PARKERVISION, INC. 2,156,600 Units Each Unit consisting of One Share of Common Stock and Two-tenths of a Warrant, each to Purchase One Share of Common Stock UNDERWRITING AGREEMENT
Exhibit
1.1
PARKERVISION,
INC.
2,156,600
Units
Each
Unit consisting of
One
Share of Common Stock
and
Two-tenths
of a Warrant, each to Purchase One Share of Common Stock
February
26, 2009
▇▇▇▇
CAPITAL PARTNERS, LLC
▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Ladies
and Gentlemen:
ParkerVision,
Inc., a Florida corporation (the “Company”), proposes, subject
to the terms and conditions herein, to issue and sell to ▇▇▇▇ Capital Partners,
LLC (the “Underwriter”)
an aggregate of (i) 2,156,600 shares (the “Shares”) of its common stock,
$0.01 par value per share (the “Common Stock”), and (ii)
warrants (the “Warrants”) to purchase up to
an aggregate of 431,320 shares of Common Stock (the “Warrant Shares” and,
collectively with the Shares and the Warrants, the “Securities”). The
Shares and Warrants shall be sold in units (the “Units”), each Unit consisting
of one (1) Share and two-tenths (0.20) Warrants, each to purchase one (1)
Warrant Share at the exercise price per share specified in the Prospectus (as
defined below). The Shares and the Warrants shall be immediately
separable and transferable upon issuance. The Warrants will be issued
pursuant to the terms of a Warrant Agreement (the “Warrant Agreement”) to be
entered into by and between the Company and American Stock Transfer & Trust
Company, as warrant agent (the “Warrant Agent”) in
substantially the form attached hereto as Exhibit
A.
The
Company and the Underwriter hereby confirm their agreement with respect to the
purchase and sale of the Securities as follows:
Section
1. Representations,
Warranties and Agreements of the Company.
The
Company hereby represents, warrants and covenants to the Underwriter as of the
date hereof, as of the Closing Date (as defined below) and as of each Option
Closing Date (as defined below), as follows:
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(a) Registration Statement.
(i) The Company has prepared and filed with the Securities and
Exchange Commission (the “Commission”) a registration
statement on Form S-3 (File No. 333-156571) under the Securities Act of 1933, as
amended, and the rules and regulations of the Commission thereunder
(collectively, the “Securities
Act”), and such amendments to such registration statement as may have
been required to the date of this Agreement. Such registration
statement has been declared effective by the Commission. Each part of
such registration statement, at any given time, including amendments thereto at
such time, the exhibits and any schedules thereto at such time, the documents
incorporated by reference therein pursuant to Item 12 of Form S-3 under the
Securities Act at such time and the documents and information otherwise deemed
to be a part thereof or included therein by Rule 430A, 430B or 430C under the
Securities Act or otherwise pursuant to the Securities Act at such time, is
herein called the “Registration
Statement.” Any registration statement filed by the Company
pursuant to Rule 462(b) under the Securities Act is called the “Rule 462(b) Registration
Statement” and, from and after the date and time of filing of the Rule
462(b) Registration Statement, the term “Registration Statement” shall
include the Rule 462(b) Registration Statement. The Company and the
transactions contemplated by this Agreement meet the requirements and comply
with the conditions for the use of Form S-3 under the Securities
Act. The offering of the Securities by the Company complies with the
applicable requirements of Rule 415 under the Securities Act. The
Company has complied with all requests of the Commission for additional or
supplemental information.
(ii) No
stop order preventing or suspending use of the Registration Statement, any
Preliminary Prospectus or the Prospectus or the effectiveness of the
Registration Statement, has been issued by the Commission, and no proceedings
for such purpose have been instituted or, to the Company’s knowledge, are
contemplated or threatened by the Commission.
(iii) The
Company proposes to file with the Commission pursuant to Rule 424 under the
Securities Act a final prospectus supplement to the prospectus currently
included in the Registration Statement relating to the Securities in the form
heretofore delivered to the Underwriter. Such prospectus included in
the Registration Statement at the time it was declared effective by the
Commission or in the form in which it has been most recently filed with the
Commission on or prior to the date of this Agreement is hereinafter called the
“Base
Prospectus.” Such prospectus supplement, in the form in which
it shall be filed with the Commission pursuant to Rule 424(b)(including the Base
Prospectus as so supplemented) is hereinafter called the “Prospectus.” Any
preliminary form of Prospectus which is filed or used prior to filing of the
Prospectus is hereinafter called a “Preliminary
Prospectus.” Any reference herein to the Base Prospectus, any
Preliminary Prospectus or the Prospectus or to any amendment or supplement to
any of the foregoing shall be deemed to include any documents incorporated by
reference therein pursuant to Item 12 of Form S-3 under the Securities Act as of
the date of such prospectus, and, in the case of any reference herein to the
Prospectus, also shall be deemed to include any documents incorporated by
reference therein, and any supplements or amendments thereto, filed with the
Commission after the date of filing of the Prospectus under Rule 424(b) under
the Securities Act, and prior to the termination of the offering of the
Securities by the Underwriter.
(iv) For
purposes of this Agreement, all references to the Registration Statement, the
Base Prospectus, any Preliminary Prospectus, the Prospectus or any amendment or
supplement to any of the foregoing shall be deemed to include the copy filed
with the Commission pursuant to its Electronic Data Gathering, Analysis and
Retrieval System (“▇▇▇▇▇”). All
references in this Agreement to amendments or supplements to the Registration
Statement, the Base Prospectus, any Preliminary Prospectus or the Prospectus
shall be deemed to mean and include the subsequent filing of any document under
the Exchange Act (as defined herein) and which is deemed to be incorporated
therein by reference therein or otherwise deemed to be a part
thereof.
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(b) Compliance with Registration
Requirements. As of the time of filing of the Registration
Statement or any post-effective amendment thereto, at the time it became
effective (including each deemed effective date with respect to the Underwriter
pursuant to Rule 430B under the Securities Act), at all other subsequent times
until the expiration of the Prospectus Delivery Period (as defined below), as of
the Closing Date and as of any Option Closing Date, the Registration Statement
complied and will comply, in all material respects, with the requirements of the
Securities Act and did not and will not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading. Each Preliminary
Prospectus and the Prospectus, at the time of filing or the time of first use,
at all other subsequent times until the expiration of the Prospectus Delivery
Period, as of the Closing Date and as of any Option Closing Date, complied and
will comply, in all material respects, with the requirements of the Securities
Act and did not and will 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;
provided, that the
Company makes no representations or warranty in this paragraph with respect to
any Underwriter Information (as defined in Section
7).
(c) Disclosure
Package. As of the Time of Sale (as defined below), at all
other subsequent times until the expiration of the Prospectus Delivery Period,
as of the Closing Date and as of any Option Closing Date, neither (A) the Issuer
General Free Writing Prospectus(es)(as defined below) issued at or prior to the
Time of Sale, the Statutory Prospectus (as defined below) and the information
included on Schedule
III hereto, all considered together (collectively, the “Disclosure Package”), nor
(B) any individual Issuer Limited-Use Free Writing Prospectus (as defined
below), when considered together with the Disclosure Package, included or will
include any untrue statement of a material fact or omitted or will omit to state
any material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not
misleading. No statement of material fact included in the Prospectus
has been omitted from the Disclosure Package and no statement of material fact
included in the Disclosure Package that is required to be included in the
Prospectus has been omitted therefrom; provided, that the Company
makes no representations or warranty in this paragraph with respect to any
Underwriter Information. As used in this paragraph and elsewhere in this
Agreement:
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(1)
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“Time of Sale” with
respect to any Investor, means 9:00 a.m., New York time, on the date of
this Agreement.
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(2)
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“Statutory Prospectus”
as of any time means the prospectus that is included in the Registration
Statement immediately prior to the Time of Sale, including any document
incorporated by reference therein. For purposes of this
definition, information contained in a form of prospectus that is deemed
retroactively to be a part of the Registration Statement pursuant to Rule
430A shall be considered to be included in the Statutory Prospectus as of
the actual time that form of prospectus is filed with the Commission
pursuant to Rule 424(b).
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(3)
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“Issuer Free Writing
Prospectus” means any “issuer free writing prospectus,” as defined
in Rule 433 under the Securities Act (“Rule 433”), relating to
the Securities in the form filed or required to be filed with the
Commission or, if not required to be filed, in the form retained in the
Company’s records pursuant to Rule 433(g) under the Securities
Act.
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(4)
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“Issuer General Free Writing
Prospectus” means any Issuer Free Writing Prospectus that is
intended for general distribution to prospective investors as identified
on Schedule
I hereto, and does not include a “bona fide electronic road show”
as defined in Rule 433.
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(5)
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“Issuer Limited-Use Free
Writing Prospectus” means any Issuer Free Writing Prospectus that
is not an Issuer General Free Writing Prospectus, including any “bona fide
electronic road show” as defined in Rule 433, that is made available
without restriction pursuant to Rule 433(d)(8)(ii), even though not
required to be filed with the
Commission.
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(d) Conflict with Registration
Statement. Each Issuer Free Writing Prospectus, as of its
issue date and at all subsequent times through the Prospectus Delivery Period or
until any earlier date that the Company notified or notifies the Underwriter,
did not, does not and will not include any information that conflicted,
conflicts or will conflict with the information contained in the Registration
Statement, any Statutory Prospectus or the Prospectus including any document
incorporated by reference therein and any prospectus supplement deemed to be a
part thereof that has not been superseded or modified; provided, that the Company
makes no representations or warranty in this paragraph with respect to any
Underwriter Information.
(e) Distributed Materials.
The Company has not, directly or indirectly, distributed and will not distribute
any prospectus or other offering material in connection with the offering and
sale of the Securities other than any Preliminary Prospectus, the Disclosure
Package or the Prospectus, and other materials, if any, permitted under the
Securities Act to be distributed and consistent with Section 3(d) below.
The Company will file with the Commission all Issuer Free Writing Prospectuses
in the time required under Rule 433(d) under the Securities Act. The Company has
satisfied or will satisfy the conditions in Rule 433 under the Securities Act to
avoid a requirement to file with the Commission any electronic road show. The
parties hereto agree and understand that the content of any and all “road shows”
related to the offering of the Securities contemplated hereby is solely the
property of the Company.
(f) Not an Ineligible
Issuer. (1) At the time of filing the Registration Statement
and (2) at the date hereof, the Company was not and is not an “ineligible
issuer,” as defined in Rule 405 under the Securities Act, without taking into
account any determination by the Commission pursuant to Rule 405 that it is not
necessary that the Company be considered an ineligible issuer including, without
limitation, for purposes of Rules 164 and 433 under the Securities Act with
respect to the offering of the Securities as contemplated by the Registration
Statement.
(g) Incorporated
Documents. The documents incorporated by reference in the
Disclosure Package and in the Prospectus, when they became effective or were
filed with the Commission, as the case may be, conformed in all material
respects to the requirements of the Securities Act or the Exchange Act, as
applicable, and were filed on a timely basis with the Commission and none of
such documents contained an untrue statement of a material fact or omitted to
state a material fact necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading.
