospectus, there are no
material business relationships or related party transactions
involving the Company or any other person required to be described
in the Pricing Disclosure Package and the Prospectus that have not
been described. Without limiting the generality of the immediately
preceding sentence, no relationship, direct or indirect, exists
between or among the Company on the one hand, and the directors,
officers, stockholders managers or members of the Company on the
other hand, that is required to be described in the Pricing
Disclosure Package and the Prospectus and that is not so described.
Except as described in the Registration Statement, Pricing
Disclosure Package and the Prospectus, since March 31, 2019 [NTD:
this is when the merger with Recruiter took place], the Company has
not directly or indirectly, extended or maintained credit, arranged
to extend credit, or renewed any extension of credit, in the form
of a personal loan, to or for any director, executive officer of
the Company, or to or for any family member or affiliate of any
director or executive officer of the Company.
2.27.2 No
Relationships with Customers and Suppliers. No relationship,
direct or indirect, exists between or among the Company or any of
its Subsidiaries, on the one hand, and the directors, officers,
stockholders, customers or suppliers of the Company, its
Subsidiaries or any of the Company’s affiliates, on the other
hand, which is required to be described in the Pricing Disclosure
Package and the Prospectus or a document incorporated by reference
therein and which is not so described.
2.27.3 No
Unconsolidated Entities. There are no transactions,
arrangements or other relationships between and/or among the
Company, any of its affiliates (as such term is defined in Rule 405
of the Securities Act) and any unconsolidated entity, including,
but not limited to, any structure finance, special purpose or
limited purpose entity that could reasonably be expected to
materially affect the Company’s liquidity or the availability
of or requirements for its capital resources required to be
described in the Pricing Disclosure Package and the Prospectus or a
document incorporated by reference therein which have not been
described as required.
2.27.4 No
Loans or Advances to Affiliates. There are no outstanding
loans, advances (except normal advances for business expenses in
the ordinary course of business) or guarantees or indebtedness by
the Company or any Subsidiary to or for the benefit of any of the
officers or directors of the Company or any of their respective
family members, except as disclosed in the Registration Statement,
the Pricing Disclosure Package and the Prospectus.
2.28 Board
of Directors. The Board of
Directors of the Company is, and on the Closing Date, will be
comprised of the persons set forth under the heading of the Pricing
Prospectus and the Prospectus captioned “Management.”
The qualifications of the persons serving as board members and the
overall composition of the board comply with the Exchange Act and
the rules and regulations of the Commission promulgated thereunder
(the “Exchange Act
Regulations”), the
▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002 and the rules promulgated thereunder
(the “▇▇▇▇▇▇▇▇-▇▇▇▇▇
Act”) applicable to the
Company and the listing rules of the Nasdaq Stock Market LLC. At
least one member of the Audit Committee of the Board of Directors
of the Company qualifies, and at the Closing Date, will qualify as
an “audit committee financial expert,” as such term is
defined under Regulation S-K and the listing rules of the Nasdaq
Stock Market LLC. In addition, at least a majority of the persons
serving on the Board of Directors qualify as
“independent,” as defined under the listing rules of
the Nasdaq Stock Market LLC.
2.29 ▇▇▇▇▇▇▇▇-▇▇▇▇▇
Compliance.
2.29.1 Disclosure
Controls. Except as set forth in the Registration Statement,
Pricing Disclosure Package and the Prospectus, the Company has
developed and maintains disclosure controls and procedures (as such
term is defined in Rule 13a-15(e) under the Exchange Act
Regulations) that comply with the requirements of the Exchange Act;
such disclosure controls and procedures will be designed to ensure
that material information relating to the Company is made known to
the Company’s principal executive officer and principal
financial officer by others within those entities; and so that such
disclosure controls and procedures are effective.
-13-
2.29.2 Compliance.
Except as set forth in the Registration Statement, Pricing
Disclosure Package and the Prospectus, the Company has taken the
necessary actions to ensure that, upon the effectiveness of the
Registration Statement, it will be in compliance with all
provisions of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act with which the Company is
required to comply as of the effectiveness of the Registration
Statement, and is taking all steps necessary to ensure that it will
at all times be in compliance with other provisions of the
▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act as and when the same become applicable to the
Company after the effectiveness of the Registration
Statement.
2.30 Accounting
Controls. The Company maintains
a system of “internal control over financial reporting”
(as defined under Rules 13a-15(f) under the Exchange Act
Regulations) that complies with the requirements of the Exchange
Act and have been designed by, or under the supervision of, their
respective principal executive and principal financial officers, or
persons performing similar functions, to provide reasonable
assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in
accordance with GAAP, including, but not limited to, internal
accounting controls sufficient to provide reasonable assurance that
(i) transactions are executed in accordance with management’s
general or specific authorizations; (ii) transactions are recorded
as necessary to permit preparation of financial statements in
conformity with GAAP and to maintain asset accountability; (iii)
access to assets is permitted only in accordance with
management’s general or specific authorization; and (iv) the
recorded accountability for assets is compared with the existing
assets at reasonable intervals and appropriate action is taken with
respect to any differences. Except as disclosed in the Registration
Statement, the Pricing Disclosure Package and the Prospectus, the
Company is not aware of any material weaknesses in its internal
controls. The Company’s auditors and the Audit Committee of
the Board of Directors of the Company have been advised of: (i) all
significant deficiencies and material weaknesses in the design or
operation of internal controls over financial reporting which are
known to the Company’s management and that have adversely
affected or are reasonably likely to adversely affect the ability
of the Company to record, process, summarize and report financial
information; and (ii) any fraud known to the Company’s
management, whether or not material, that involves management or
other employees who have a significant role in the Company’s
internal controls over financial reporting. Since the date of the
latest audited financial statements included in the Pricing
Disclosure Package, there has been no change in the Company’s
internal control over financial reporting that has materially
affected, or is reasonably likely to materially affect, the
Company’s internal control over financial
reporting.
2.31 No
Investment Company Status. The
Company is not and, at all times up to and including consummation
of the transactions contemplated by this Agreement, and after
giving effect to application of the net proceeds of the Offering as
described in the Pricing Disclosure Package and the Prospectus,
will not be, required to register as an “investment
company” under the Investment Company Act of 1940, as
amended, and is not and will not be an entity
“controlled” by an “investment company”
within the meaning of such act.
2.32 No
Labor Disputes. No labor
disturbance by the employees of the Company exists or, to the best
of the Company’s knowledge, is imminent and the Company is
not aware of any existing or imminent labor disturbances by the
employees of any of its principal suppliers,
manufacturers’ customers
or contractors, which, in either case (individually or in the
aggregate), could reasonably be expected to have a Material Adverse
Effect.
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2.33 Intellectual
Property Rights.
(i) The Company and
each of its Subsidiaries owns or possesses or has valid rights to
use all patents, patent applications, trademarks, service marks,
trade names, trademark registrations, service ▇▇▇▇ registrations,
copyrights, licenses, inventions, trade secrets and similar rights
(“Intellectual Property
Rights”) described in the Registration Statement, the
Pricing Disclosure Package and the Prospectus and necessary for the
conduct of the business of the Company and its Subsidiaries as
currently carried on and as described in the Registration
Statement, the Pricing Disclosure Package and the Prospectus. To
the knowledge of the Company, no action or use by the Company or
any of its Subsidiaries necessary for the conduct of its business
as currently carried on and as described in the Registration
Statement and the Prospectus will involve or give rise to any
infringement of, or license or similar fees for, any Intellectual
Property Rights of others. Neither the Company nor any of its
Subsidiaries has received any notice alleging any such
infringement, fee or conflict with asserted Intellectual Property
Rights of others. Except as would not reasonably be expected to
result, individually or in the aggregate, in a Material Adverse
Change (A) to the knowledge of the Company, there is no
infringement, misappropriation or violation by third parties of any
of the Intellectual Property Rights owned by the Company; (B) there
is no pending or, to the knowledge of the Company, threatened
action, suit, proceeding or claim by others challenging the rights
of the Company in or to any such Intellectual Property Rights, and
the Company is unaware of any facts which would form a reasonable
basis for any such claim, that would, individually or in the
aggregate, together with any other claims in this Section 2.33,
reasonably be expected to result in a Material Adverse Change; (C)
the Intellectual Property Rights owned by the Company and, to the
knowledge of the Company, the Intellectual Property Rights licensed
to the Company have not been adjudged by a court of competent
jurisdiction invalid or unenforceable, in whole or in part, and
there is no pending or, to the Company’s knowledge,
threatened action, suit, proceeding or claim by others challenging
the validity or scope of any such Intellectual Property Rights, and
the Company is unaware of any facts which would form a reasonable
basis for any such claim that would, individually or in the
aggregate, together with any other claims in this Section 2.33,
reasonably be expected to result in a Material Adverse Change; (D)
there is no pending or, to the Company’s knowledge,
threatened action, suit, proceeding or claim by others that the
Company infringes, misappropriates or otherwise violates any
Intellectual Property Rights or other proprietary rights of others,
the Company has not received any written notice of such claim and
the Company is unaware of any other facts which would form a
reasonable basis for any such claim that would, individually or in
the aggregate, together with any other claims in this Section 2.33,
reasonably be expected to result in a Material Adverse Change; and
(E) to the Company’s knowledge, no employee of the Company is
in or has ever been in violation in any material respect 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, or actions undertaken by the employee while employed
with the Company and could reasonably be expected to result,
individually or in the aggregate, in a Material Adverse Change. To
the Company’s knowledge, all material technical information
developed by and belonging to the Company which has not been
patented has been kept confidential. The Company is not a party to
or bound by any options, licenses or agreements with respect to the
Intellectual Property Rights of any other person or entity that are
required to be set forth in the Registration Statement, the Pricing
Disclosure Package and the Prospectus and are not described
therein. The Registration Statement, the Pricing Disclosure Package
and the Prospectus contain in all material respects the same
description of the matters set forth in the preceding sentence.
None of the technology employed by the Company has been obtained or
is being used by the Company in violation of any contractual
obligation binding on the Company or, to the Company’s
knowledge, any of its officers, directors or employees, or
otherwise in violation of the rights of any persons.
(ii) All
licenses for the use of the Intellectual Property described in the
Registration Statement, the Pricing Disclosure Package and the
Prospectus are in full force and effect in all material respects
and are enforceable by the Company and, to the Company’s
knowledge, the other parties thereto, in accordance with their
terms, except (x) as such enforceability may be limited by
bankruptcy, insolvency, reorganization or similar laws affecting
creditors’ rights generally, (y) as enforceability of any
indemnification or contribution provision may be limited under the
federal and state securities laws, and (z) that the remedy of
specific performance and injunctive and other forms of equitable
relief may be subject to the equitable defenses and to the
discretion of the court before which any proceeding therefor may be
brought. None of such agreements or instruments has been assigned
by the Company and to the Company’s knowledge, no other party
is in default thereunder and, to the Company’s knowledge, no
event has occurred that, with the lapse of time or the giving of
notice, or both, would constitute a default
thereunder.