(h) Due
Incorporation. The Company has been duly incorporated and is
validly existing as a corporation in good standing under the laws of the State
of Florida, with the corporate power and authority to own its properties and to
conduct its business as currently being carried on and as described in the
Registration Statement, the Disclosure Package and the
Prospectus. The Company is duly qualified to transact business as a
foreign corporation and is in good standing under the laws of each other
jurisdiction in which its ownership or leasing of property or the conduct of its
business requires such qualification, except where the failure to be so
qualified and in good standing would not, individually or in the aggregate,
result in any material adverse effect upon, or change in, the general affairs,
business, operations, prospects, properties, financial condition, or results of
operations of the Company (a “Material Adverse
Effect”).
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(i) Subsidiaries. The
Company has no significant subsidiaries (as such term is defined in Rule 1-02(w)
of Regulation S-X promulgated by the Commission) other than the Subsidiaries
listed on Schedule
II attached hereto (collectively, the “Subsidiaries”). Each
Subsidiary has been duly incorporated or organized, is validly existing as a
corporation or other legal entity in good standing (or the foreign equivalent
thereof) under the laws of the jurisdiction of its incorporation or
organization, has the corporate power and authority to own its properties and to
conduct its business as currently being carried on and as described in the
Registration Statement, the Disclosure Package and the Prospectus and is duly
qualified to transact business and is in good standing in each jurisdiction in
which the conduct of its business or its ownership, leasing or operation of
property requires such qualification, except to the extent that the failure to
be so qualified or be in good standing would not result in a Material Adverse
Effect. All of the issued and outstanding shares of capital stock or
other equity interests of each Subsidiary have been duly and validly authorized
and issued, are fully paid and non-assessable and, except as otherwise described
in the Registration Statement, the Disclosure Package and in the Prospectus, are
owned directly by the Company or through its wholly owned subsidiaries, free and
clear of all liens, encumbrances, equities or claims. There is no outstanding
option, right or agreement of any kind relating to the issuance, sale or
transfer of any capital stock or other equity securities of the Subsidiaries to
any person or entity except the Company, and none of the outstanding shares of
capital stock or other equity interests of any Subsidiary was issued in
violation of any preemptive or other rights to subscribe for or to purchase or
acquire any securities of any of the Subsidiaries. Except for the Subsidiaries,
the Company owns no beneficial interest, directly or indirectly, in any
corporation, partnership, joint venture or other business entity.
(j) Capitalization. The
Company has duly and validly authorized capital stock as set forth in each of
the Registration Statement, Disclosure Package and Prospectus; all outstanding
shares of Common Stock of the Company conform, or when issued will conform, to
the description thereof in the Registration Statement, the Disclosure Package
and the Prospectus and have been, or, when issued and paid for in the manner
described herein will be, duly authorized, validly issued, fully paid and
non-assessable; and the issuance of the Securities to be purchased from the
Company hereunder is not subject to preemptive or other similar rights, or any
restriction upon the voting or transfer thereof pursuant to applicable law or
the Company’s Articles of Incorporation, bylaws or governing documents or any
agreement to which the Company is a party or by which it may be
bound.
(k) Authorization,
Issuance. The Company has the corporate power and authority to
enter into this Agreement and the Warrant Agreement and to authorize, issue and
sell the Securities as contemplated by this Agreement. All corporate
action required to be taken by the Company for the authorization, issuance and
sale of the Securities has been duly and validly taken. The Company
has reserved a sufficient number of its duly authorized and unissued shares to
permit the full exercise of the Warrants. The Shares and the Warrant
Shares have been duly and validly authorized. When the Shares and the
Warrant Shares have been issued and delivered against payment therefor as
provided herein and in the Warrant, as the case may be, the Shares, when so
issued and sold, and the Warrant Shares, when issued upon exercise of the
Warrants, will be duly and validly issued, fully paid and non-assessable and the
Investors or other persons in whose names Shares or Warrant Shares are
registered will acquire good and valid title to such Shares or Warrant Shares,
in each case free and clear of all liens, encumbrances, equities, preemptive
rights and other claims. The Shares and the Warrant Shares will
conform in all material respects to the description thereof contained in the
Registration Statement, the Disclosure Package and the Prospectus. No
further approval or authority of the shareholders or the Board of Directors of
the Company will be required for the issuance and sale of the Shares, the
Warrants or the Warrant Shares as contemplated herein. The Warrants
conform, or when issued will conform, to the description thereof in the
Prospectus and have been duly and validly authorized by the Company and upon
issuance and delivery will be valid and binding obligations of the Company,
enforceable in accordance with their terms, except (i) as such enforceability
may be limited by bankruptcy, insolvency, reorganization, moratorium or similar
laws affecting the rights and remedies of creditors 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. Except as disclosed in each of the
Disclosure Package and Prospectus, there are no outstanding subscriptions,
rights, warrants, options, calls, convertible securities, commitments of sale or
rights related to or entitling any person to purchase or otherwise to acquire
any shares of, or any security convertible into or exchangeable or exercisable
for, the capital stock of, or other ownership interest in, the Company, except
for such options or rights as may have been granted by the Company to employees,
directors or consultants pursuant to its stock option or stock purchase
plans.
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(l) No Registration
Rights. Neither the filing of the Registration Statement nor
the offering or sale of the Securities as contemplated by this Agreement gives
rise to any rights, other than those which have been waived or satisfied, for or
relating to the registration of any shares of Common Stock or other securities
of the Company.
(m) Due Authorization and
Enforceability. Each of this Agreement and the Warrant Agreement has been
duly authorized, executed and delivered by the Company, and constitutes a valid,
legal and binding obligation of the Company, enforceable against the Company in
accordance with its terms, except as rights to indemnity hereunder may be
limited by federal or state securities laws and except (i) as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization or similar laws affecting the rights of creditors 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.
(n) No
Violation. Neither the Company nor any of the Subsidiaries is
in breach or violation of or in default (nor has any event occurred which with
notice, lapse of time or both would result in any breach or violation of, or
constitute a default) (i) under the provisions of its Articles of Incorporation,
Bylaws or other governing documents or (ii) in the performance or observance of
any term, covenant, obligation, agreement or condition contained in any
indenture, mortgage, deed of trust, bank loan or credit agreement or other
evidence of indebtedness, or any license, lease, contract or other agreement or
instrument to which the Company or any of the Subsidiaries is a party or by
which any of them or any of their properties may be bound or affected, or (iii)
in the performance or observance of any statute, law, rule, regulation,
ordinance, judgment, order or decree of any court, regulatory body,
administrative agency, governmental body, arbitrator or other authority having
jurisdiction over the Company, the Subsidiaries or any of their respective
properties, as applicable except, with respect to clauses (ii) and (iii) above,
to the extent any such contravention would not result in a Material Adverse
Effect.
(o) No Conflict. The
execution, delivery and performance by the Company of this Agreement and the
Warrant Agreement and the consummation of the transactions herein contemplated,
including the issuance and sale by the Company of the Securities, will not
conflict with or result in a breach or violation of, or constitute a default
under (nor constitute any event which with notice, lapse of time or both would
result in any breach or violation of or constitute a default under) (i) the
provisions of the Articles of Incorporation, Bylaws or other governing documents
of the Company or any of the Subsidiaries, (ii) any material indenture,
mortgage, deed of trust, bank loan or credit agreement or other evidence of
indebtedness, or any material license, lease, contract or other agreement or
instrument to which the Company or any of the Subsidiaries is a party or by
which any of them or any of their respective properties may be bound or
affected, or (iii) any federal, state, local or foreign law, regulation or rule
or any decree, judgment or order applicable to the Company or any of the
Subsidiaries.
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(p) No Consents
Required. No approval, authorization, consent or order of or
filing with any federal, state, local or foreign governmental or regulatory
commission, board, body, authority or agency, or of or with any self-regulatory
organization or other non-governmental regulatory authority (including, without
limitation, the Nasdaq Stock Market (“Nasdaq”), or approval of the
stockholders of the Company (including such as may be required pursuant to Rule
4350 of the Nasdaq Marketplace Rules), is required in connection with the
issuance and sale of the Securities, the issuance and sale of the Other
Securities or the consummation by the Company of the transactions contemplated
hereby other than (i) as may be required under the Securities Act, and (ii)
under the rules and regulations of the Financial Industry Regulatory Authority
(“FINRA”).
(q) Absence of Material Changes.
Subsequent to the respective dates as of which information is given in
the Disclosure Package, (a) neither the Company nor any of the Subsidiaries has
incurred any material liability or obligation, direct or contingent, or entered
into any material transaction not in the ordinary course of business; (b)
neither the Company nor any of the Subsidiaries has purchased any of the
Company's outstanding capital stock, or declared, paid or otherwise made any
dividend or distribution of any kind on the Company's capital stock; and (c)
there has not been any change in the capital stock (other than a change in the
number of outstanding shares of Common Stock due to the issuance of such share
of Common Stock upon the exercise of outstanding options or warrants), or
material change in the short−term debt or long−term debt of the Company and the
Subsidiaries or any issue of options, warrants, convertible securities or other
rights to purchase the capital stock (other than grants of stock options under
the Company’s stock option plans existing on the date hereof) of the
Company.
(r) Permits. The
Company and each of the Subsidiaries possess all necessary licenses,
authorizations, consents and approvals and have made all necessary filings
required under any federal, state, local or foreign law, regulation or rule in
order to conduct its business, except to the extent failure to possess such
licenses, authorizations, consents and approvals or made any required filings
has not had, and could not reasonably be expected to result in, a Material
Adverse Effect, individually or in the aggregate. Neither the Company
nor any of the Subsidiaries is in violation of, or in default under, or has
received notice of any proceedings relating to revocation or modification of,
any such license, authorization, consent or approval, except to the extent
failure to possess such licenses, authorizations, consents and approvals or made
any required filings has not had, and could not reasonably be expected to result
in, a Material Adverse Effect, individually or in the aggregate. The
Company and each of the Subsidiaries is in compliance in all material respects
with all applicable federal, state, local and foreign laws, regulations, orders
or decrees.
(s) Legal Proceedings. There are
no legal or governmental proceedings pending or, to the Company’s knowledge,
threatened or contemplated to which the Company or any of the Subsidiaries is or
would be a party or of which any of their respective properties is or would be
subject at law or in equity, before or by any federal, state, local or foreign
governmental or regulatory commission, board, body, authority or agency, or
before or by any self-regulatory organization or other non-governmental
regulatory authority (including, without limitation, Nasdaq), except (i) as
described in the Registration Statement, the Disclosure Package and the
Prospectus, (ii) any such proceeding that could reasonably be expected to result
in a judgment, decree or order having, individually or in the aggregate, a
Material Adverse Effect or (iii) any such proceeding that would not prevent or
materially and adversely affect the ability of the Company to consummate the
transactions contemplated hereby. The Disclosure Package contains in all
material respects the same description of the foregoing matters, if any,
contained in the Prospectus.
(t) Statutes;
Contracts. There are no statutes or regulations applicable to
the Company or contracts or other documents of the Company which are required to
be described in the Registration Statement, the Disclosure Package or the
Prospectus or filed as exhibits to the Registration Statement by the Securities
Act which have not been so described or filed.
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(u) Independent
Accountants. PricewaterhouseCoopers, who is the Company’s
independent accounting firm, is an independent registered certified public
accounting firm (as defined in Section 2(a)(12) of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of
2002 (the “▇▇▇▇▇▇▇▇-▇▇▇▇▇
Act”)) with respect to the Company within the meaning of the Securities
Act and the applicable rules and regulations thereunder adopted by the
Commission and the Public Company Accounting Oversight Board (United
States).
(v) Financial
Statements. The financial statements of the Company, together
with the related schedules and notes thereto, set forth or incorporated by
reference in the Registration Statement, the Disclosure Package and the
Prospectus comply in all material respects with the applicable requirements of
the Securities Act and the Exchange Act, as applicable, and present fairly in
all material respects (i) the financial condition of the Company and the
Subsidiaries, taken as a whole, as of the dates indicated and (ii) the
consolidated results of operations, stockholders’ equity and changes in cash
flows of the Company and the Subsidiaries, taken as a whole, for the periods
therein specified; and such financial statements and related schedules and notes
thereto have been prepared in conformity with United States generally accepted
accounting principles, consistently applied throughout the periods involved
(except as otherwise stated therein and subject, in the case of unaudited
financial statements, to the absence of footnotes and normal year-end
adjustments). There are no other financial statements (historical or
pro forma) that are required to be included in the Registration Statement, the
Disclosure Package and the Prospectus; and the Company and the Subsidiaries do
not have any material liabilities or obligations, direct or contingent
(including any off-balance sheet obligations), not disclosed in the Registration
Statement, the Disclosure Package and the Prospectus; and all disclosures
contained in the Registration Statement, the Disclosure Package and the
Prospectus regarding “non-GAAP financial measures” (as such term is defined by
the rules and regulations of the Commission) comply with Regulation G of the
Exchange Act and Item 10(e) of Regulation S-K of the Commission, to the extent
applicable, and present fairly the information shown therein and the Company’s
basis for using such measures.
(w) No Material Adverse
Change. There has not been any material adverse change, or any
development involving a prospective material adverse change, in the business,
properties, management, financial condition or results of operations of the
Company and the Subsidiaries, taken as a whole, from that set forth in the
Disclosure Package (exclusive of any amendments or supplements thereto
subsequent to the date of this Agreement).
(x) Not an Investment
Company. Neither the Company nor any of the Subsidiaries is
or, after giving effect to the offering and sale of the Securities and the Other
Securities and the application of the proceeds thereof as described in the
Prospectus, will be required to register as an “investment company” as defined
in the Investment Company Act of 1940, as amended.
(y) Good Title to
Property. The Company and each of the Subsidiaries has good
and valid title to all property (whether real or personal) described in the
Registration Statement, the Disclosure Package and the Prospectus as being owned
by each of them, in each case free and clear of all liens, claims, security
interests, other encumbrances or defects except such as are described in the
Registration Statement, the Disclosure Package and the Prospectus and those that
would not, individually or in the aggregate materially and adversely affect the
value of such property and do not materially and adversely interfere with the
use made and proposed to be made of such property by the Company and the
Subsidiaries. All of the property described in the Registration
Statement, the Disclosure Package and the Prospectus as being held under lease
by the Company or a Subsidiary is held thereby under valid, subsisting and
enforceable leases, without any liens, restrictions, encumbrances or claims,
except those that, individually or in the aggregate, are not material and do not
materially interfere with the use made and proposed to be made of such property
by the Company and the Subsidiaries.
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(z) Intellectual Property
Rights. The Company and the Subsidiaries own, or have obtained
valid and enforceable licenses for, or other rights to use, the inventions,
patent applications, patents, trademarks (both registered and unregistered),
tradenames, copyrights, trade secrets and other proprietary information
described in the Registration Statement, the Disclosure Package and the
Prospectus as being owned or licensed by them or which are necessary for the
conduct of their respective businesses, except where the failure to own, license
or have such rights would not, individually or in the aggregate, result in a
Material Adverse Effect (collectively, “Intellectual Property”);
except as described in the Registration Statement, the Disclosure Package and
the Prospectus (i) there are no third parties who have or, to the Company’s
knowledge, will be able to establish rights to any Intellectual Property, except
for the ownership rights of the owners of the Intellectual Property which is
licensed to the Company; (ii) to the Company’s knowledge, there is no
infringement by third parties of any Intellectual Property; (iii) there is no
pending or, to the Company’s knowledge, threatened action, suit, proceeding or
claim by others challenging the Company’s rights in or to, or the validity,
enforceability, or scope of, any Intellectual Property owned by or licensed to
the Company, and the Company is unaware of any facts which could form a
reasonable basis for any such claim; (iv) there is no pending or, to the
Company’s knowledge, threatened action, suit, proceeding or claim by others that
the Company or any of the Subsidiaries infringes or otherwise violates any
patent, trademark, copyright, trade secret or other proprietary rights of
others, and the Company is unaware of any facts which could form a reasonable
basis for any such claim; (v) to the Company’s knowledge, there is no patent or
patent application that contains claims that interfere with the issued or
pending claims of any of the Intellectual Property; and (vi) to the Company’s
knowledge and belief, there is no prior art that may render any patent owned by
the Company invalid, nor is there any prior art known to the Company that may
render any patent application owned by the Company unpatentable.
(aa) Taxes. The Company
and each of the Subsidiaries has timely filed all material federal, state, local
and foreign income and franchise tax returns (or timely filed applicable
extensions therefore) that have been required to be filed and are not in default
in the payment of any taxes which were payable pursuant to said returns or any
assessments with respect thereto, other than any which the Company or any of the
Subsidiaries is contesting in good faith and for which adequate reserves have
been provided and reflected in the Company’s financial statements included in
the Registration Statement, the Disclosure Package and the
Prospectus. Neither the Company nor any of the Subsidiaries has any
tax deficiency that has been or, to the knowledge of the Company, might be
asserted or threatened against it that would result in a Material Adverse
Effect.
(bb) Insurance. The
Company and each of the Subsidiaries maintains insurance in such amounts and
covering such risks as is adequate for the conduct of its business and the value
of its properties. All such insurance is fully in force on the date
hereof and will be fully in force as of the Closing Date. Neither the
Company nor any of the Subsidiaries has any reason to believe that it will not
be able to renew its existing insurance coverage as and when such coverage
expires or to obtain similar coverage from similar insurers as may be necessary
to continue its business at a cost that would not have a Material Adverse
Effect.
(cc) Accounting
Controls. The Company and each of the Subsidiaries maintains a
system of internal accounting controls sufficient to provide reasonable
assurances that (i) transactions are executed in accordance with management’s
general or specific authorization; (ii) transactions are recorded as necessary
to permit preparation of financial statements in conformity with generally
accepted accounting principles 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.
-9-
(dd) Disclosure
Controls. The Company has established, maintains and evaluates
“disclosure controls and procedures” (as such term is defined in Rule 13a-15(e)
and 15d-15(e) under the Exchange Act), which (i) are designed to ensure that
material information relating to the Company is made known to the Company’s
principal executive officer and its principal financial officer by others within
those entities, particularly during the periods in which the periodic reports
required under the Exchange Act are being prepared, (ii) have been evaluated for
effectiveness as of the end of the last fiscal period covered by the
Registration Statement; and (iii) such disclosure controls and procedures are
effective to perform the functions for which they were established. There are no
significant deficiencies and material weaknesses in the design or operation of
internal controls which could adversely affect the Company’s ability to record,
process, summarize, and report financial data to management and the Board of
Directors. The Company is not aware of any fraud, whether or not material, that
involves management or other employees who have a role in the Company’s internal
controls; and since the date of the most recent evaluation of such disclosure
controls and procedures, there have been no significant changes in internal
controls or in other factors that could significantly affect internal controls,
including any corrective actions with regard to significant deficiencies and
material weaknesses.
(ee) Corrupt
Practices. Neither the Company nor, to the Company’s
knowledge, any other person associated with or acting on behalf of the Company,
including without limitation any director, officer, agent or employee of the
Company or the Subsidiaries has, directly or indirectly, while acting on behalf
of the Company or the Subsidiaries (i) used any corporate funds for unlawful
contributions, gifts, entertainment or other unlawful expenses relating to
political activity, (ii) made any unlawful payment to foreign or domestic
government officials or employees or to foreign or domestic political parties or
campaigns from corporate funds, (iii) violated any provision of the Foreign
Corrupt Practices Act of 1977, as amended or (iv) made any other unlawful
payment.
(ff) No Price
Stabilization. Neither the Company nor any of the Subsidiaries
nor, to the Company’s knowledge, any of their respective officers, directors,
affiliates or controlling persons has taken or will take, directly or
indirectly, any action designed to cause or result in, or which has constituted
or which might reasonably be expected to constitute the stabilization or
manipulation of the price of any security of the Company to facilitate the sale
or resale of the Securities.
(gg) No Undisclosed
Relationships. No relationship, direct or indirect, exists
between or among the Company on the one hand and the directors, officers,
stockholders, customers or suppliers of the Company on the other hand which is
required to be described in the Registration Statement, the Disclosure Package
and the Prospectus which has not been so described. There are no outstanding
loans, advances (except normal advances for business expenses in the ordinary
course of business) or guarantees of indebtedness by the Company to or for the
benefit of any of the officers or directors of the Company or any member of
their respective immediate families, except as disclosed in the Registration
Statement, the Disclosure Package and the Prospectus. The Company has not, in
violation of the Sarbanes Oxley Act, directly or indirectly, extended or
maintained credit, arranged for the extension of credit, or renewed an extension
of credit, in the form of a personal loan to or for any director or executive
officer of the Company.
(hh) ▇▇▇▇▇▇▇▇-▇▇▇▇▇
Act. The Company, and to its knowledge after due inquiry, all
of the Company’s directors or officers, in their capacities as such, are in
compliance in all material respects with all applicable effective provisions of
the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act and any related rules and regulations promulgated by the
Commission.
(ii) Brokers
Fees. Except as previously disclosed to the Underwriter in
writing, neither the Company nor any of the Subsidiaries is a party to any
contract, agreement or understanding with any person (other than this Agreement)
that would give rise to a valid claim against the Company or the Subsidiaries or
the Underwriter for a brokerage commission, finder’s fee or other like payment
in connection with the offering and sale of the Securities.
-10-
(jj) Exchange Act Requirements.
The Company has filed in a timely manner all reports required to be filed
pursuant to Sections 13(a), 13(e), 14 and 15(d) of the Exchange Act during the
preceding 12 months (except to the extent that Section 15(d) requires reports to
be filed pursuant to Sections 13(d) and 13(g) of the Exchange Act, which shall
be governed by the next clause of this sentence); and the Company has filed in a
timely manner all reports required to be filed pursuant to Sections 13(d) and
13(g) of the Exchange Act since January 1, 2004, except where the failure to
timely file could not reasonably be expected individually or in the aggregate to
have a Material Adverse Effect.