-15-
2.34 Taxes.
Each of the Company and its Subsidiaries has filed all returns (as
hereinafter defined) required to be filed with taxing authorities
prior to the date hereof or has duly obtained extensions of time
for the filing thereof. Each of the Company and its Subsidiaries
has paid all taxes (as hereinafter defined) shown as due and
payable on such returns that were filed and has paid all taxes
imposed on or assessed against the Company or such respective
Subsidiary, except for assessments against which appeals have been
or will be promptly taken and as to which adequate reserves have
been provided. The provisions for taxes payable, if any, shown on
the financial statements filed with or as part of the Registration
Statement are sufficient for all accrued and unpaid taxes, whether
or not disputed, and for all periods to and including the dates of
such consolidated financial statements. Except as disclosed in
writing to the Underwriters, (i) no issues have been raised (and
are currently pending) by any taxing authority in connection with
any of the returns or taxes asserted as due from the Company or its
Subsidiaries, and (ii) no waivers of statutes of limitation with
respect to the returns or collection of taxes have been given by or
requested from the Company or its Subsidiaries. The term
“taxes” means all federal, state, local, foreign and
other net income, gross income, gross receipts, sales, use, ad
valorem, transfer, franchise, profits, license, lease, service,
service use, withholding, payroll, employment, excise, severance,
stamp, occupation, premium, property, windfall profits, customs,
duties or other taxes, fees, assessments or charges of any kind
whatever, together with any interest and any penalties, additions
to tax or additional amounts with respect thereto. The term
“returns” means all returns, declarations, reports,
statements and other documents required to be filed in respect to
taxes.
2.35 ERISA
Compliance. (i) Each
“employee benefit plan” (within the meaning of Section
3(3) of the Employee Retirement Security Act of 1974, as amended
(“ERISA”)) for which the Company or any member of
its “Controlled Group” (defined as any organization
which is a member of a controlled group of corporations within the
meaning of Section 414 of the Internal Revenue Code of 1986, as
amended (the “Code”)) would have any liability (each a
“Plan”) has been maintained in compliance in all
material respects with its terms and with the requirements of all
applicable statutes, rules and regulations including ERISA and the
Code; (ii) no prohibited transaction, within the meaning of Section
406 of ERISA or Section 4975 of the Code, has occurred with respect
to any Plan excluding transactions effected pursuant to a statutory
or administrative exemption; (iii) with respect to each Plan
subject to Title IV of ERISA (A) no “reportable event”
(within the meaning of Section 4043(c) of ERISA) has occurred or is
reasonably expected to occur, (B) no “accumulated funding
deficiency” (within the meaning of Section 302 of ERISA or
Section 412 of the Code), whether or not waived, has occurred or is
reasonably expected to occur, (C) the fair market value of the
assets under each Plan exceeds the present value of all benefits
accrued under such Plan (determined based on those assumptions used
to fund such Plan), and (D) neither the Company or any member of
its Controlled Group has incurred, or reasonably expects to incur,
any liability under Title IV of ERISA (other than contributions to
the Plan or premiums to the Pension Benefit Guaranty Corporation in
the ordinary course and without default) in respect of a Plan
(including a “multiemployer plan,” within the meaning
of Section 4001(c)(3) of ERISA); and (iv) each Plan that is
intended to be qualified under Section 401(a) of the Code is so
qualified and nothing has occurred, whether by action or by failure
to act, which would cause the loss of such
qualification.
2.36 Compliance
with Laws. The Company: (i) is
in compliance with all statutes, rules, or regulations applicable
to the Company’s business and operation, including without
limitation all foreign, federal, state and local laws relating to
taxes, environmental protection, occupational health and safety,
product quality and safety and employment and labor matters
(“Applicable
Laws”), except as could
not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Change; (ii) has not received any warning
letter, untitled letter or other correspondence or notice from any
other governmental authority alleging or asserting noncompliance
with any Applicable Laws or any licenses, certificates, approvals,
clearances, authorizations, permits and supplements or amendments
thereto required by any such Applicable Laws
(“Authorizations”);
(iii) possesses all material Authorizations and such Authorizations
are valid and in full force and effect and are not in material
violation of any term of any such Authorizations; (iv) has not
received notice of any claim, action, suit, proceeding, hearing,
enforcement, investigation, arbitration or other action from any
governmental authority or third party alleging that any product
operation or activity is in violation of any Applicable Laws or
Authorizations and has no knowledge that any such governmental
authority or third party is considering any such claim, litigation,
arbitration, action, suit, investigation or proceeding; (v) has not
received notice that any governmental authority has taken, is
taking or intends to take action to limit, suspend, modify or
revoke any Authorizations and has no knowledge that any such
governmental authority is considering such action; and (vi) has
filed, obtained, maintained or submitted all material reports,
documents, forms, notices, applications, records, claims,
submissions and supplements or amendments as required by any
Applicable Laws or Authorizations and that all such reports,
documents, forms, notices, applications, records, claims,
submissions and supplements or amendments were complete and correct
on the date filed (or were corrected or supplemented by a
subsequent submission).
-16-
2.37 Smaller
Reporting Company. As of
the time of filing of the Registration Statement, the Company was a
“smaller reporting company,” as defined in
Rule 12b-2 of the Exchange Act
Regulations.
2.38 [Reserved].
2.39 Industry
Data The statistical, industry
related and market-related data included in each of the
Registration Statement, the Pricing Disclosure Package and the
Prospectus are based on or derived from sources that the Company
reasonably and in good faith believes are reliable and accurate or
represent the Company’s good faith estimates that are made on
the basis of data derived from such sources, and such data agree
with the sources from which they are derived.
2.40 Margin
Securities. The Company does
not own any “margin securities” as that term is defined
in Regulation U of the Board of Governors of the Federal Reserve
System (the “Federal Reserve
Board”), and none of the
proceeds of the Offering will be used, directly or indirectly, for
the purpose of purchasing or carrying any margin security, for the
purpose of reducing or retiring any indebtedness which was
originally incurred to purchase or carry any margin security or for
any other purpose which might cause any of the shares of Common
Stock to be considered a “purpose credit” within the
meanings of Regulation T, U or X of the Federal Reserve
Board.
2.41 Integration.
Neither the Company nor any of its affiliates, nor any person
acting on its or their behalf has, directly or indirectly, made any
offers or sales of any security or solicited any offers to buy any
security, under circumstances that would cause the Offering to be
integrated with prior offerings by the Company for purposes of the
Securities Act that would require the registration of any such
securities under the Securities Act.
2.42 Title
to Real and Personal Property.
The Company owns or leases all such properties as are necessary to
the conduct of its business as presently operated and as proposed
to be operated as described in the Registration Statement, the
Pricing Disclosure Package and the Prospectus. The Company has good
and marketable title in fee simple to all real property and good
and marketable title to all personal property owned by it, in each
case free and clear of any and all Liens except such as are
described in the Registration Statement, the Pricing Disclosure
Package and the Prospectus or such as do not (individually or in
the aggregate) materially affect the value of such property or
materially interfere with the use made or proposed to be made of
such property by the Company; and any real property and buildings
held under lease or sublease by the Company are held by them under
valid, subsisting and enforceable leases with such exceptions as
are not material to, and do not materially interfere with, the use
made and proposed to be made of such property and buildings by the
Company. The Company has not received any notice of any claim
adverse to its ownership of any real or personal property or of any
claim against the continued possession of any real property,
whether owned or held under lease or sublease by the
Company.
2.43 Confidentiality
and Non-Competitions. To the
Company’s knowledge, no director, officer, key employee or
consultant of the Company is subject to any confidentiality,
non-disclosure, non-competition agreement or non-solicitation
agreement with any employer or prior employer that could
materially affect his ability to be
and act in his respective capacity of the Company or be expected to
result in a Material Adverse Change. Each officer, key employee or
consultant of the Company has entered into a confidentiality
agreement in favor of the Company relating to the protection of the
proprietary information and confidential information of the
Company.
2.44 Corporate
Records. The minute books of
the Company have been made available to the Underwriters and
counsel for the Underwriters, and such books (i) contain minutes of
all material meetings and actions of the board of directors
(including each board committee) and stockholders of the Company,
and (ii) reflect all material transactions referred to in such
minutes.
2.45 No
Stabilization. Neither the
Company nor any of its affiliates (within the meaning of Rule 144
under the Securities Act) has taken, directly or indirectly, any
action which constitutes or is designed to cause or result in, or
which could reasonably be expected to constitute, cause or result
in, the stabilization or manipulation of the price of any security
to facilitate the sale or resale of the Public Securities or to
result in a violation of Regulation M under the Exchange
Act.
-17-
3. Covenants of the Company. The
Company covenants and agrees as follows:
3.1 Amendments
to Registration Statement. The
Company shall deliver to the Representative, prior to filing, any
amendment or supplement to the Registration Statement or Prospectus
proposed to be filed after the Effective Date and not file any such
amendment or supplement to which the Representative shall
reasonably object in writing.
3.2 Federal
Securities Laws.
3.2.1 Compliance.
The Company, subject to Section 3.2.2, shall comply with the
requirements of Rule 430A of the Securities Act Regulations, and
will notify the Representative promptly, and confirm the notice in
writing, (i) when any post-effective amendment to the
Registration Statement shall become effective or any amendment or
supplement to the Prospectus shall have been filed; (ii) of
the receipt of any comments from the Commission; (iii) of any
request by the Commission for any amendment to the Registration
Statement or any amendment or supplement to the Prospectus or for
additional information; (iv) of the issuance by the Commission
of any stop order suspending the effectiveness of the Registration
Statement or any post-effective amendment or of any order
preventing or suspending the use of any Preliminary Prospectus or
the Prospectus, or of the suspension of the qualification of the
Public Securities and Representative’s Securities for
offering or sale in any jurisdiction, or of the initiation or
threatening of any proceedings for any of such purposes or of any
examination pursuant to Section 8(d) or 8(e) of the Securities
Act concerning the Registration Statement; and (v) if the
Company becomes the subject of a proceeding under Section 8A
of the Securities Act in connection with the Offering of the Public
Securities and Representative’s Securities. The Company shall
effect all filings required under Rule 424(b) of the Securities Act
Regulations, in the manner and within the time period required by
Rule 424(b) (without reliance on Rule 424(b) (8)), and shall take
such steps as it deems necessary to ascertain promptly whether the
form of prospectus transmitted for filing under Rule 424(b) was
received for filing by the Commission and, in the event that it was
not, it will promptly file such prospectus. The Company shall use
its best efforts to prevent the issuance of any stop order,
prevention or suspension and, if any such order is issued, to
obtain the lifting thereof at the earliest possible
moment.