(kk) FINRA
Affiliations. To the Company’s knowledge, there are no
affiliations or associations between (i) any member of FINRA and (ii) the
Company or any of the Company’s officers, directors or 5% or greater
securityholders or any beneficial owner of the Company’s unregistered equity
securities that were acquired at any time on or after the one hundred eightieth
(180th) day
immediately preceding the date the Registration Statement was initially filed
with the Commission, except as set forth in the Registration Statement, the
Disclosure Package and the Prospectus.
(ll) Compliance with Environmental
Laws. The Company and the Subsidiaries (a) are in compliance
with any and all applicable foreign, federal, state and local laws, orders,
rules, regulations, directives, decrees and judgments relating to the protection
of human health and safety, the environment or hazardous or toxic substances or
wastes, pollutants or contaminants (“Environmental Laws”), (b)
have received all permits, licenses or other approvals required of them under
applicable Environmental Laws to conduct their respective businesses and (c) are
in compliance with all terms and conditions of any such permit, license or
approval, except where such noncompliance with Environmental Laws, failure to
receive required permits, licenses or other approvals or failure to comply with
the terms and conditions of such permits, licenses or approvals would not,
individually or in the aggregate, result in a Material Adverse
Effect. Neither the Company nor any of the Subsidiaries is subject to
any costs or liabilities associated with Environmental Laws (including, without
limitation, any capital or operating expenditures required for clean-up, closure
of properties or compliance with Environmental Laws or any permit, license or
approval, any related constraints on operating activities and any potential
liabilities to third parties) which would, individually or in the aggregate,
result in a Material Adverse Effect.
(mm) No Labor
Disputes. Neither the Company nor any Subsidiary is engaged in
any unfair labor practice; except for matters that would not, individually or in
the aggregate, result in a Material Adverse Effect (i) there is (A)
no unfair labor practice complaint pending or, to the Company’s knowledge after
due inquiry, threatened against the Company or any Subsidiary before the
National Labor Relations Board, and no grievance or arbitration proceeding
arising out of or under collective bargaining agreements is pending or, to the
Company’s knowledge after due inquiry, threatened, (B) no strike, labor dispute,
slowdown or stoppage pending or, to the Company’s knowledge after due inquiry,
threatened against the Company or any Subsidiary and (C) no union representation
dispute currently existing concerning the employees of the Company or any
Subsidiary, and (ii) to the Company’s knowledge (A) no union organizing
activities are currently taking place concerning the employees of the Company or
any Subsidiary and (B) there has been no violation of any federal, state, local
or foreign law relating to discrimination in the hiring, promotion or pay of
employees or any applicable wage or hour laws concerning the employees of the
Company.
(nn) ERISA. The Company
is in compliance in all material respects with all presently applicable
provisions of the Employee Retirement Income Security Act of 1974, as amended,
including the regulations and published interpretations thereunder (“ERISA”); no “reportable
event” (as defined in ERISA) has occurred with respect to any “pension plan” (as
defined in ERISA) for which the Company would have any liability; the Company
has not incurred and does not expect to incur liability under (i) Title IV of
ERISA with respect to termination of, or withdrawal from, any “pension plan” or
(ii) Sections 412 or 4971 of the Internal Revenue Code of 1986, as amended,
including the regulations and published interpretations thereunder (the “Code”); and each “pension
plan” for which the Company would have any liability that is intended to be
qualified under Section 401(a) of the Code is so qualified in all material
respects and nothing has occurred, whether by action or by failure to act, which
would cause the loss of such qualification.
-11-
(oo) Nasdaq; Exchange Act
Registration. The Shares and the Warrant Shares are registered
pursuant to Section 12(b) or 12(g) of the Exchange Act and are accepted for
quotation on the Nasdaq Global Market, and the Company has taken no action
designed to terminate, or likely to have the effect of terminating, the
registration of the Shares and Warrant Shares under the Exchange Act or
delisting the Shares and the Warrant Shares from the Nasdaq Global Market, nor
has the Company received any notification that the Commission or FINRA is
contemplating terminating such registration or listing. The Company has complied
in all material respects with the applicable requirements of the Nasdaq Global
Market for maintenance of inclusion of the Shares and Warrant Shares, as the
case may be, thereon.
(pp) PFIC Status. The
Company is not, for the taxable year ended December 31, 2008, and upon
consummation of the transactions described hereby, the issuance and sale of the
Other Securities and the application of the proceeds as described in the
Registration Statement, the Disclosure Package and the Prospectus is not
expected to become, a Passive Foreign Investment Company within the meaning of
Section 1297 of the Internal Revenue Code, as amended.
(qq) Statistical or Market-Related
Data. Any statistical, industry-related and market-related
data included or incorporated by reference in the Registration Statement, the
Disclosure Package and the Prospectus, are based on or derived from sources that
the Company reasonably and in good faith believes to be reliable and accurate,
and such data agree with the sources from which they are derived.
(rr) Descriptions of
Documents. The statements set forth in each of the Disclosure
Package and the Prospectus describing the Securities, this Agreement and the
Warrant Agreement, 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.
(ss) Money Laundering
Laws. The operations of the Company are and have been
conducted at all times in compliance in all material respects with applicable
financial recordkeeping and reporting requirements of the Currency and Foreign
Transactions Reporting Act of 1970, as amended, the money laundering statutes of
all jurisdictions, the rules and regulations thereunder and any related or
similar rules, regulations or guidelines, issued, administered or enforced by
any governmental agency (collectively, the “Money Laundering Laws”) and
no action, suit or proceeding by or before any court or governmental agency,
authority or body or any arbitrator involving the Company with respect to the
Money Laundering Laws is pending, or to the knowledge of the Company,
threatened.
(tt) OFAC. Neither the
Company nor any of the Subsidiaries nor, to the knowledge of the Company, any
director, officer, agent, employee or affiliate of the Company or any of the
Subsidiaries is currently subject to any U.S. sanctions administered by the
Office of Foreign Assets Control of the U.S. Treasury Department (“OFAC”); 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 subsidiary, joint venture
partner or other person or entity that, to the Company’s knowledge, will use
such proceeds, for the purpose of financing the activities of any person
currently subject to any U.S. sanctions administered by OFAC.
-12-
Any
certificate signed by any officer of the Company or a Subsidiary and delivered
to the Underwriter or to counsel for the Underwriter in connection with the
offering of the Securities shall be deemed a representation and warranty by the
Company (and not such officer in an individual capacity) to the Underwriter as
to the matters covered thereby.
Section
2. Purchase, Sale and Delivery of
Securities.
(a) Purchase and Sale of
Securities. On the basis of the representations, warranties
and agreements herein contained, but subject to the terms and conditions herein
set forth, the Company agrees to issue and sell the Securities to the
Underwriter, and the Underwriter agrees to purchase from the Company the
Securities as set forth opposite the name of such Underwriter below on the
signature page hereof. The pricing terms of the purchase of the Units
by the Underwriter and the pricing terms of the offering of the Units to the
public are as set forth in Schedule III
hereto.
In
addition, the Company hereby grants to the Underwriter the option to purchase an
aggregate of up to 15% of the Securities purchased pursuant to this Agreement
(the “Additional
Securities”) and, upon the basis of the warranties and representations
and subject to the terms and conditions herein set forth, the Underwriter shall
have the right to purchase, from the Company (subject to such adjustment as you
shall determine to avoid fractional shares), all or a portion of such Additional
Securities as may be necessary to cover over-allotments, if any, made in
connection with the offering of the Securities, at the same purchase price per
share to be paid by the Underwriter to the Company for the
Securities. This option may be exercised by you in whole or in part,
and at any time or from time to time on or before the thirtieth day following
the date hereof, by written notice to the Company. Such notice shall
set forth the aggregate number of Additional Securities as to which the option
is being exercised, and the date and time when the Additional Securities are to
be delivered (such date and time being herein referred to as an “Option Closing Date”); provided, however, that no
Option Closing Date shall be earlier than the Closing Date (as defined below)
nor earlier than the first business day after the date on which the option shall
have been exercised with respect to the Additional Securities to be purchased on
such Option Closing Date nor later than the fifth business day after the date on
which the option shall have been exercised with respect to the Additional
Securities to be purchased on such Option Closing Date unless the Company and
you otherwise agree. Unless the context otherwise requires,
references herein to the “Securities” shall also refer to and include the
Additional Securities.
Payment
of the purchase price and delivery for the Additional Securities shall be made
at the Option Closing Date in the same manner and at the same office as the
payment for the Securities as set forth in subparagraph (b)
below. Any closing of the purchase of Additional Securities hereunder
is hereinafter referred to as an “Option
Closing”).
(b) The
Securities will be delivered by the Company by credit through full fast transfer
to the account at The Depository Trust Company designated by the Underwriter or,
if so elected by the Underwriter by physical delivery, in each case against
payment of the purchase price therefor by wire transfer of same day funds
payable to the order of the Company, as appropriate, at the offices of ▇▇▇▇
Capital Partners, LLC, ▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇, or such
other location as may be mutually acceptable, at 6:00 a.m. PST or Central time,
respectively, on the third (or if the Securities are priced, as contemplated by
Rule 15c6-1(c) under the Exchange Act, after 4:30 p.m. Eastern time, the fourth)
full business day following the date hereof, or at such other time and date as
the Underwriter and the Company determine pursuant to Rule 15c6-1(a) under the
Exchange Act, such time and date of delivery being herein referred to as the
“Closing
Date.”
(c) The
Underwriter shall use its commercially reasonable best efforts not to knowingly
sell Units to any purchaser who is purchasing Other Securities.
-13-
Section
3. Covenants.
The
Company covenants and agrees with the Underwriter as follows:
(a) Reporting Obligations; Exchange Act
Compliance. The Company will (i) file the Preliminary
Prospectus and the Prospectus with the Commission within the time periods
specified by Rule 424(b) and Rules 430A, 430B and 430C, as applicable under the
Securities Act, (ii) file any Issuer Free Writing Prospectus to the extent
required by Rule 433 under the Securities Act, if applicable, (iii) file
promptly all reports required to be filed by the Company with the Commission
pursuant to Section 13(a), 13(c) or 15(d) of the Exchange Act subsequent to the
date of the Prospectus and during such period as the Prospectus would be
required by law to be delivered (whether physically or through
compliance with Rule 172 under the Securities Act or any similar rule) (the
“Prospectus Delivery
Period”), and (iv) furnish copies of each Issuer Free Writing Prospectus,
if any, (to the extent not previously delivered) to the Underwriter prior to
11:00 a.m. Eastern time, on the second business day next succeeding the date of
this Agreement in such quantities as the Underwriter shall reasonably
request.
(b) Abbreviated Registration
Statement. If the Company elects to rely upon Rule 462(b)
under the Securities Act, the Company shall file a registration statement under
Rule 462(b) with the Commission in compliance with Rule 462(b) by 8:00 a.m.,
Eastern time, on the business day next succeeding the date of this Agreement,
and the Company shall at the time of filing either pay to the Commission the
filing fee for such Rule 462(b) registration statement or give irrevocable
instructions for the payment of such fee pursuant to the Rules and
Regulations.
(c) Amendments or
Supplements. The Company will not, during the Prospectus Delivery Period in
connection with the offering contemplated by this Agreement, file any amendment
or supplement to the Registration Statement or the Prospectus (other than in
connection with the issuance and sale of the Other Securities) unless a copy
thereof shall first have been submitted to the Underwriter within a reasonable
period of time prior to the filing thereof and the Underwriter shall not have
reasonably objected thereto in good faith.
(d) Free Writing
Prospectuses. The Company will (i) not make any offer relating
to the Securities that would constitute an “issuer free writing prospectus” (as
defined in Rule 433) or that would otherwise constitute a “free writing
prospectus” (as defined in Rule 405 under the Securities Act) required to be
filed by the Company with the Commission under Rule 433 under the Securities Act
unless the Underwriter approves its use in writing prior to first use (each, a
“Permitted Free Writing
Prospectus”); provided that the prior
written consent of the Underwriter hereto shall be deemed to have been given in
respect of the Issuer Free Writing Prospectus(es) included in Schedule I hereto;
(ii) treat each Permitted Free Writing Prospectus as an Issuer Free Writing
Prospectus; (iii) comply with the requirements of Rules 164 and 433 under the
Securities Act applicable to any Issuer Free Writing Prospectus, including the
requirements relating to timely filing with the Commission, legending and record
keeping and (iv) not take any action that would result in the Underwriter or the
Company being required to file with the Commission pursuant to Rule 433(d) under
the Securities Act a free writing prospectus prepared by or on behalf of such
Underwriter that such Underwriter otherwise would not have been required to file
thereunder. The Company will use its commercially reasonable best efforts to
satisfy the conditions in Rule 433 under the Securities Act to avoid a
requirement to file with the Commission any electronic road show.
-14-
(e) Notice to
Underwriter. The Company will notify the
Underwriter promptly, and will, if requested, confirm such
notification in writing: (i) the receipt of any comments of, or requests for
additional information from, the Commission; (ii) the time and date of any
filing of any post-effective amendment to the Registration Statement or any
amendment or supplement to the Disclosure Package or the Prospectus, (iii) the
time and date when any post-effective amendment to the Registration Statement
becomes effective, but only during the Prospectus Delivery Period; (iv) of the
issuance by the Commission of any stop order suspending the effectiveness of the
Registration Statement, or any post-effective amendment thereto or any order
preventing or suspending the use of any Preliminary Prospectus, the Disclosure
Package, the Prospectus or any Issuer Free Writing Prospectus, or the initiation
of any proceedings for that purpose or the threat thereof, but only during the
Prospectus Delivery Period; (v) of receipt by the Company of any notification
with respect to any suspension or the approval of the Shares and Warrant Shares
from any securities exchange upon which it is listed for trading or included or
designated for quotation, or the initiation or threatening of any proceeding for
such purpose. The Company will use its commercially reasonable best
efforts to prevent the issuance or invocation of any such stop order or
suspension by the Commission and, if any such stop order or suspension is so
issued or invoked, to obtain as soon as possible the withdrawal or removal
thereof.
(f) Filing of Amendments or
Supplements. If, during the Prospectus Delivery Period, any event shall
occur or condition exist as a result of which it is necessary to amend or
supplement the Prospectus (or, if the Prospectus is not yet available to
prospective purchasers, the Disclosure Package) in order to make the statements
therein, in the light of the circumstances when the Prospectus (or, if the
Prospectus is not yet available to prospective purchasers, the Disclosure
Package) is delivered to an Investor, not misleading, or if, in the opinion of
counsel for the Underwriter, it is necessary to amend or supplement the
Prospectus (or, if the Prospectus is not yet available to prospective
purchasers, the Disclosure Package) to comply with applicable law, forthwith to
prepare, file with the Commission and furnish, at its own expense, to the
Underwriter, either amendments or supplements to the Prospectus (or, if the
Prospectus is not yet available to prospective purchasers, the Disclosure
Package) so that the statements in the Prospectus (or, if the Prospectus is not
yet available to prospective purchasers, the Disclosure Package) as so amended
or supplemented will not, in the light of the circumstances when the Prospectus
(or, if the Prospectus is not yet available to prospective purchasers, the
Disclosure Package) is delivered to an Investor, be misleading or so that the
Prospectus (or, if the Prospectus is not yet available to prospective
purchasers, the Disclosure Package), as amended or supplemented, will comply
with law. If at any time following issuance of an Issuer Free Writing Prospectus
there occurred or occurs an event or development as a result of which such
Issuer Free Writing Prospectus conflicted or would conflict with the information
contained in the Registration Statement relating to the Securities or included
or would include an untrue statement of a material fact or omitted or would omit
to state a material fact necessary in order to make the statements therein, in
the light of the circumstances prevailing at that subsequent time, not
misleading, the Company promptly will notify the Underwriter and will promptly
amend or supplement, at its own expense, such Issuer Free Writing Prospectus to
eliminate or correct such conflict, untrue statement or omission.
(g) Delivery of
Copies. The Company will deliver promptly to the Underwriter
and its counsel such number of the following documents as the Underwriter shall
reasonably request: (i) conformed copies of the Registration
Statement as originally filed with the Commission and each amendment thereto (in
each case excluding exhibits), (ii) copies of any Preliminary Prospectus or
Issuer Free Writing Prospectus, (iii) during the Prospectus Delivery Period,
copies of the Prospectus (or any amendments or supplements thereto); (iii) any
document incorporated by reference in the Prospectus (other than any such
document that is filed with the Commission electronically via ▇▇▇▇▇ or any
successor system) and (iv) all correspondence to and from, and all documents
issued to and by, the Commission in connection with the registration of the
Securities under the Securities Act.
(h) Earnings
Statement. As soon as practicable, but in any event not later
than 15 months after the end of the Company’s current fiscal quarter, the
Company will make generally available to holders of its securities and deliver
to the Underwriter, an earnings statement of the Company (which need not be
audited) that will satisfy the provisions of Section 11(a) and Rule 158 of the
Securities Act.
-15-
(i) Use of
Proceeds. The Company will apply the net proceeds from the
sale of the Securities in the manner set forth in the Registration Statement,
Disclosure Package and the Prospectus under the heading “Use of
Proceeds”.
(j) Public
Communications. Prior to the Closing Date, the Company will
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 the earnings, business, operations or prospects of any of them,
or the offering of the Securities, without the prior written consent of the
Underwriter, which consent shall not be unreasonably withheld, unless in the
reasonable judgment of the Company and its counsel, and after notification to
the Underwriter, such press release or communication is required by law, in
which case the Company shall use its commercially reasonable best efforts to
allow the Underwriter reasonable time to comment on such release or other
communication in advance of such issuance.
(k) Lock-Up
Period. Except as disclosed in the Disclosure Package and
except for the Other Securities, for a period of 30 days after the date hereof
(the “Lock-Up Period”),
the Company will not directly or indirectly, (1) offer to sell, hypothecate,
pledge, announce the intention to sell, sell, contract to sell, sell any option
or contract to purchase (to the extent such option or contract to purchase is
exercisable within one year from the Closing Date), purchase any option or
contract to sell, grant any option, right or warrant to purchase or otherwise
transfer or dispose of, directly or indirectly, or establish or increase a put
equivalent position or liquidate or decrease a call equivalent position within
the meaning of Section 16 of the Exchange Act, with respect to, any shares of
Common Stock, or any securities convertible into or exercisable or exchangeable
for shares of Common Stock; (2) file or cause to become effective a registration
statement under the Securities Act relating to the offer and sale of any shares
of Common Stock or securities convertible into or exercisable or exchangeable
for shares of Common Stock or (3) enter into any swap or other agreement that
transfers, in whole or in part, any of the economic consequences of ownership of
the Common Stock, whether any such transaction described in clauses (1), (2) or
(3) above is to be settled by delivery of shares of Common Stock or such other
securities, in cash or otherwise, without the prior written consent of the
Underwriter (which consent may be withheld in its sole discretion), other than
(i) the Securities to be sold hereunder, (ii) the issuance of employee stock
options or shares of restricted stock pursuant to equity compensation plans
described in the Registration Statement (excluding the exhibits thereto) and the
Disclosure Package and the Prospectus, (iii) issuances of shares of
Common Stock upon the exercise of options or warrants disclosed as outstanding
in the Registration Statement (excluding the exhibits thereto) and the
Disclosure Package and the Prospectus or upon the conversion or exchange of
convertible or exchangeable securities outstanding as of the date of this
Agreement; (iv) the issuance by the Company of any shares of Common Stock or
securities convertible or exchangeable into shares of Common Stock as
consideration for mergers, acquisitions, other business combinations, or
strategic alliances, occurring after the date of this Agreement; provided that each recipient
of shares pursuant to this clause (iv) agrees that all such shares remain
subject to restrictions substantially similar to those contained in this subsection 3(k); or
(v) the purchase or sale of the Company’s securities pursuant to a plan,
contract or instruction that satisfies all of the requirements of Rule
10b5-1(c)(1)(i)(B) that was in effect prior to the date
hereof. Notwithstanding the foregoing, for the purpose of allowing
the Underwriter to comply with FINRA Rule 2711(f)(4), if (1) during the last 17
days of the Lock-Up Period, the Company releases earnings results or publicly
announces other material news or a material event relating to the Company occurs
or (2) prior to the expiration of the Lock-Up Period, the Company announces that
it will release earnings results during the 16 day period beginning on the last
day of the Lock-Up Period, then in each case the Lock-Up Period will be extended
until the expiration of the 18 day period beginning on the date of release of
the earnings results or the public announcement regarding the material news or
the occurrence of the material event, as applicable, unless the Underwriter
waives, in writing, such extension. The Underwriter agrees to waive
such extension if the provisions of FINRA Rule 2711(f)(4) are not applicable to
the Offering. The Company agrees not to accelerate the vesting of any option or
warrant or the lapse of any repurchase right prior to the expiration of the
Lock-Up Period.
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(l) Stabilization. The
Company will not take directly or indirectly any action designed, or that might
reasonably be expected to cause or result in, or that will constitute,
stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of any of the Securities.
(m) Transfer
Agent. The Company shall engage and maintain, at its expense,
a transfer agent and, if necessary under the jurisdiction of incorporation of
the Company, a registrar for the Shares and Warrant
Shares.
(n) Warrant Agent. The
Company shall engage and maintain, at its expense, a transfer agent and, if
necessary under the jurisdiction of incorporation of the Company, a registrar
for the Warrants.
(o) Investment Company
Act. The Company shall not invest, or otherwise use the
proceeds received by the Company from its sale of the Securities and the Other
Securities in such a manner as would require the Company to register as an
investment company under the Investment Company Act.
(p) ▇▇▇▇▇▇▇▇-▇▇▇▇▇
Act. The Company will comply with all effective applicable
provisions of the Sarbanes Oxley Act.