3.2.2 Continued
Compliance. The Company shall comply with the Securities
Act, the Securities Act Regulations, the Exchange Act and the
Exchange Act Regulations so as to permit the completion of the
distribution of the Public Securities as contemplated in this
Agreement, the Warrant Agreement and in the Registration Statement,
the Pricing Disclosure Package and the Prospectus. If at any time
when a prospectus relating to the Public Securities is (or, but for
the exception afforded by Rule 172 of the Securities Act
Regulations (“Rule
172”), would be) required by the Securities Act to be
delivered in connection with sales of the Public Securities, any
event shall occur or condition shall exist as a result of which it
is necessary, in the opinion of counsel for the Underwriters or for
the Company, to (i) amend the Registration Statement in order
that the Registration Statement 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; (ii) amend or supplement the Pricing
Disclosure Package or the Prospectus in order that the Pricing
Disclosure Package or the Prospectus, as the case may be, will not
include any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein not
misleading in the light of the circumstances existing at the time
it is delivered to a purchaser or (iii) amend the Registration
Statement or amend or supplement the Pricing Disclosure Package or
the Prospectus, as the case may be, in order to comply with the
requirements of the Securities Act or the Securities Act
Regulations, the Company will promptly (A) give the
Representative notice of such event; (B) prepare any amendment
or supplement as may be necessary to correct such statement or
omission or to make the Registration Statement, the Pricing
Disclosure Package or the Prospectus comply with such requirements
and, a reasonable amount of time prior to any proposed filing or
use, furnish the Representative with copies of any such amendment
or supplement and (C) file with the Commission any such
amendment or supplement; provided that the Company shall not file
or use any such amendment or supplement to which the Representative
or counsel for the Underwriters shall reasonably object. The
Company will furnish to the Underwriters such number of copies of
such amendment or supplement as the Underwriters may reasonably
request.
-18-
3.2.3 Exchange
Act Registration. For a period of three (3) years after the
date of this Agreement, the Company shall use its best efforts to
maintain the registration of the Common Stock under the Exchange
Act. The Company shall not deregister any of the Common Stock or
Warrants under the Exchange Act without the prior written consent
of the Representative, which consent shall not be unreasonably
withheld.
3.2.4 Free
Writing Prospectuses. The Company will not, without the
prior consent of the Representative, (i) make any offer relating to
the Public Securities that would constitute a “free writing
prospectus” as defined in Rule 405 under the Securities Act,
except for any Issuer Free Writing Prospectus set forth in
Schedule 2-B hereto
and any electronic road show previously approved by the
Representative, or (ii) file, refer to, approve, use or authorize
the use of any “free writing prospectus” as defined in
Rule 405 under the Securities Act with respect to the Offering or
the Public Securities. If at any time any event shall have occurred
as a result of which any Issuer Free Writing Prospectus as then
amended or supplemented would, in the judgment of the Underwriters
or the Company, conflict with the information in the Registration
Statement, the Pricing Prospectus or the Prospectus as then amended
or supplemented or would, in the judgment of the Underwriters or
the Company, include an untrue statement of a material fact or omit
to state any material necessary in order to make the statements
therein, in the light of the circumstances existing at the time of
delivery to the purchaser, not misleading, or if to comply with the
Securities Act or the Securities Act Regulations it shall be
necessary at any time to amend or supplement any Issuer Free
Writing Prospectus, the Company will notify the Representative
promptly and, if requested by the Representative, prepare and
furnish without charge to each Underwriter an appropriate amendment
or supplement (in form and substance satisfactory to the
Representative) that will correct such statement, omission or
conflict or effect such compliance. The Company has complied and
will comply with the requirements of Rule 433 with respect to each
Issuer Free Writing Prospectus including, without limitation, all
prospectus delivery, filing, record retention and legending
requirements applicable to each such Issuer Free Writing
Prospectus.
3.2.5 Testing-the-Waters
Communications. If at any time following the distribution of
any Written Testing-the-Waters Communication there occurred or
occurs an event or development as a result of which such Written
Testing-the-Waters Communication 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 existing at that
subsequent time, not misleading, the Company shall promptly notify
the Representative and shall promptly amend or supplement, at its
own expense, such Written Testing-the-Waters Communication to
eliminate or correct such untrue statement or omission. The Company
will promptly notify the Representative of (i) any distribution by
the Company of Written Testing-the-Waters Communications, and (ii)
any request by the Commission for information concerning the
Written Testing-the-Waters Communications
3.3 Delivery
to the Underwriters of Registration Statements. The Company has delivered or made available or
shall deliver or make available to the Representative and counsel
for the Representative, without charge, signed copies of the
Registration Statement as originally filed and each amendment
thereto (including exhibits filed therewith) and signed copies of
all consents and certificates of experts, and will also deliver to
the Underwriters, without charge, a conformed copy of the
Registration Statement as originally filed and each amendment
thereto (without exhibits) for each of the Underwriters. The copies
of the Registration Statement and each amendment thereto furnished
to the Underwriters will be identical to the electronically
transmitted copies thereof filed with the Commission pursuant to
▇▇▇▇▇, except to the extent permitted by Regulation
S-T.
3.4 Delivery
to the Underwriters of Prospectuses. The Company has delivered or made available or
will deliver or make available to each Underwriter, without charge,
as many copies of each Preliminary Prospectus as such Underwriter
reasonably requested, and the Company hereby consents to the use of
such copies for purposes permitted by the Securities Act. The
Company will furnish to each Underwriter, without charge, during
the period when a prospectus relating to the Public Securities is
(or, but for the exception afforded by Rule 172 of the Securities
Act Regulations, would be) required to be delivered under the
Securities Act, such number of copies of the Prospectus (as amended
or supplemented) as such Underwriter may reasonably request. The
Prospectus and any amendments or supplements thereto furnished to
the Underwriters will be identical to the electronically
transmitted copies thereof filed with the Commission pursuant to
▇▇▇▇▇, except to the extent permitted by Regulation
S-T.
-19-
3.5 Effectiveness
and Events Requiring Notice to the
Representative. The Company
shall use its reasonable best efforts to cause the Registration
Statement to remain effective with a current prospectus for at
least nine (9) months after the Applicable Time, and shall notify
the Representative immediately and confirm the notice in writing:
(i) of the effectiveness of the Registration Statement and any
amendment thereto; (ii) of the issuance by the Commission of
any stop order or of the initiation, or the threatening, of any
proceeding for that purpose; (iii) of the issuance by any
state securities commission of any proceedings for the suspension
of the qualification of the Public Securities for offering or sale
in any jurisdiction or of the initiation, or the threatening, of
any proceeding for that purpose; (iv) of the mailing and
delivery to the Commission for filing of any amendment or
supplement to the Registration Statement or Prospectus; (v) of
the receipt of any comments or request for any additional
information from the Commission; and (vi) of the happening of
any event during the period described in this Section 3.5 that, in
the judgment of the Company, makes any statement of a material fact
made in the Registration Statement, the Pricing Disclosure Package
or the Prospectus, in light of the circumstances under which it was
made, untrue or that requires the making of any changes in (a) the
Registration Statement in order to make the statements therein not
misleading, or (b) in the Pricing Disclosure Package or the
Prospectus in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. If the
Commission or any state securities commission shall enter a stop
order or suspend such qualification at any time, the Company shall
make every reasonable effort to obtain promptly the lifting of such
order.
3.6 Review
of Financial Statements. For a
period of three (3) years after the date of this Agreement, the
Company, at its expense, shall cause its regularly engaged
independent registered public accounting firm to review (but not
audit) the Company’s financial statements for each of the
three (3) fiscal quarters immediately preceding the announcement of
any quarterly financial information.
3.7 Listing.
The Company shall use its reasonable best efforts to maintain the
listing of the Common Stock (including the Firm Shares, Option
Shares and shares of Common Stock issuable upon exercising of the
Warrants) and the Warrants on the NasdaqCM for at least three (3)
years from the date of this Agreement.
3.8 Financial
Public Relations Firm. As of
the Effective Date, the Company shall have retained a financial
public relations firm reasonably acceptable to the Representative
and the Company, which shall initially be RedChip, which firm shall
be experienced in assisting public companies in their relations
with their security holders, and shall retain such firm or another
firm reasonably acceptable to the Representative for a period of
not less than two (2) years after the Effective
Date.
3.9 Reports
to the Representative.
3.9.1 Periodic
Reports, etc. For a period of three (3) years after the
Effective Date, at the Representative’s request, the Company
shall furnish to the Representative copies of such financial
statements and other periodic and special reports as the Company
from time to time furnishes generally to holders of any class of
its securities and also promptly furnish to the Representative: (i)
a copy of each periodic report the Company shall be required to
file with the Commission under the Exchange Act and the Exchange
Act Regulations; (ii) a copy of every press release and every news
item and article with respect to the Company or its affairs which
was released by the Company; (iii) a copy of each Form 8-K prepared
and filed by the Company; (iv) five copies of each registration
statement filed by the Company under the Securities Act; (v) a copy
of each report or other communication furnished to stockholders and
(vi) such additional documents and information with respect to the
Company and the affairs of any future subsidiaries of the Company
as the Representative may from time to time reasonably request;
provided the Representative shall sign, if requested by the
Company, a Regulation FD compliant confidentiality agreement which
is reasonably acceptable to the Representative and
Representative’s Counsel in connection with the
Representative’s receipt of such information. Documents filed
with the Commission pursuant to its ▇▇▇▇▇ system or otherwise
publicly filed or made available shall be deemed to have been
delivered to the Representative pursuant to this Section
3.9.1.
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3.9.2 Transfer
Agent; Transfer Sheets. For a period of three (3) years
after the Effective Date, the Company shall retain a transfer agent
and registrar acceptable to the Representative (the
“Transfer
Agent”) and shall furnish to the Representative at the
Company’s sole cost and expense such transfer sheets of the
Company’s securities as the Representative may reasonably
request, including the daily and monthly consolidated transfer
sheets of the Transfer Agent and DTC. Philadelphia Stock Transfer
is acceptable to the Representative to act as Transfer Agent for
the shares of Common Stock.
3.9.3 Warrant
Agent. For so long as the Warrants are outstanding, the
Company shall retain a warrant agent for the Warrants reasonably
acceptable to the Representative (the “Warrant Agent”). Philadelphia
Stock Transfer is acceptable to the Representative to act as
Warrant Agent for the Warrants.