(q) Periodic
Reports. The Company will file with the Commission such
periodic and special reports as required by the Securities Act.
(r) No Warrant
Adjustments. For a period of sixty (60) days from the date
hereof, the Company shall not lower the exercise price of its outstanding
warrants, increase the number of shares of Common Stock issuable upon the
exercise of such warrants or extend the expiration date of such warrants; provided, however, that the
provisions of this sentence shall not prohibit an adjustment in the exercise
price or the number of shares issuable upon the exercise price of the warrants
occurring in accordance with the terms of the warrants as outstanding on the
date hereof.
(s) Nasdaq. The
Company will use its commercially reasonable best efforts to obtain approval
for, and maintain the listing of the Shares and the Warrant Shares on the Nasdaq
Global Market for so long as the Common Stock is listed thereon.
Section
4. Costs and
Expenses.
The
Company, whether or not the transactions contemplated hereunder are consummated
or this Agreement is terminated, will pay or reimburse if paid by the
Underwriter all actual out-of-pocket costs and expenses incident to the
performance of the obligations of the Company under this Agreement and in
connection with the transactions contemplated hereby, including but not limited
to costs and expenses of or relating to (i) the preparation, printing, filing,
delivery and shipping of the Registration Statement, any Issuer Free Writing
Prospectus, each Preliminary Prospectus, the Disclosure Package and the
Prospectus, and any amendment or supplement to any of the foregoing and the
printing and furnishing of copies of each thereof to the Underwriter and dealers
(including costs of mailing and shipment), (ii) the registration, issue, sale
and delivery of the Securities including any stock or transfer taxes and stamp
or similar duties payable upon the sale, issuance or delivery of the Securities
and the printing, delivery, and shipping of the certificates representing the
Securities, (iii) the fees and expenses of any warrant agent for the Warrants
and any transfer agent or registrar for the Shares and Warrant Shares, (iv) the
filing fees required to be paid by the Underwriter or the Company with FINRA
(including all COBRADesk fees), (v) fees, disbursements and other charges of
counsel to the Company (vi) listing fees, if any, for the listing or quotation
of the Shares and Warrant Shares on the Nasdaq Global Market, (vii) fees and
disbursements of the Company’s auditor incurred in delivering the letter(s)
described in Section
5(i) of this Agreement, (viii) reasonable fees
and disbursements of counsel to the Underwriter, and (ix) the costs
and expenses of the Company and the Underwriter in connection with the marketing
of the offering and the sale of the Securities to prospective investors
including, but not limited to, those related to any presentations or meetings
undertaken in connection therewith including, without limitation, expenses
associated with the production of road show slides and graphics, fees and
expenses of any consultants engaged with the written consent of the Company in
connection with the road show presentations, travel, lodging and other expenses
incurred by the officers of the Company and any such consultants, and the cost
of any aircraft or other transportation chartered by the Company in connection
with the road show ; provided,
however, that the maximum amount of actual out-of-pocket costs and
expenses to be paid by the Company in connection with the transactions
contemplated hereby and the issuance and sale of the Other Securities shall be
an aggregate of (i) $50,000 (not including the filing fees set forth in clause
(iv) above which shall be paid by the Company in any event) if the Closing does
not occur or (ii) $75,000 (not including the filing fees set forth in clause
(iv) above which shall be paid by the Company in any event) if the Closing does
occur. It is understood that except as provided in this Section 4, Section 6 and Section 8(b), the
Underwriter shall pay all of its own expenses.
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Section
5. Conditions of Underwriter's
Obligations.
The
obligations of the Underwriter hereunder are subject to the following
conditions:
(a) Filings with the
Commission. The Prospectus shall have been filed with the
Commission pursuant to Rule 424(b) under the Securities Act at or before 5:30
p.m., Eastern time, on the second full business day after the date of this
Agreement (or such earlier time as may be required under the Securities
Act).
(b) Abbreviated Registration
Statement. If the Company has elected to rely upon Rule
462(b), the registration statement filed under Rule 462(b) shall have become
effective under the Securities Act by 8:00 a.m., Eastern time, on the business
day next succeeding the date of this Agreement.
(c) No Stop
Orders. Prior to the Closing or the Option Closing, as
applicable: (i) no stop order suspending the effectiveness of the Registration
Statement shall have been issued under the Securities Act and no proceedings
initiated under Section 8(d) or 8(e) of the Securities Act for that purpose
shall be pending or threatened by the Commission, and (ii) any request for
additional information on the part of the Commission (to be included in the
Registration Statement, the Disclosure Package, the Prospectus or any Issuer
Free Writing Prospectus or otherwise) shall have been complied with to the
reasonable satisfaction of the Underwriter.
(d) Action Preventing
Issuance. No action shall have been taken and no statute,
rule, regulation or order shall have been enacted, adopted or issued by any
governmental agency or body which would, as of the Closing Date or the Option
Closing Date, as applicable, prevent the issuance or sale of the Securities; and
no injunction, restraining order or order of any other nature by any federal or
state court of competent jurisdiction shall have been issued as of the Closing
Date or the Option Closing Date, as applicable, which would prevent the issuance
or sale of the Securities.
(e) Objection of
Underwriter. No Prospectus or amendment or supplement to the
Registration Statement shall have been filed to which the Underwriter shall have
objected in writing, which objection shall not be unreasonable. The
Underwriter shall not have advised the Company that the Registration Statement,
the Disclosure Package or the Prospectus, or any amendment thereof or supplement
thereto, or any Issuer Free Writing Prospectus contains an untrue statement of
fact which, in its opinion, is material, or omits to state a fact which, in its
opinion, is material and is required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading.
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(f) No Material Adverse
Change. (i) Prior to the Closing or the Option
Closing, as applicable, there shall not have occurred any change, or any
development involving a prospective change, in the condition, financial or
otherwise, or in the earnings, business or operations of the Company from that
set forth in the Disclosure Package and the Prospectus that, in the
Underwriter’s judgment, is material and adverse and that makes it, in the
Underwriter’s judgment, impracticable to market the Securities on the
terms and in the manner contemplated in the Disclosure Package.
(ii) There
shall not have occurred any of the following: (i) a suspension
or material limitation in trading in securities generally on the New York Stock
Exchange, the NYSE Alternext US, LLC (“Alternext”) or Nasdaq or the
establishing on such exchanges by the SEC or by such exchanges of minimum or
maximum prices that are not in force and effect on the date hereof; (ii) a
suspension or material limitation in trading in the Company’s securities on
Nasdaq or the establishing on such market by the SEC or by such market of
minimum or maximum prices that are not in force and effect on the date hereof;
(iii) a general moratorium on commercial banking activities declared by
either federal or any state authorities; (iv) the outbreak or material
escalation of hostilities or acts of terrorism involving the United States or
the declaration by the United States of a national emergency or war, which in
your reasonable judgment makes it impracticable or inadvisable to proceed with
the public offering or the delivery of the Securities in the manner contemplated
in the Prospectus; or (v) any calamity or crisis, change in national,
international or world affairs, act of God, change in the international or
domestic markets, or change in the existing financial, political or economic
conditions in the United States or elsewhere, that in your reasonable judgment
makes it impracticable or inadvisable to proceed with the public offering or the
delivery of the Securities or the Additional Securities, as applicable, in the
manner contemplated in each of the Disclosure Package and the
Prospectus.
(g) Representations and
Warranties. Each of the representations and warranties of the
Company contained herein shall be true and correct when made and on and as of
the Closing Date, or the Option Closing Date, as applicable, as if made on such
date (except that those representations and warranties that address matters only
as of a particular date shall remain true and correct as of such date), and all
covenants and agreements herein contained to be performed on the part of the
Company and all conditions herein contained to be fulfilled or complied with by
the Company at or prior to the Closing Date or the Option Closing Date, as
applicable, shall have been duly performed, fulfilled or complied
with.
(h) Opinion of Counsel to the
Company. The Underwriter shall have received from ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, such counsel’s written opinion, addressed to the Underwriter and the
Investors and dated the Closing Date or the Option Closing Date, as applicable,
in form and substance as is set forth on Exhibit B attached
hereto. Such counsel shall also have furnished to the Underwriter a
written statement, addressed to the Underwriter and dated the Closing Date or
the Option Closing Date, as applicable, in form and substance as set forth in
Exhibit C
attached hereto.
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(i) Accountant’s Comfort
Letter. The Underwriter shall have received on the date of the
Time of Sale, a letter dated the date hereof, (the “Original Letter”), addressed
to the Underwriter and in form and substance reasonably satisfactory to the
Underwriter and its counsel, from PricewaterhouseCoopers, which letter shall
cover, without limitation, the various financial disclosures, if any, contained
in the Disclosure Package and shall contain statements and information of the
type customarily included in accountants’ “comfort letters” to underwriters,
delivered according to Statement of Auditing Standards No. 72 and Statement of
Auditing Standard No. 100 (or successor bulletins), with respect to the audited
and unaudited financial statements and certain financial information contained
in or incorporated by reference into the Registration Statement, the Disclosure
Package and the Prospectus. At the Closing Date and any Option
Closing Date, as applicable, the Underwriter shall have received from
PricewaterhouseCoopers, a letter, dated the Closing Date or the Option Closing
Date, as applicable, which shall confirm, on the basis of a review in accordance
with the procedures set forth in the Original Letter, that nothing has come to
their attention during the period from the date of the Original Letter referred
to in the prior sentence to a date (specified in the letter) not more than three
days prior to the Closing Date or the Option Closing Date, as applicable, which
would require any change in the Original Letter if it were required to be dated
and delivered at the Closing Date, or the Option Closing Date, as
applicable.
(j) Officer’s
Certificate. The Underwriter shall have received on the
Closing Date, or the Option Closing Date, as applicable, a certificate,
addressed to the Underwriter and dated the Closing Date, or the Option Closing
Date, as applicable, of the chief executive or chief operating officer and the
chief financial officer or chief accounting officer of the Company to the effect
that:
(i) each of
the representations, warranties and agreements of the Company in this Agreement
were true and correct when originally made and are true and correct as of the
Time of Sale and the Closing Date or the Option Closing Date, as applicable
(except that those representations and warranties that address matters only as
of a particular date shall remain true and correct as of such date); and the
Company has complied with all agreements and satisfied all the conditions on its
part required under this Agreement to be performed or satisfied at or prior to
the Closing Date, or the Option Closing Date, as applicable;
(ii) subsequent
to the respective dates as of which information is given in the Disclosure
Package, there has not been (A) a material adverse change or any development
involving a prospective material adverse change in the general affairs,
business, properties, management, financial condition or results of operations
of the Company and the Subsidiaries taken as a whole, (B) any transaction that
is material to the Company and the Subsidiaries taken as a whole, except
transactions entered into in the ordinary course of business, (C) any
obligation, direct or contingent, that is material to the Company and the
Subsidiaries taken as a whole, incurred by the Company or the Subsidiaries,
except obligations incurred in the ordinary course of business, (D) except as
disclosed in the Disclosure Package and in the Prospectus, any change in the
capital stock (other than a change in the number of outstanding shares of Common
Stock due to the issuance of shares upon the exercise of outstanding options or
warrants) or any material change in the short term or long term indebtedness of
the Company or any of the Subsidiaries taken as a whole, (E) any dividend or
distribution of any kind declared, paid or made on the capital stock of the
Company any of the Subsidiaries or (F) any loss or damage (whether or not
insured) to the property of the Company or any of its Subsidiaries which has
been sustained or will have been sustained which has had or is reasonably likely
to result in a Material Adverse Effect.