3.9.4 Trading
Reports. For a period of two (2) years after the date of
this Agreement, the Company shall provide to the Representative, at
the Company’s expense, such reports published by NasdaqCM
relating to price trading of the Public Securities, as the
Representative shall reasonably request.
3.10 Payment
of Expenses
3.10.1 General
Expenses Related to the Offering. The Company hereby agrees
to pay on each of the Closing Date and the Option Closing Date, if
any, to the extent not paid at the Closing Date, all expenses
incident to the performance of the obligations of the Company under
this Agreement, including, but not limited to: (a) all filing fees
and communication expenses relating to the registration of Public
Securities to be issued and sold in the Offering with the
Commission; (b) all filing fees associated with the review of the
Offering by FINRA; (c) all fees and expenses relating to the
listing of such Common Stock on the NasdaqCM; (d) all fees,
expenses and disbursements relating to the registration or
qualification of the Public Securities under the “blue
sky” securities laws of such states and other jurisdictions
as the Representative may reasonably designate (including, without
limitation, all filing and registration fees, and the reasonable
fees and disbursements of “blue sky” counsel), it being
agreed that such fees and expenses will be limited if the offering
is commenced on the NasdaqCM to make a payment of $5,000 to such
counsel on the Closing Date; (e) all fees, expenses and
disbursements relating to the registration, qualification or
exemption of the Public Securities under the securities laws of
such foreign jurisdictions as the Representative may reasonably
designate; (f) the costs of all mailing and printing of the
underwriting documents (including, without limitation, this
Agreement, any blue sky surveys and, if appropriate, any agreement
among underwriters, selected dealers’ agreement,
underwriters’ questionnaire and power of attorney),
Registration Statements, Prospectuses and all amendments,
supplements and exhibits thereto and as many preliminary and final
Prospectuses as the Representative may reasonably deem necessary;
(g) the costs and expenses of the public relations firm referred to
in Section 3.8 hereof; (h) the costs of preparing, printing and
delivering certificates representing the Public Securities; (i)
fees and expenses of the Transfer Agent for the shares of Common
Stock and Warrants; (j) stock transfer and/or stamp taxes, if any,
payable upon the transfer of securities from the Company to the
Underwriters; (k) to the extent approved by the Company in writing,
the costs associated with post-Closing advertising of the Offering
in the national editions of The
Wall Street Journal and The
New York Times; (m) the fees and expenses of the
Company’s accountants; (n) the fees and expenses of the
Company’s legal counsel and other agents and representatives;
(o) the $19,950 cost associated with the Underwriters’ use of
Ipreo’s book building, prospectus tracking and compliance
software for the Offering; (p) the reasonable and documented fees
and expenses of Underwriter’s legal counsel not to exceed
$125,000; and (q) up to $25,000 of the Underwriters’ actual
accountable “road show” expenses for the offering. The
Representative may deduct from the net proceeds of the Offering
payable to the Company on the Closing Date, or the Option Closing
Date, if any, the expenses set forth herein to be paid by the
Company to the Underwriters, provided, however, that in the event
that the Offering is terminated, the Company agrees to reimburse
the Underwriters pursuant to Section 8.3 hereof.
3.11 Non-accountable
Expenses. The Company further
agrees that, in addition to the expenses payable pursuant to
Section 3.10.1, on the Closing Date it shall pay to the
Representative, by deduction from the net proceeds of the Offering
contemplated herein, a non-accountable expense allowance equal to
one percent (1%) of the gross proceeds received by the Company from
the sale of the Firm Securities less the Advance (as such term is defined in
Section 8.3 hereof). Notwithstanding the foregoing, any advance
received by the Representative will be reimbursed to the Company to
the extent not actually incurred in compliance with FINRA Rule
5110(g)(4)(A).
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3.12 Reservation
of Common Stock. As of the date hereof, the Company has
reserved and the Company shall continue to reserve and keep
available at all times, free of preemptive rights, a sufficient
number of shares of Common Stock for the purpose of enabling the
Company to issue the Public Securities.
3.13 Application
of Net Proceeds. The Company
shall apply the net proceeds from the Offering received by it in a
manner consistent with the application thereof described under the
caption “Use of Proceeds” in the Registration
Statement, the Pricing Disclosure Package and the
Prospectus.
3.14 Delivery
of Earnings Statements to Security Holders. The Company shall make generally available to
its security holders as soon as practicable, but not later than the
first day of the fifteenth (15th) full calendar month following the
Effective Date, an earnings statement (which need not be certified
by an independent registered public accounting firm unless required
by the Securities Act or the Securities Act Regulations, but which
shall satisfy the provisions of Rule 158(a) under Section 11(a) of
the Securities Act) covering a period of at least twelve (12)
consecutive months beginning after the Effective
Date.
3.15 Stabilization.
Neither the Company nor, to its knowledge, any of its employees,
directors or stockholders (without the consent of the
Representative) has taken or shall take, directly or indirectly,
any action designed to or that has constituted or that might
reasonably be expected to cause or result in, under Regulation M of
the Exchange Act, or otherwise, stabilization or manipulation of
the price of any security of the Company to facilitate the sale or
resale of the Public Securities.
3.16 Internal
Controls. The Company shall
maintain a system of internal accounting controls sufficient to
provide reasonable assurances that: (i) transactions are
executed in accordance with management’s general or specific
authorization; (ii) transactions are recorded as necessary in
order to permit preparation of financial statements in accordance
with GAAP and to maintain accountability for assets;
(iii) access to assets is permitted only in accordance with
management’s general or specific authorization; and
(iv) the recorded accountability for assets is compared with
existing assets at reasonable intervals and appropriate action is
taken with respect to any differences.
3.17 Accountants.
As of the Effective Date, the Company shall have retained an
independent registered public accounting firm, as required by the
Securities Act and the Regulations and the PCAOB, reasonably
acceptable to the Representative and the Company shall retain a
nationally recognized independent public accounting firm for a
period of at least three (3) years after the Effective Date. The
Representative acknowledges that the Auditor is acceptable to the
Representative.
3.18 FINRA.
For a period of 90 days from the later of the Closing Date or the
Option Closing Date, the Company shall advise the Representative
(who shall make an appropriate filing with FINRA) if it is or
becomes aware that (i) any officer or director of the Company, (ii)
any beneficial owner of 5% or more of any class of the
Company’s securities or (iii) any beneficial owner of the
Company’s unregistered equity securities which were acquired
during the 180 days immediately preceding the filing of the
Registration Statement is or becomes an affiliate or associated
person of a FINRA member participating in the Offering (as
determined in accordance with the rules and regulations of
FINRA).
3.19 No
Fiduciary Duties. The Company
acknowledges and agrees that the Underwriters’ responsibility
to the Company is solely contractual in nature and that none of the
Underwriters or their affiliates or any selling agent shall be
deemed to be acting in a fiduciary capacity, or otherwise owes any
fiduciary duty to the Company or any of their affiliates in
connection with the Offering and the other transactions
contemplated by this Agreement.
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3.20 Company
Lock-Up Agreements.
3.20.1 Restrictions
on Sales of Capital Stock. The
Company, on behalf of itself and any successor entity of the
Company, agrees that, without the prior written consent of the
Representative, it will not, during the period commencing on the
date of this Agreement and ending on the 225th day after the date
of this Agreement for officers and directors and ending on the six
(6) month anniversary of the date of this Agreement for 5% or
greater stock holders (the “Lock-Up
Period”), (i) offer,
pledge, 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, lend, or otherwise transfer
or dispose of, directly or indirectly, any shares of capital stock
of the Company or any securities convertible into or exercisable or
exchangeable for shares of capital stock of the Company (other than
the Option Securities and Common Stock issued pursuant to employee
benefit plans, qualified stock option plans or other employee
compensation plans existing on the date hereof or pursuant to
currently outstanding options, warrants or rights) provided that
either (a) such shares shall not vest during the Lock-Up Period or
(b) the grantee of such shares will execute a Lock-Up Agreement;
(ii) file or cause to be filed any registration statement with the
Commission relating to the offering of any shares of capital stock
of the Company or any securities convertible into or exercisable or
exchangeable for shares of capital stock of the Company other than
a registration statement on Form S-4 or S-8; (iii) complete any
offering of debt securities of the Company, other than entering
into a line of credit with a traditional bank ; or (iv) enter into
any swap or other arrangement that transfers to another, in whole
or in part, any of the economic consequences of ownership of
capital stock of the Company, whether any such transaction
described in clause (i), (ii) or (iv) above is to be settled by
delivery of shares of capital stock of the Company or such other
securities, in cash or otherwise.
The
restrictions contained in this Section 3.19 shall not apply to (i)
the Public Securities to be sold hereunder, (ii) the issuance by
the Company of shares of Common Stock upon the exercise of a stock
option or warrant or the conversion of a security outstanding on
the date hereof, which is disclosed in the Registration Statement,
Pricing Disclosure Package and Prospectus, (iii) the issuance by
the Company of stock options or shares of capital stock of the
Company under any equity compensation plan of the Company, and (iv)
the issuance by the Company of shares of Common Stock to
consultants in the Company’s ordinary course of business and
not for capital raising transactions.
3.20.2 Restriction
on Continuous Offerings. Notwithstanding the restrictions
contained in Section 3.19.1, the Company, on behalf of itself and
any successor entity, agrees that, without the prior written
consent of the Representative,
it will not, for a period of 12 months after the date of this
Agreement, directly or indirectly in any
“at-the-market”, or continuous equity transaction,
offer to sell, contract to sell, grant any option to sell or
otherwise dispose of shares of capital stock of the Company or any
securities convertible into or exercisable or exchangeable for
shares of capital stock of the Company.
3.21 Release
of D&O Lock-up Period. If
the Representative, in its sole discretion, agrees to release or
waive the restrictions set forth in the Lock-Up Agreements
described in Section 2.25 hereof for an officer or director of the
Company and provide the Company with notice of the impending
release or waiver at least three (3) Business Days before the
effective date of the release or waiver, the Company agrees if
required by applicable law to announce the impending release or
waiver by a press release substantially in the form of
Exhibit C
hereto through a major news service at
least two (2) Business Days before the effective date of the
release or waiver.
3.22 Blue
Sky Qualifications. The Company
shall use its best efforts, in cooperation with the Underwriters,
if necessary, to qualify the Public Securities for offering and
sale under the applicable securities laws of such states and other
jurisdictions (domestic or foreign) as the Representative may
designate and to maintain such qualifications in effect so long as
required to complete the distribution of the Public Securities;
provided, however, that the Company shall not be obligated to file
any general consent to service of process or to qualify as a
foreign corporation or as a dealer in securities in any
jurisdiction in which it is not so qualified or to subject itself
to taxation in respect of doing business in any jurisdiction in
which it is not otherwise so subject.
3.23 Reporting
Requirements. The Company,
during the period when a prospectus relating to the Public
Securities is (or, but for the exception afforded by Rule 172,
would be) required to be delivered under the Securities Act, will
file all documents required to be filed with the Commission
pursuant to the Exchange Act within the time periods required by
the Exchange Act and Exchange Act Regulations. Additionally, the
Company shall report the use of proceeds from the issuance of the
Public Securities as may be required under Rule 463 under the
Securities Act Regulations.
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3.24 Emerging
Growth Company Status. The
Company shall promptly notify the Representative if the Company
ceases to be an Emerging Growth Company at any time prior to the
later of (i) completion of the distribution of the Public
Securities within the meaning of the Securities Act, and (ii)
fifteen (15) days following the completion of the Lock-Up
Period.
3.25 Press
Releases. Prior to the Closing
Date and any Option Closing Date, the Company shall not issue any
press release or other communication directly or indirectly or hold
any press conference with respect to the Company, its condition,
financial or otherwise, or earnings, business affairs or business
prospects (except for routine oral marketing communications in the
ordinary course of business and consistent with the past practices
of the Company and of which the Representative is notified),
without the prior written consent of the Representative, which
consent shall not be unreasonably withheld, unless in the judgment
of the Company and its counsel, and after notification to the
Representative, such press release or communication is required by
law.
3.26 ▇▇▇▇▇▇▇▇-▇▇▇▇▇.
The Company shall at all times comply with all applicable
provisions of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act in effect from time to time
and applicable to the Company.
3.27 IRS
Forms. If requested by the
Representative, the Company shall deliver to each Underwriter (or
its agent), prior to or at the Closing Date, a properly completed
and executed Internal Revenue Service Form W-9 or Form W-8, as
appropriate, together with all required attachments to such
form.
4. Conditions of Underwriters’
Obligations. The obligations of the Underwriters to purchase
and pay for the Public Securities, as provided herein, shall be
subject to (i) the continuing accuracy of the representations and
warranties of the Company as of the date hereof and as of each of
the Closing Date and the Option Closing Date, if any; (ii) the
accuracy of the statements of officers of the Company made pursuant
to the provisions hereof; (iii) the performance by the Company of
its obligations hereunder; and (iv) the following
conditions:
4.1 Regulatory
Matters.
4.1.1 Effectiveness
of Registration Statement; Rule 430A Information. The
Registration Statement shall have become effective not later than
5:30 p.m., Eastern time, on the date of this Agreement or such
later date and time as shall be consented to in writing by you,
and, at each of the Closing Date and any Option Closing Date, no
stop order suspending the effectiveness of the Registration
Statement or any post-effective amendment thereto shall have been
issued under the Securities Act, no order preventing or suspending
the use of any Preliminary Prospectus or the Prospectus shall have
been issued and no proceedings for any of those purposes shall have
been instituted or are pending or, to the Company’s
knowledge, contemplated by the Commission. The Company has complied
with each request (if any) from the Commission for additional
information. A prospectus containing the Rule 430A Information
shall have been filed with the Commission in the manner and within
the time frame required by Rule 424(b) under the Securities Act
Regulations (without reliance on Rule 424(b)(8)) or a
post-effective amendment providing such information shall have been
filed with, and declared effective by, the Commission in accordance
with the requirements of Rule 430A under the Securities Act
Regulations.
4.1.2 FINRA
Clearance. On or before the Effective Date, the
Representative shall have received clearance from FINRA as to the
amount of compensation allowable or payable to the Underwriters as
described in the Registration Statement.
4.1.3 NasdaqCM
Stock Market Clearance. On the Closing Date, the
Company’s Common Stock (including the shares of Common Stock
underlying the Warrants and Option Securities) and the Warrants
shall have been approved for listing on the NasdaqCM. On the first
Option Closing Date (if any), the Company’s Common Stock
(including the Common Stock underlying the Warrants and Option
Securities) shall have been approved for listing on the NasdaqCM,
subject only to official notice of issuance.
4.2 Company
Counsel Matters.
4.2.1 Closing
Date Opinion of Counsel to the Company. On the Closing Date,
the Representative shall have received the favorable opinions of
Lucosky, ▇▇▇▇▇▇▇▇ LLP, counsel to the Company, and a written
statement providing certain “10b-5” negative
assurances, dated the Closing Date and addressed to the
Representative, substantially in a form acceptable to the
Representative.
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4.2.2 Option
Closing Date Opinions of Counsel. On the Option Closing
Date, if any, the Representative shall have received the favorable
opinions of counsel listed in Section 4.2.1, dated the Option
Closing Date, addressed to the Representative and in form and
substance reasonably satisfactory to the Representative, confirming
as of the Option Closing Date, the statements made by such counsel
in its opinion delivered on the Closing Date.
4.2.3 Reliance.
In rendering such opinions, such counsel may rely: (i) as to
matters involving the application of laws other than the laws of
the United States and jurisdictions in which they are admitted, to
the extent such counsel deems proper and to the extent specified in
such opinion, if at all, upon an opinion or opinions (in form and
substance reasonably satisfactory to the Representative) of other
counsel reasonably acceptable to the Representative, familiar with
the applicable laws; and (ii) as to matters of fact, to the
extent they deem proper, on certificates or other written
statements of officers of the Company and officers of departments
of various jurisdictions having custody of documents respecting the
corporate existence or good standing of the Company, provided that
copies of any such statements or certificates shall be delivered to
Representative’s Counsel if requested.
4.3 Comfort
Letters.
4.3.1 Cold
Comfort Letter. At the time this Agreement is executed you
shall have received a cold comfort letter containing statements and
information of the type customarily included in accountants’
comfort letters with respect to the financial statements and
certain financial information contained in the Registration
Statement, the Pricing Disclosure Package and the Prospectus,
addressed to the Representative and in form and substance
satisfactory in all respects to you and to Representative’s
Counsel from the Auditor, dated as of the date of this
Agreement.
4.3.2 Bring-down
Comfort Letter. At each of the Closing Date and the Option
Closing Date, if any, the Representative shall have received from
the Auditor a letter, dated as of the Closing Date or the Option
Closing Date, as applicable, to the effect that the Auditor
reaffirms the statements made in the letter furnished pursuant to
Section 4.3.1, except that the specified date referred to shall be
a date not more than three (3) Business Days prior to the Closing
Date or the Option Closing Date, as applicable.
4.4 Officers’
Certificates.
4.4.1 Officers’
Certificate. The Company shall have furnished to the
Representative a certificate, dated the Closing Date and any Option
Closing Date (if such date is other than the Closing Date), of its
Chief Executive Officer and its Chief Financial Officer stating
that (i) such officers have carefully examined the Registration
Statement, the Pricing Disclosure Package, any Issuer Free Writing
Prospectus and the Prospectus and, in their opinion, the
Registration Statement and each amendment thereto, as of the
Applicable Time and as of the date of this Agreement and as of the
Closing Date (or any Option Closing Date if such date is other than
the Closing Date) did not include any untrue statement of a
material fact and did not omit to state a material fact required to
be stated therein or necessary to make the statements therein not
misleading, and the Pricing Disclosure Package, as of the
Applicable Time and as of the Closing Date (or any Option Closing
Date if such date is other than the Closing Date), any Issuer Free
Writing Prospectus as of its date and as of the Closing Date (or
any Option Closing Date if such date is other than the Closing
Date), the Prospectus and each amendment or supplement thereto, as
of the respective date thereof and as of the Closing Date, did not
include any untrue statement of a material fact and did not omit to
state a material fact necessary in order to make the statements
therein, in the light of the circumstances in which they were made,
not misleading, (ii) since the effective date of the Registration
Statement, no event has occurred which should have been set forth
in a supplement or amendment to the Registration Statement, the
Pricing Disclosure Package or the Prospectus, (iii) to the best of
their knowledge after reasonable investigation, as of the Closing
Date (or any Option Closing Date if such date is other than the
Closing Date), the representations and warranties of the Company in
this Agreement are true and correct in all material respects
(except for those representations and warranties qualified as to
materiality, which shall be true and correct in all respects and
except for those representations and warranties which refer to
facts existing at a specific date, which shall be true and correct
as of such date) and the Company has complied with all agreements
and satisfied all conditions on its part to be performed or
satisfied hereunder at or prior to the Closing Date (or any Option
Closing Date if such date is other than the Closing Date), and (iv)
there has not been, subsequent to the date of the most recent
audited financial statements included or incorporated by reference
in the Pricing Disclosure Package, any material adverse change in
the financial position or results of operations of the Company, or
any change or development that, singularly or in the aggregate,
would involve a material adverse change, in or affecting the
condition (financial or otherwise), results of operations,
business, assets or prospects of the Company, except as set forth
in the Prospectus.
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4.4.2 Secretary’s
Certificate. At each of the Closing Date and the Option
Closing Date, if any, the Representative shall have received a
certificate of the Company signed by the Secretary of the Company,
dated the Closing Date or the Option Date, as the case may be,
respectively, certifying: (i) that each of the Charter and
by-laws is true and complete, has not been modified and is in full
force and effect; (ii) that the resolutions of the
Company’s Board of Directors relating to the Offering are in
full force and effect and have not been modified; (iii) as to the
accuracy and completeness of all correspondence between the Company
or its counsel and the Commission; and (iv) as to the incumbency of
the officers of the Company. The documents referred to in such
certificate shall be attached to such certificate.
4.5 No
Material Changes. Prior to and
on each of the Closing Date and each Option Closing Date, if any:
(i) there shall have been no Material Adverse Change and no
material change in the capital stock or debt of the Company from
the latest dates as of which such information is set forth in the
Registration Statement, the Pricing Disclosure Package and the
Prospectus, except as set forth in the Registration Statement,
Pricing Disclosure and the Prospectus; (ii) no action, suit or
proceeding, at law or in equity, shall have been pending or
threatened against the Company or any Insider before or by any
court or federal or state commission, board or other administrative
agency wherein an unfavorable decision, ruling or finding may
result in a Material Adverse Change, except as set forth in the
Registration Statement, the Pricing Disclosure Package and the
Prospectus; (iii) no stop order shall have been issued under
the Securities Act and no proceedings therefor shall have been
initiated or threatened by the Commission; (iv) no action shall
have been taken and no law, statute, rule, regulation or order
shall have been enacted, adopted or issued by any Governmental
Entity which would prevent the issuance or sale of the Public
Securities or materially and adversely affect or potentially
materially and adversely affect the business or operations of the
Company; (v) no injunction, restraining order or order of any other
nature by any federal or state court of competent jurisdiction
shall have been issued which would prevent the issuance or sale of
the Public Securities or materially and adversely affect or
potentially materially and adversely affect the business or
operations of the Company; and (vi) the Registration
Statement, the Pricing Disclosure Package and the Prospectus and
any amendments or supplements thereto shall contain all material
statements which are required to be stated therein in accordance
with the Securities Act and the Securities Act Regulations and
shall conform in all material respects to the requirements of the
Securities Act and the Securities Act Regulations, and neither the
Registration Statement, the Pricing Disclosure Package, the
Prospectus nor any Issuer Free Writing Prospectus nor any amendment
or supplement thereto shall contain any untrue statement of a
material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein, in the
light of the circumstances under which they were made, not
misleading.