(iii) no stop
order suspending the effectiveness of the Registration Statement or any part
thereof or any amendment thereof or the qualification of the Securities for
offering or sale, nor suspending or preventing the use of the Disclosure
Package, the Prospectus or any Issuer Free Writing Prospectus shall have been
issued, and no proceedings for that purpose shall be pending or to their
knowledge, threatened by the Commission or any state or regulatory body;
and
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(iv) the
signers of said certificate have reviewed the Registration Statement, the
Disclosure Package and the Prospectus, and any amendments thereof or supplements
thereto (and any documents filed under the Exchange Act and deemed to be
incorporated by reference into the Disclosure Package and the Prospectus), and
(A) (i) the Registration Statement and any amendment thereof do not and did not
contain when the Registration Statement (or such amendment) became effective,
any untrue statement of a material fact or omit to state, and did not omit to
state when the Registration Statement (or such amendment) became effective, any
material fact required to be stated therein or necessary to make the statements
therein not misleading and (ii) as of the Time of Sale, neither the Disclosure
Package nor any individual Issuer Limited Use Free Writing Prospectus, when
considered together with the Disclosure Package, contained any untrue statement
of material fact or omits to state any material fact necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading and (iii) the Prospectus, as amended or supplemented, does not
and did not contain, as of its issue date, any untrue statement of material fact
or omit to state and did not omit to state as of such date, a material fact
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading, and (B) since the Time of Sale, there has
occurred no event required to be set forth in an amendment or supplement to the
Registration Statement, the Disclosure Package or the Prospectus which has not
been so set forth and there has been no document required to be filed under the
Exchange Act that upon such filing would be deemed to be incorporated by
reference in to the Disclosure Package and into the Prospectus that has not been
so filed.
(k) Secretary’s
Certificate. On the Closing Date, or the Option Closing Date,
as applicable, the Company shall have furnished to the Underwriter a Secretary’s
Certificate of the Company.
(l) Warrant
Agreement. The Company and the Warrant Agent shall have
executed and delivered counterparts of the Warrant Agreement.
(m) Other
Securities. The Company shall have simultaneously consummated
the issuance and sale of (i) an aggregate of no less than 354,054 shares of
Common Stock to one or more executive officers and/or directors of the Company,
or parties related thereto, at a price per share at least equal to the market
price of the Common Stock (calculated in accordance with Nasdaq Marketplace Rule
4350(i), and (ii) an aggregate of not more than 19.99% of the outstanding shares
of Common Stock to one or more institutional accredited investors on the terms
previously disclosed to the Underwriter (collectively, the “Other
Securities”).
(n) Other Filings with the
Commission. The Company shall have prepared and filed with the
Commission a Current Report on Form 8-K with respect to the transactions
contemplated hereby, including as an exhibit thereto this Agreement and any
other documents relating thereto.
(o) No FINRA
Objection. FINRA shall not have raised any objection with
respect to the fairness and reasonableness of the underwriting terms and
arrangements relating to the issuance and sale of the Securities; provided that if any such
objection is raised, the Company and the Underwriter shall negotiate promptly
and in good faith appropriate modifications to such underwriting terms and
arrangements in order to satisfy such objections.
(p) Nasdaq. The Shares
and the Warrant Shares shall have been approved for listing on Nasdaq, subject
to official notice of issuance.
(q) Additional
Documents. Prior to the Closing Date, or the Option Closing
Date, as applicable, the Company shall have furnished to the Underwriter such
further information, certificates or documents as the Underwriter shall have
reasonably requested for the purpose of enabling it to pass upon the issuance
and sale of the Securities as contemplated herein, or in order to evidence the
accuracy of any of the representations and warranties, or the satisfaction of
any of the conditions or agreements, herein contained.
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All
opinions, letters, evidence and certificates mentioned above or elsewhere in
this Agreement shall be deemed to be in compliance with the provisions hereof
only if they are in form and substance reasonably satisfactory to counsel for
the Underwriter.
If any
condition specified in this Section 5 is not
satisfied when and as required to be satisfied, this Agreement may be terminated
by the Underwriter by notice to the Company at any time prior to the Closing
Date, or the Option Closing Date, as applicable, which termination shall be
without liability on the part of any party to any other party, except that Section 4, Section 6 and Section 8 shall at
all times be effective and shall survive such termination.
Section
6. Indemnification and
Contribution.
(a) Indemnification of the
Underwriter. (a) The Company agrees to indemnify
and hold harmless the Underwriter against any losses, claims, damages or
liabilities to which the Underwriter may become subject, under the Securities
Act or otherwise (including in settlement of any litigation if such settlement
is effected with the written consent of the Company), insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon (i) an untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement, including the information deemed
to be a part of the Registration Statement at the time of effectiveness and at
any subsequent time pursuant to Rules 430A and 430B of the Rules and
Regulations, the Time of Sale Disclosure Package, the Prospectus, or any
amendment or supplement thereto (including any documents filed under the
Exchange Act and deemed to be incorporated by reference into the Prospectus),
any Issuer Free Writing Prospectus or in any materials or information provided
to investors by, or with the approval of, the Company in connection with the
marketing of the offering of the Common Stock (“Marketing Materials”),
including any roadshow or investor presentations made to investors by the
Company (whether in person or electronically) or arise out of or are based upon
the omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, and
will reimburse the Underwriter for any legal or other expenses reasonably
incurred by it in connection with investigating or defending against such loss,
claim, damage, liability or action; or (ii) in whole or in part upon any
inaccuracy in the representations and warranties of the Company contained
herein; or (iii) in whole or in part upon any failure of the Company to perform
its obligations hereunder or under law; provided, however, that the
Company shall not be liable in any such case to the extent that any such loss,
claim, damage, liability or action arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission made in
the Registration Statement, any Preliminary Prospectus, the Time of Sale
Disclosure Package, the Prospectus, or any such amendment or supplement, any
Issuer Free Writing Prospectus or in any Marketing Materials, in reliance upon
and in conformity with written information furnished to the Company by the
Underwriter specifically for use in the preparation thereof.
The
Company agrees that, as an interim measure during the pendency of any claim,
action, investigation, inquiry or other proceeding arising out of or based upon
any statement or omission, or any alleged statement or omission, described in
this Section
6(a), it will reimburse the Underwriter on a monthly basis for all
reasonable legal fees or other expenses incurred in connection with
investigating or defending any such claim, action, investigation, inquiry or
other proceeding, notwithstanding the absence of a judicial determination as to
the propriety and enforceability of the Company’s obligation to reimburse the
Underwriter for such expenses and the possibility that such payments might later
be held to have been improper by a court of competent
jurisdiction. To the extent that any such interim reimbursement
payment is so held to have been improper, the Underwriter shall promptly return
it to the Company, together with interest, compounded daily, determined on the
basis of the prime rate (or other commercial lending rate for borrowers of the
highest credit standing) announced from time to time by ▇▇▇▇▇ Fargo Bank, N.A.
(the “Prime
Rate”). Any such interim reimbursement payments which are not
made to the Underwriter within 30 days of a written request for reimbursement
shall bear interest at the Prime Rate from the date of such
request. This indemnity agreement shall be in addition to any
liabilities which the may otherwise have.
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(b) Indemnification of the
Company. The Underwriter will indemnify and hold harmless the
Company against any losses, claims, damages or liabilities to which the Company
may become subject, under the Securities Act or otherwise (including in
settlement of any litigation, if such settlement is effected with the written
consent of such Underwriter), insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in the
Registration Statement, the Time of Sale Disclosure Package, the Prospectus, or
any amendment or supplement thereto any Issuer Free Writing Prospectus or any
marketing materials, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in the Registration
Statement, the Time of Sale Disclosure Package, the Prospectus, or any amendment
or supplement thereto, or any Issuer Free Writing Prospectus or any Marketing
Materials in reliance upon and in conformity with written information furnished
to the Company by the Underwriter specifically for use in the preparation
thereof, and will reimburse the Company for any legal or other expenses
reasonably incurred by the Company in connection with investigating or defending
against any such loss, claim, damage, liability or action.
(c) Notice and
Procedures. (c) Promptly after receipt by an
indemnified party under subsection (a) or (b) above of notice
of the commencement of any action, such indemnified party shall, if a claim in
respect thereof is to be made against the indemnifying party under such
subsection, notify the indemnifying party in writing of the commencement
thereof; but the omission so to notify the indemnifying party shall not relieve
the indemnifying party from any liability that it may have to any indemnified
party except to the extent such indemnifying party has been materially
prejudiced by such failure. In case any such action shall be brought
against any indemnified party, and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate
in, and, to the extent that it shall wish, jointly with any other indemnifying
party similarly notified, to assume the defense thereof, with counsel
satisfactory to such indemnified party, and after notice from the indemnifying
party to such indemnified party of the indemnifying party’s election so to
assume the defense thereof, the indemnifying party shall not be liable to such
indemnified party under such subsection for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof other than reasonable costs of investigation; provided, however, that if
(i) the indemnified party has reasonably concluded (based on advice of counsel)
that there may be legal defenses available to it or other indemnified parties
that are different from or in addition to those available to the indemnifying
party, (ii) or a conflict or potential conflict exists (based on advice of
counsel to the indemnified party) between the indemnified party and the
indemnifying party (in which case the indemnifying party will not have the right
to direct the defense of such action on behalf of the indemnified party), or
(iii) the indemnifying party has not in fact employed counsel reasonably
satisfactory to the indemnified party to assume the defense of such action with
a reasonable time after receiving notice of the commencement of the action, the
indemnified party shall have the right to employ a single counsel to represent
it in any claim in respect of which indemnity may be sought under subsection (a) or (b) of this Section 6, in which
event the reasonable fees and expenses of such separate counsel shall be borne
by the indemnifying party or parties and reimbursed to the indemnified party as
incurred (in accordance with the provisions of the second paragraph in subsection (a) or (b)
above).
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The
indemnifying party under this Section 6 shall not
be liable for any settlement of any proceeding effected without its written
consent, but if settled with such consent or if there be a final judgment for
the plaintiff, the indemnifying party agrees to indemnify the indemnified party
against any loss, claim, damage, liability or expense by reason of such
settlement or judgment. No indemnifying party shall, without the
prior written consent of the indemnified party, effect any settlement,
compromise or consent to the entry of judgment in any pending or threatened
action, suit or proceeding in respect of which any indemnified party is or could
have been a party and indemnity was or could have been sought hereunder by such
indemnified party, unless such settlement, compromise or consent (a) includes an
unconditional release of such indemnified party from all liability on claims
that are the subject matter of such action, suit or proceeding and (b) does not
include a statement as to or an admission of fault, culpability or a failure to
act by or on behalf of any indemnified party.