4.6 No
Material Misstatement or Omission. The Underwriters shall not have discovered and
disclosed to the Company on or prior to the Closing Date and any
Option Closing Date that the Registration Statement or any
amendment or supplement thereto contains an untrue statement of a
fact which, in the opinion of counsel for the Underwriters, is
material or omits to state any fact which, in the opinion of such
counsel, is material and is required to be stated therein or is
necessary to make the statements therein not misleading, or that
the Registration Statement, Pricing Disclosure Package, any Issuer
Free Writing Prospectus or the Prospectus or any amendment or
supplement thereto contains an untrue statement of fact which, in
the opinion of such counsel, is material or omits to state any fact
which, in the opinion of such counsel, is material and is necessary
in order to make the statements, in the light of the circumstances
under which they were made, not misleading.
4.7 Corporate
Proceedings. All corporate
proceedings and other legal matters incident to the authorization,
form and validity of each of this Agreement, the Warrants, the
Warrant Agreement, the Representative’s Warrant, the Public
Securities, the Registration Statement, the Pricing Disclosure
Package, each Issuer Free Writing Prospectus, if any, and the
Prospectus and all other legal matters relating to this Agreement,
the Warrants, the Warrant Agreement, the Representative’s
Warrant, the Representative’s Warrant Agreement and the
transactions contemplated hereby and thereby shall be reasonably
satisfactory in all material respects to counsel for the
Underwriters, and the Company shall have furnished to such counsel
all documents and information that they may reasonably request to
enable them to pass upon such matters.
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4.8 Delivery
of Agreements.
4.8.1 Effective
Date Deliveries. On or before the Effective Date, the
Company shall have delivered to the Representative executed copies
of the Lock-Up Agreements from each of the persons listed in
Schedule 3
hereto.
4.8.2 Closing
Date Deliveries. On the Closing Date, the Company shall have
delivered to the Representative an executed copy of the Warrant
Agreement and the Representative’s Warrant.
4.9 Additional
Documents. At the Closing Date
and at each Option Closing Date (if any), Representative’s
Counsel shall have been furnished with such documents and opinions
as they may reasonably require for the purpose of enabling
Representative’s Counsel to deliver an opinion to the
Underwriters, or in order to evidence the accuracy of any of the
representations or warranties, or the fulfillment of any of the
conditions, herein contained; and all proceedings taken by the
Company in connection with the issuance and sale of the Public
Securities and the Representative’s Securities as herein
contemplated shall be satisfactory in form and substance to the
Representative and Representative’s
Counsel.
5. Indemnification.
5.1 Indemnification
of the
Underwriters.
5.1.1 General.
Subject to the conditions set forth below, the Company agrees to
indemnify and hold harmless each Underwriter, its affiliates and
each of its and their respective directors, officers, members,
employees, representatives, partners, shareholders, affiliates,
counsel, and agents and each person, if any, who controls any such
Underwriter within the meaning of Section 15 of the Securities Act
or Section 20 of the Exchange Act (collectively the
“Underwriter Indemnified
Parties,” and each an “Underwriter Indemnified Party”), against any and all loss,
liability, claim, damage and expense whatsoever (including but not
limited to any and all legal or other expenses reasonably incurred
in investigating, preparing or defending against any litigation,
commenced or threatened, or any claim whatsoever, whether arising
out of any action between any of the Underwriter Indemnified
Parties and the Company or between any of the Underwriter
Indemnified Parties and any third party, or otherwise) to which
they or any of them may become subject under the Securities Act,
the Exchange Act or any other statute or at common law or otherwise
or under the laws of foreign countries (a “Claim”), (i) arising out of or
based upon any untrue statement or alleged untrue statement of a
material fact contained in (A) the Registration Statement, the
Pricing Disclosure Package, any Preliminary Prospectus, the
Prospectus, or in any Issuer Free Writing Prospectus or in any
Written Testing-the-Waters Communication (as from time to time each
may be amended and supplemented); (B) any materials or information
provided to investors by, or with the approval of, the Company in
connection with the marketing of the Offering, including any
“road show” or investor presentations made to investors
by the Company (whether in person or electronically); or (C) any
application or other document or written communication (in this
Section 5, collectively called “application”) executed by the
Company or based upon written information furnished by the Company
in any jurisdiction in order to qualify the Public Securities and
Representative’s Securities under the securities laws thereof
or filed with the Commission, any state securities commission or
agency, the NasdaqCM or any other national securities exchange; or
the omission or alleged omission therefrom of a material fact
required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were
made, not misleading, unless such statement or omission was made in
reliance upon, and in conformity with, the Underwriters’
Information or (ii) otherwise arising in connection with or
allegedly in connection with the Offering. The Company also agrees
that it will reimburse each Underwriter Indemnified Party for all
fees and expenses (including but not limited to any and all legal
or other expenses reasonably incurred in investigating, preparing
or defending against any litigation, commenced or threatened, or
any claim whatsoever, whether arising out of any action between any
of the Underwriter Indemnified Parties and the Company or between
any of the Underwriter Indemnified Parties and any third party, or
otherwise) (collectively, the “Expenses”), and further
agrees wherever and whenever possible to advance payment of
Expenses as they are incurred by an Underwriter Indemnified Party
in investigating, preparing, pursuing or defending any
Claim.
-27-
5.1.2 Procedure.
If any action is brought against an Underwriter Indemnified Party
in respect of which indemnity may be sought against the Company
pursuant to Section 5.1.1, such Underwriter Indemnified Party shall
promptly notify the Company in writing of the institution of such
action and the Company shall assume
the defense of such action, including the employment and fees of
counsel (subject to the approval of such Underwriter Indemnified
Party) and payment of actual expenses if an Underwriter Indemnified
Party requests that the Company do so. Such Underwriter Indemnified
Party shall have the right to employ its or their own counsel in
any such case, and the fees and expenses of such counsel shall be
at the expense of the Company, and shall be advanced by the Company
to the Underwriter Indemnified Party upon request.. The
Company shall not be liable for any settlement of any action
effected without its consent (which shall not be unreasonably
withheld). In addition, the Company shall not, without the prior
written consent of the Underwriters, settle, compromise or consent
to the entry of any judgment in or otherwise seek to terminate any
pending or threatened action in respect of which advancement,
reimbursement, indemnification or contribution may be sought
hereunder (whether or not such Underwriter Indemnified Party is a
party thereto) unless such settlement, compromise, consent or
termination (i) includes an unconditional release of each
Underwriter Indemnified Party, acceptable to such Underwriter
Indemnified Party, from all liabilities, expenses and claims
arising out of such action for which indemnification or
contribution may be sought and (ii) does not include a statement as
to or an admission of fault, culpability or a failure to act, by or
on behalf of any Underwriter Indemnified Party.
5.2 Indemnification of the Company.
Each Underwriter, severally and not jointly, agrees to indemnify
and hold harmless the Company, its directors, its officers who
signed the Registration Statement and persons who control the
Company within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act against any and all loss, liability,
claim, damage and expense described in the foregoing indemnity from
the Company to the several Underwriters, as incurred, but only with
respect to untrue statements or omissions, or alleged untrue
statements or omissions made in the Registration Statement, any
Preliminary Prospectus, the Pricing Disclosure Package or
Prospectus or any amendment or supplement thereto or in any
application, in reliance upon, and in strict conformity with, the
Underwriters’ Information. In case any action shall be
brought against the Company or any other person so indemnified
based on any Preliminary Prospectus, the Registration Statement,
the Pricing Disclosure Package or Prospectus or any amendment or
supplement thereto or any application, and in respect of which
indemnity may be sought against any Underwriter, such Underwriter
shall have the rights and duties given to the Company, and the
Company and each other person so indemnified shall have the rights
and duties given to the several Underwriters by the provisions of
Section 5.1.2. The Company agrees promptly to notify the
Representative of the commencement of any litigation or proceedings
against the Company or any of its officers, directors or any
person, if any, who controls the Company within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act,
in connection with the issuance and sale of the Public Securities
or in connection with the Registration Statement, the Pricing
Disclosure Package, the Prospectus, or any Issuer Free Writing
Prospectus or any Written Testing-the-Waters
Communication.
5.3 Contribution.
5.3.1 Contribution
Rights. If the indemnification provided for in this Section
5 shall for any reason be unavailable to or insufficient to hold
harmless an indemnified party under Section 5.1 or 5.2 in respect
of any loss, claim, damage or liability, or any action in respect
thereof, referred to therein, then each indemnifying party shall,
in lieu of indemnifying such indemnified party, contribute to the
amount paid or payable by such indemnified party as a result of
such loss, claim, damage or liability, or action in respect
thereof, (i) in such proportion as shall be appropriate to reflect
the relative benefits received by the Company, on the one hand, and
the Underwriters, on the other, from the Offering of the Public
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, on
the one hand, and the Underwriters, on the other, with respect to
the statements or omissions that resulted in such loss, claim,
damage or liability, or action in respect thereof, as well as any
other relevant equitable considerations. The relative benefits
received by the Company, on the one hand, and the Underwriters, on
the other, with respect to such Offering shall be deemed to be in
the same proportion as the total net proceeds from the Offering of
the Public Securities purchased under this Agreement (before
deducting expenses) received by the Company, as set forth in the
table on the cover page of the Prospectus, on the one hand, and the
total underwriting discounts and commissions received by the
Underwriters with respect to the Public Securities purchased under
this Agreement, as set forth in the table on the cover page of the
Prospectus, on the other hand. The relative fault shall be
determined by reference to whether the untrue or alleged untrue
statement of a material fact or omission or alleged omission to
state a material fact relates to information supplied by the
Company or the Underwriters, the intent of the parties and their
relative knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Company and the
Underwriters agree that it would not be just and equitable if
contributions pursuant to this Section 5.3.1 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
that does not take into account the equitable considerations
referred to herein. The amount paid or payable by an indemnified
party as a result of the loss, claim, damage or liability, or
action in respect thereof, referred to above in this Section 5.3.1
shall be deemed to include, for purposes of this Section 5.3.1, any
legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action
or claim. Notwithstanding the provisions of this Section 5.3.1 in
no event shall an Underwriter be required to contribute any amount
in excess of the amount by which the total underwriting discounts
and commissions received by such Underwriter with respect to the
Offering of the Public Securities 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. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) shall be
entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.
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5.3.2 Contribution
Procedure. Within fifteen (15) days after receipt by any
party to this Agreement (or its representative) of notice of the
commencement of any action, suit or proceeding, such party will, if
a claim for contribution in respect thereof is to be made against
another party (“contributing party”), notify the
contributing party of the commencement thereof, but the failure to
so notify the contributing party will not relieve it from any
liability which it may have to any other party other than for
contribution hereunder. In case any such action, suit or proceeding
is brought against any party, and such party notifies a
contributing party or its representative of the commencement
thereof within the aforesaid 15 days, the contributing party will
be entitled to participate therein with the notifying party and any
other contributing party similarly notified. Any such contributing
party shall not be liable to any party seeking contribution on
account of any settlement of any claim, action or proceeding
affected by such party seeking contribution on account of any
settlement of any claim, action or proceeding affected by such
party seeking contribution without the written consent of such
contributing party. The contribution provisions contained in this
Section 5.3.2 are intended to supersede, to the extent permitted by
law, any right to contribution under the Securities Act, the
Exchange Act or otherwise available. Each Underwriter’s
obligations to contribute pursuant to this Section 5.3 are several
and not joint.
6. Default
by an Underwriter.
6.1 Default
Not Exceeding 10% of Firm Securities or Option
Securities. If any Underwriter
or Underwriters shall default in its or their obligations to
purchase the Firm Securities or the Option Securities, if the
Over-allotment Option is exercised hereunder, and if the number of
the Firm Securities or Option Securities with respect to which such
default relates does not exceed in the aggregate 10% of the number
of Firm Securities or Option Securities that all Underwriters have
agreed to purchase hereunder, then such Firm Securities or Option
Securities to which the default relates shall be purchased by the
non-defaulting Underwriters in proportion to their respective
commitments hereunder.
6.2 Default
Exceeding 10% of Firm Securities or Option
Securities. In the event that
the default addressed in Section 6.1 relates to more than 10% of
the Firm Securities or Option Securities, the Representative may in
its discretion arrange for it or for another party or parties to
purchase such Firm Securities or Option Securities to which such
default relates on the terms contained herein. If, within one (1)
Business Day after such default relating to more than 10% of the
Firm Securities or Option Securities, the Representative does not
arrange for the purchase of such Firm Securities or Option
Securities, then the Company shall be entitled to a further period
of one (1) Business Day within which to procure another party or
parties satisfactory to the Representative to purchase said Firm
Securities or Option Securities on such terms. In the event that
neither the Representative nor the Company arrange for the purchase
of the Firm Securities or Option Securities to which a default
relates as provided in this Section 6, this Agreement will
automatically be terminated by the Representative or the Company
without liability on the part of the Company (except as provided in
Sections 3.10 and 5 hereof) or the several Underwriters (except as
provided in Section 5 hereof); provided, however, that if such
default occurs with respect to the Option Securities, this
Agreement will not terminate as to the Firm Securities; and
provided, further, that nothing herein shall relieve a defaulting
Underwriter of its liability, if any, to the other Underwriters and
to the Company for damages occasioned by its default
hereunder.
6.3 Postponement
of Closing Date. In the event
that the Firm Securities or Option Securities to which the default
relates are to be purchased by the non-defaulting Underwriters, or
are to be purchased by another party or parties as aforesaid, the
Representative or the Company shall have the right to postpone the
Closing Date or Option Closing Date for a reasonable period, but
not in any event exceeding five (5) Business Days, in order to
effect whatever changes may thereby be made necessary in the
Registration Statement, the Pricing Disclosure Package or the
Prospectus or in any other documents and arrangements, and the
Company agrees to file promptly any amendment to the Registration
Statement, the Pricing Disclosure Package or the Prospectus that in
the opinion of counsel for the Underwriter may thereby be made
necessary. The term “Underwriter” as used in this Agreement shall include
any party substituted under this Section 6 with like effect as if
it had originally been a party to this Agreement with respect to
such Firm Securities.
-29-
7. Additional
Covenants.
7.1 Board
Composition and Board Designations. The Company shall ensure that: (i) the
qualifications of the persons serving as members of the Board of
Directors and the overall composition of the Board comply with the
▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act, the Exchange Act and the listing rules of the
NasdaqCM or any other national securities exchange, as the case may
be, in the event the Company seeks to have any of its securities
listed on another exchange or quoted on an automated quotation
system, and (ii) if applicable, at least one member of the Audit
Committee of the Board of Directors qualifies as an “audit
committee financial expert,” as such term is defined under
Regulation S-K and the listing rules of the
NasdaqCM.
7.2 Prohibition
on Press Releases and Public Announcements. The Company shall not issue press releases or
engage in any other publicity, without the Representative’s
prior written consent, for a period ending at 5:00 p.m., Eastern
time, on the first (1st)
Business Day following the fortieth (40th)
day after the Closing Date, other than normal and customary
releases issued in the ordinary course of the Company’s
business.
7.3 Right
of First Refusal. Provided that
the Firm Securities are sold in accordance with the terms of this
Agreement, for a period of twenty four (24) months from the
Closing, the Company grants the Representative the right of first
refusal (the “Right of First Refusal”) to act as lead
managing underwriter and book-runner and/or placement agents for
any and all future public or private equity, equity-linked or debt
(excluding commercial bank debt) offerings undertaken during such
period by the Company, any Subsidiary, or any successor to the
Company (each, a “Subject Transaction”), at
Representative’s sole and exclusive discretion, on terms and
conditions customary to the Representative for such Subject
Transactions. For the avoidance of any doubt, the Company shall not
retain, engage or solicit any additional investment banker,
book-runner, financial advisor, underwriter and/or placement agent
in a Subject Transaction without the express written consent of
Representative.
The
Company shall notify Representative of its intention to pursue a
Subject Transaction, including the material terms thereof, by
providing written notice thereof by email addressed to
Representative. If Representative fails to exercise its Right of
First Refusal with respect to any Subject Transaction within ten
(10) Business Days after the emailing of such written notice, then
Representative shall have no further claim or right with respect to
the Subject Transaction. The Representative may elect, in its sole
and absolute discretion, not to exercise its Right of First Refusal
with respect to any Subject Transaction; provided that any such
election shall not adversely affect its Right of First Refusal with
respect to any other Subject Transaction during the twenty four
(24) month period agreed to above.
In
the event the Company fails to comply with this provision, damages
shall be computed as the maximum allowable amount under applicable
FINRA rules and regulations.
7.4 Post
Offering Investments. Provided
that the Firm Securities are sold in accordance with the terms of
this Agreement, in the event any individual or entity (including
affiliates of such persons) that was introduced to the Company by
any Underwriter subsequently provides the Company capital via any
transaction during the period commencing 91 days following the
Closing Date and ending eighteen months thereafter, .the Company
shall be obligated to pay the applicable Underwriter a cash fee of
7% of the gross proceeds of any such
investments.
8. Effectiveness
of this Agreement and Termination Thereof.
8.1 Effectiveness
of the Agreement. This
Agreement shall become effective when the Company and the
Representative have executed the same and delivered counterparts of
such signatures to the other party.
-30-
8.2 Termination.
The Representative shall have the right to terminate this Agreement
at any time prior to any Closing Date, (i) if any domestic or
international event or act or occurrence has materially disrupted,
or in your opinion will in the immediate future materially disrupt,
general securities markets in the United States; or (ii) if
trading on the New York Stock Exchange or the Nasdaq Stock Market
LLC shall have been suspended or materially limited, or minimum or
maximum prices for trading shall have been fixed, or maximum ranges
for prices for securities shall have been required by FINRA or by
order of the Commission or any other Governmental Entity having
jurisdiction; or (iii) if the United States shall have become
involved in a new war or an increase in major hostilities; or
(iv) if a banking moratorium has been declared by a New York
State or federal authority; or (v) if a moratorium on foreign
exchange trading has been declared which materially adversely
impacts the United States securities markets; or (vi) if the
Company shall have sustained a material loss by fire, flood,
accident, hurricane, earthquake, theft, sabotage or other calamity
or malicious act which, whether or not such loss shall have been
insured, will, in your opinion, make it inadvisable to proceed with
the delivery of the Firm Securities or Option Securities; or
(vii) if the Company is in material breach of any of its
representations, warranties or covenants hereunder; or
(viii) if the Representative shall have become aware after the
date hereof of a material adverse change in the conditions or
prospects of the Company, or a material adverse change in general
market conditions as in the Representative’s reasonable
judgment would make it impracticable to proceed with the offering,
sale and/or delivery of the Public Securities or to enforce
contracts made by the Underwriters for the sale of the Public
Securities.
8.3 Expenses.
Notwithstanding anything to the contrary in this Agreement, except
in the case of a default by the Underwriters, pursuant to Section
6.2 above, in the event that this Agreement is terminated prior to
the Closing Date or is not otherwise carried out for any reason
whatsoever, within the time specified herein or any extensions
thereof pursuant to the terms herein, the Company shall be
obligated to pay to the Underwriters their actual and accountable
out-of-pocket expenses related to the transactions contemplated
herein then due and payable (including the fees and disbursements
of Representative Counsel) up to $100,000, inclusive of the $50,000
advance for accountable expenses (the “Advance”) previously paid by the Company to the
Representative pursuant to that letter entitled Investment Banking
Services and dated May 1, 2020 (the “Engagement
Letter”) and upon demand
the Company shall pay the full amount thereof to the Representative
on behalf of the Underwriters; provided, however, that such
expense cap in no way limits or impairs the indemnification and
contribution provisions of this Agreement. Notwithstanding the
foregoing, any advance received by the Representative will be
reimbursed to the Company to the extent not actually incurred in
compliance with FINRA Rule 5110(g)(4)(A).
8.4 Survival
of Indemnification.
Notwithstanding any contrary provision contained in this Agreement,
any election hereunder or any termination of this Agreement, and
whether or not this Agreement is otherwise carried out, the
provisions of Section 5 shall remain in full force and effect and
shall not be in any way affected by, such election or termination
or failure to carry out the terms of this Agreement or any part
hereof.
8.5 Representations,
Warranties, Agreements to Survive. All representations, warranties and agreements
contained in this Agreement or in certificates of officers of the
Company submitted pursuant hereto, shall remain operative and in
full force and effect regardless of (i) any investigation made
by or on behalf of any Underwriter or its Affiliates or selling
agents, any person controlling any Underwriter, its officers or
directors or any person controlling the Company or
(ii) delivery of and payment for the Public
Securities.
9. Miscellaneous.
9.1 Notices.
All communications hereunder, except as herein otherwise
specifically provided, shall be in writing and shall be mailed
(registered or certified mail, return receipt requested),
personally delivered or sent by facsimile transmission or e-mail
and confirmed and shall be deemed given when so delivered, faxed or
e-mailed and confirmed or if mailed, two (2) days after such
mailing.
If to the Representative:
▇▇▇▇▇▇ ▇▇▇▇▇▇ & Co., LLC
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇, CEO
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
e-mail:
-31-
with a copy (which shall not constitute notice) to:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Fax No.: ▇▇▇-▇▇▇-▇▇▇▇
e-mail:
If to the Company:
▇▇▇▇▇▇▇▇▇.▇▇▇ Group, Inc.
▇▇▇
▇▇▇▇▇ ▇▇. ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇, Chief Executive Officer
e-mail:
with a copy (which shall not constitute notice), in each case,
to:
Lucosky
▇▇▇▇▇▇▇▇ LLP
▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attention:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
Fax No:
▇▇▇ ▇▇▇ ▇▇▇▇
email:
9.2 Headings.
The headings contained herein are for the sole purpose of
convenience of reference, and shall not in any way limit or affect
the meaning or interpretation of any of the terms or provisions of
this Agreement.
9.3 Absence
of Fiduciary Relationship. The
Company acknowledges and agrees that:
(i) each
Underwriter’s responsibility to the Company is solely
contractual in nature, each Underwriter has been retained solely to
act as an underwriter in connection with the Offering and no
fiduciary, advisory or agency relationship between the Company and
the Underwriters has been created in respect of any of the
transactions contemplated by this Agreement, irrespective of
whether either the Representative has advised or is advising the
Company on other matters;
(ii) the
price of the Public Securities set forth in this Agreement was
established by the Company following discussions and
arm’s-length negotiations with the Representative, and the
Company are capable of evaluating and understanding, and
understands and accepts, the terms, risks and conditions of the
transactions contemplated by this Agreement; and
(iii) it
has been advised that the Representative and their respective
affiliates are engaged in a broad range of transactions which may
involve interests that differ from those of the Company and that
the Underwriters have no obligation to disclose such interests and
transactions to the Company by virtue of any fiduciary, advisory or
agency relationship.
9.4 Research
Analyst Independence. The
Company acknowledges that each Underwriter’s research
analysts and research departments are required to be independent
from its investment banking division and are subject to certain
regulations and internal policies, and that such
Underwriter’s research analysts may hold views and make
statements or investment recommendations and/or publish research
reports with respect to the Company and/or the Offering that differ
from the views of their investment banking division. The Company
acknowledges that each Underwriter is a full service securities
firm and as such from time to time, subject to applicable
securities laws, rules and regulations, may effect transactions for
its own account or the account of its customers and hold long or
short positions in debt or equity securities of the Company;
provided, however, that nothing in this Section 9.4 shall relieve
the Underwriter of any responsibility or liability it may otherwise
bear in connection with activities in violation of applicable
securities laws, rules or regulations.
-32-
9.5 Amendment.
This Agreement may only be amended by a written instrument executed
by each of the parties hereto.
9.6 Entire
Agreement. This Agreement
(together with the other agreements and documents being delivered
pursuant to or in connection with this Agreement) constitutes the
entire agreement of the parties hereto with respect to the subject
matter hereof and thereof, and supersedes all prior agreements and
understandings of the parties, oral and written, with respect to
the subject matter hereof. Notwithstanding anything to the contrary set forth
herein, it is understood and agreed by the parties hereto that all
other terms and conditions of those certain letter agreements
between JG and the Company dated March 11, 2020, as amended and
September 18, 2020, as amended shall remain in full force and
effect; provided, that, in the event of a conflict between the
terms of the foregoing agreements and this Agreement, the terms of
this Agreement shall prevail.
9.7 Binding
Effect. This Agreement shall
inure solely to the benefit of and shall be binding upon the
Representative, the Underwriters, the Company, and the controlling
persons, directors and officers referred to in Section 5.2 hereof,
and their respective successors, legal representatives, heirs and
assigns, and no other person shall have or be construed to have any
legal or equitable right, remedy or claim under or in respect of or
by virtue of this Agreement or any provisions herein contained. The
term “successors and assigns” shall not include a
purchaser, in its capacity as such, of securities from any of the
Underwriters.
9.8 Governing
Law; Consent to Jurisdiction; Trial by Jury. This Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of
New York, without giving effect to conflict of laws principles
thereof. The Company hereby agrees that any action, proceeding or
claim against it arising out of, or relating in any way to this
Agreement shall be brought and enforced in the New York Supreme
Court, County of New York, or in the United States District Court
for the Southern District of New York, and irrevocably submits to
such jurisdiction, which jurisdiction shall be exclusive. The
Company hereby waives any objection to such exclusive jurisdiction
and that such courts represent an inconvenient forum. Any such
process or summons to be served upon the Company may be served by
transmitting a copy thereof by registered or certified mail, return
receipt requested, postage prepaid, addressed to it at the address
set forth in Section 9.1 hereof. Such mailing shall be deemed
personal service and shall be legal and binding upon the Company in
any action, proceeding or claim. The Company agrees that the
prevailing party(ies) in any such action shall be entitled to
recover from the other party(ies) all of its reasonable
attorneys’ fees and expenses relating to such action or
proceeding and/or incurred in connection with the preparation
therefor. The Company (on its own behalf and, to the extent
permitted by applicable law, on behalf of its stockholders and
affiliates) and each of the Underwriters hereby irrevocably waives,
to the fullest extent permitted by applicable law, any and all
right to trial by jury in any legal proceeding arising out of or
relating to this Agreement or the transactions contemplated
hereby.
9.9 Execution
in Counterparts. This Agreement
may be executed in one or more counterparts, and by the different
parties hereto in separate counterparts, each of which shall be
deemed to be an original, but all of which taken together shall
constitute one and the same agreement, and shall become effective
when one or more counterparts has been signed by each of the
parties hereto and delivered to each of the other parties hereto.
Delivery of a signed counterpart of this Agreement by facsimile or
email/pdf transmission shall constitute valid and sufficient
delivery thereof.
9.10 Waiver,
etc. The failure of any of the
parties hereto to at any time enforce any of the provisions of this
Agreement shall not be deemed or construed to be a waiver of any
such provision, nor to in any way effect the validity of this
Agreement or any provision hereof or the right of any of the
parties hereto to thereafter enforce each and every provision of
this Agreement. No waiver of any breach, non-compliance or
non-fulfillment of any of the provisions of this Agreement shall be
effective unless set forth in a written instrument executed by the
party or parties against whom or which enforcement of such waiver
is sought; and no waiver of any such breach, non-compliance or
non-fulfillment shall be construed or deemed to be a waiver of any
other or subsequent breach, non-compliance or
non-fulfillment.
[Signature Page
Follows]
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If
the foregoing correctly sets forth the understanding between the
Underwriters and the Company, please so indicate in the space
provided below for that purpose, whereupon this letter shall
constitute a binding agreement between us.
Very
truly yours,
▇▇▇▇▇▇▇▇▇.▇▇▇
GROUP, INC.
By:_______________
Name:
▇▇▇▇ ▇▇▇▇
Title:
Chief Executive Officer
Confirmed as of the date first written
above, on behalf of itself and as
Representative of the several Underwriters
named on Schedule 1
hereto:
▇▇▇▇▇▇
▇▇▇▇▇▇ & CO. LLC
By:
______________
▇▇▇▇▇▇▇
▇. ▇▇▇▇▇
President
SCHEDULE 1
|
Underwriter
|
Total Number of Firm
Securities to be
Purchased
|
Number of Option Securities to be Purchased if Over-Allotment
Option is Fully Exercised
|
|
|
|
Number of Firm Units
|
Number of Option Shares
|
Number of Option Warrants
|
|
▇▇▇▇▇▇ ▇▇▇▇▇▇ & Co., LLC
|
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Totals
|
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-36-
SCHEDULE 2-A
Pricing Information
Number of Firm Units: ______
Number of Option Shares: ________
Number of Option Warrants: ________
Public Offering Price per Firm Unit: $________
Public Offering Price per Option Share $________:
Public Offering Price per Option Warrant: $0.01
Underwriting Discount per Firm Unit: $0.__
Underwriting Discount per Option Share: $0.____
Underwriting Discount per Option Warrant: $0.____
Proceeds to Company per Firm Unit (before expenses and credit):
$___
Proceeds to Company per Option Share (before expenses and credit):
$___
Proceeds to Company per Option Warrant (before expenses and
credit): $0.01
Underwriting non-accountable expense allowance per Firm Unit:
$0.___
-36-
SCHEDULE 2-B
Issuer General Use Free Writing Prospectuses
S-2B
SCHEDULE 2-C
Written Testing-the-Waters Communications
None
S-2C
SCHEDULE 3
List of Lock-Up Parties
Officers:
|
▇▇▇▇▇
▇▇▇▇▇▇▇▇
▇▇▇▇
▇▇▇▇▇▇▇
▇▇▇▇
▇▇▇▇
▇▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇▇
▇▇▇▇▇▇▇
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Directors:
|
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▇▇▇▇▇▇▇
▇’▇▇▇▇▇▇
▇▇▇▇▇▇▇
▇▇▇▇
▇▇▇▇▇▇▇
▇▇▇▇
▇▇▇▇▇▇▇
▇. ▇▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇▇▇
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S-3
EXHIBIT A
Form of Representative’s Warrant
Reference
is made to Exhibit 4.9 to the
Registration Statement on Form S-1 (File Number
333-249208) of the
Company, which is incorporated by reference.
Exhibit
A
EXHIBIT B
Form of Lock-Up Agreement
[FURNISHED SEPARATELY]
US_ACTIVE--7435-7435-84.-YPHAM
Exhibit
B
EXHIBIT
C
Form of Press Release
▇▇▇▇▇▇▇▇▇.▇▇▇ Group, Inc.
[Date]
▇▇▇▇▇▇▇▇▇.▇▇▇ Group, Inc. (the
“Company”) announced today that ▇▇▇▇▇▇ ▇▇▇▇▇▇ &
Co., LLC, acting as representative for the underwriters in the
Company’s recent public offering of the Company’s
units, consisting of one share of common stock and one warrant to
purchase one share of common stock, is [waiving] [releasing] a
lock-up restriction with respect to _________ shares of the
Company’s common stock held by [certain officers, directors
or other security holders] [an officer, director or security
holder] of the Company. The [waiver] [release] will take
effect on _________, 20___, and the shares may be sold on or after
such date.
This
press release is not an offer or sale of the securities in the
United States or in any other jurisdiction where such offer or sale
is prohibited, and such securities may not be offered or sold in
the United States absent registration or an exemption from
registration under the Securities Act of 1933, as
amended.
Exhibit
C