(d) Contribution. If
the indemnification provided for in this Section 6 is
unavailable or insufficient to hold harmless an indemnified party under subsection (a) or (b) above, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of the losses, claims, damages or liabilities
referred to in subsection (a) or (b) above, (i) in
such proportion as is appropriate to reflect the relative benefits received by
the Company on the one hand and the Underwriter on the other from the offering
of the Securities or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above but also the relative
fault of the Company on the one hand and the Underwriter on the other in
connection with the statements or omissions that resulted in such losses,
claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative benefits received by the Company on the
one hand and the Underwriter on the other shall be deemed to be in the same
proportion as the total net proceeds from the offering (before deducting
expenses) received by the Company bear to the total underwriting discounts and
commissions received by the Underwriter, in each case as set forth in the table
on the cover page of the Prospectus. The relative fault shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company or the
Underwriter and the parties’ relevant intent, knowledge, access to information
and opportunity to correct or prevent such untrue statement or
omission. The Company and the Underwriter agree that it would not be
just and equitable if contributions pursuant to this subsection (d) were to be
determined by pro rata allocation or by any other method of allocation which
does not take account of the equitable considerations referred to in the first
sentence of this subsection (d). The
amount paid by an indemnified party as a result of the losses, claims, damages
or liabilities referred to in the first sentence of this subsection (d) shall be deemed
to include any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending against any action or claim
which is the subject of this subsection (d). Notwithstanding
the provisions of this subsection (d), the Underwriter
shall not be required to contribute any amount in excess of the amount by which
the total price at which the Securities were offered to the public exceeds the
amount of any damages that the 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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(e) Representations and Agreements to
Survive Delivery. The obligations of the Company under this
Section 6 shall
be in addition to any liability which the Company may otherwise have and the
benefits of such obligations shall extend, upon the same terms and conditions,
to each person, if any, who controls the Underwriter within the meaning of the
Securities Act; and the obligations of the Underwriter under this Section 6 shall be in
addition to any liability that the Underwriter may otherwise have and the
benefits of such obligations shall extend, upon the same terms and conditions,
to each director of the Company (including any person who, with his consent, is
named in the Registration Statement as about to become a director of the
Company), to each officer of the Company who has signed the Registration
Statement and to each person, if any, who controls the Company within the
meaning of the Securities Act. The indemnity and contribution
agreements of the parties contained in this Section 6 and the
covenants, warranties and representations of the Company contained in this
Agreement shall remain operative and in full force and effect regardless of (i)
any termination of this Agreement, (ii) any investigation made by or on behalf
of the Underwriter, any person who controls the Underwriter within the meaning
of either Section 15 of the Securities Act or Section 20 of the Exchange Act or
any affiliate of the Underwriter, or by or on behalf of the Company, its
directors or officers or any person who controls the Company within the meaning
of either Section 15 of the Securities Act or Section 20 of the Exchange Act,
and (iii) the issuance and delivery of the Securities. The Company and the
Underwriter agree promptly to notify each other of the commencement of any
Proceeding against it and, in the case of the Company, against any of the
Company’s officers or directors in connection with the issuance and sale of the
Securities, or in connection with the Registration Statement, the Disclosure
Package or the Prospectus.
Section
7. Information Furnished by
Underwriter.
The
Underwriter confirms and the Company acknowledges that the information
concerning the Underwriter furnished in writing to the Company by the
Underwriter specifically for inclusion in the Registration Statement, the Time
of Sale Disclosure Package, the Prospectus or any Issuer Free Writing Prospectus
consists only of the information under the headings “Public offering price” and
“Underwriting discount” in the table on the first page of the Prospectus
Supplement (the “Underwriter
Information”) constitute the only information relating to the Underwriter
furnished in writing to the Company by the Underwriter as such information is
referred to in Sections 2 and 6
hereof.
-25-
Section
8. Termination.
(a) The
Underwriter shall have the right to terminate this Agreement by giving notice as
hereinafter specified at any time at or prior to the Closing Date, without
liability on the part of the Underwriter to the Company, if (i) prior to
delivery and payment for the Securities (A) trading in securities generally
shall have been suspended or materially limited on or by the New York Stock
Exchange, the Alternext or Nasdaq (each, a “Trading Market”), (B) trading
in the shares of Common Stock of the Company shall have been suspended or
materially limited on any exchange or in the over-the-counter market, (C) a
general moratorium on commercial banking activities shall have been declared by
federal or New York state authorities, (D) there shall have occurred any
outbreak or material escalation of hostilities or acts of terrorism involving
the United States or there shall have been a declaration by the United States of
a national emergency or war, (E) there shall have occurred any other calamity or
crisis or any material change in general economic, political or financial
conditions in the United States or elsewhere, if the effect of any such event
specified in clause (D) or (E), in the reasonable judgment of the Underwriter,
makes it impractical or inadvisable to proceed with the completion of the sale
of and payment for the Securities on the Closing Date on the terms and in the
manner contemplated by this Agreement, the Disclosure Package and the
Prospectus, or (ii) since the time of execution of this Agreement or the earlier
respective dates as of which information is given in the Disclosure Package,
there has been (A) any Material Adverse Effect or (B) the Company shall have
sustained a loss by strike, fire, flood, earthquake, accident or other calamity
of such character that in the judgment of the Underwriter would, individually or
in the aggregate, result in a Material Adverse Effect and which would, in the
reasonable judgment of the Underwriter, make it impracticable or inadvisable to
proceed with the offering or the delivery of the Securities on the terms and in
the manner contemplated in the Disclosure Package. Any such
termination shall be without liability of any party to any other party except
that the provisions of Section 4, Section 6, Section 8(b) and
Section 11
hereof shall at all times be effective notwithstanding such
termination.
(b) If
(1) this Agreement shall be terminated by the Underwriter pursuant to Section 5, Section 8(a)(i)(B) or
Section
8(a)(ii)(A) or (2) the sale of the Securities to the Underwriter is not
consummated because of any failure, refusal or inability on the part of the
Company to comply with the terms or perform any agreement or obligation of this
Agreement, other than by reason of a default by the Underwriter, the Company
will, in addition to paying the amounts described in Section 4 hereof,
reimburse the Underwriter for all of its reasonable and actual out-of-pocket
disbursements (including, but not limited to, the reasonable fees and
disbursements of its counsel); provided, however, that if
this Agreement is terminated by the Underwriter solely due to a failure of one
or more of the conditions specified in Section 5(f)(iii),
Section
5(f)(iv) or Section 5(f)(5) which
results solely from an “act of God”, the Company’s obligation to reimburse the
Underwriter for its reasonable and actual out-of-pocket disbursements shall be
capped at $75,000.
Section
9. Notices.
All
statements, requests, notices and agreements hereunder shall be in writing or by
facsimile, and:
-26-
(a) if
to the Underwriter, shall be delivered or sent by mail, telex or facsimile
transmission to:
▇▇▇▇
Capital Partners, LLC
▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention:
Managing Director
Facsimile
No.: ▇▇▇-▇▇▇-▇▇▇▇
with a
copy (which shall not constitute notice) to:
▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ PC
▇▇▇▇
▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention:
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
Facsimile
No.: ▇▇▇-▇▇▇-▇▇▇▇
(b) if
to the Company shall be delivered or sent by mail, telex or facsimile
transmission to:
ParkerVision,
Inc.
▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇ - Chief Executive Officer
Facsimile
No.: ▇▇▇-▇▇▇-▇▇▇▇
with a
copy (which shall not constitute notice) to:
▇▇▇▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇
▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention:
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, Esq.
Facsimile No.: ▇▇▇- ▇▇▇-▇▇▇▇
Any such
notice shall be effective only upon receipt. Any party to this
Agreement may change such address for notices by sending to the parties to this
Agreement written notice of a new address for such purpose.
Section
10. Persons Entitled to Benefit of
Agreement.
This
Agreement shall inure to the benefit of and shall be binding upon the
Underwriter, the Company and their respective successors and assigns and the
controlling persons, officers and directors referred to in Section
6. Nothing in this Agreement is intended or shall be construed
to give to any other person, firm or corporation, other than the persons, firms
or corporations mentioned in the preceding sentence, any legal or equitable
remedy or claim under or in respect of this Agreement, or any provision herein
contained. The term “successors and assigns” as herein used shall not
include any purchaser of the Securities by reason merely of such
purchase.
Section
11. Governing Law.
This
Agreement shall be governed by and construed in accordance with the laws of the
State of New York, without giving effect to the conflicts of laws provisions
thereof.
-27-
Section
12. No Fiduciary
Relationship.
The
Company hereby acknowledges that the Underwriter is acting solely as underwriter
in connection with the offering of the Company’s securities. The Company further
acknowledges that the Underwriter is acting pursuant to a contractual
relationship created solely by this Agreement entered into on an arm’s length
basis and in no event do the parties intend that the Underwriter act or be
responsible as a fiduciary to the Company, its management, stockholders,
creditors or any other person in connection with any activity that the
Underwriter may undertake or have undertaken in furtherance of the offering of
the Company’s securities, either before or after the date hereof. The
Underwriter hereby expressly disclaims any fiduciary or similar obligations to
the Company, either in connection with the transactions contemplated by this
Agreement or any matters leading up to such transactions, and the Company hereby
confirms its understanding and agreement to that effect. The Company and the
Underwriter agree that they are each responsible for making their own
independent judgments with respect to any such transactions, and that any
opinions or views expressed by the Underwriter to the Company regarding such
transactions, including but not limited to any opinions or views with respect to
the price or market for the Company’s securities, do not constitute advice or
recommendations to the Company. The Company hereby waives and releases, to the
fullest extent permitted by law, any claims that the Company may have against
the Underwriter with respect to any breach or alleged breach of any fiduciary or
similar duty to the Company in connection with the transactions contemplated by
this Agreement or any matters leading up to such transactions.
Section
13. Headings.
The
Section headings in this Agreement have been inserted as a matter of convenience
of reference and are not a part of this Agreement.
Section
14. Amendments and
Waivers.
No
supplement, modification or waiver of this Agreement shall be binding unless
executed in writing by the party to be bound thereby. The failure of a party to
exercise any right or remedy shall not be deemed or constitute a waiver of such
right or remedy in the future. No waiver of any of the provisions of this
Agreement shall be deemed or shall constitute a waiver of any other provision
hereof (regardless of whether similar), nor shall any such waiver constitute a
continuing waiver unless otherwise expressly provided.
Section
15. Submission to
Jurisdiction.
Except as
set forth below, no Proceeding may be commenced, prosecuted or continued in any
court other than the courts of the State of New York located in the City and
County of New York or in the United States District Court for the Southern
District of New York, which courts shall have jurisdiction over the adjudication
of such matters, and the Company hereby consents to the jurisdiction of such
courts and personal service with respect thereto. The Company hereby consents to
personal jurisdiction, service and venue in any court in which any Proceeding
arising out of or in any way relating to this Agreement is brought by any third
party against the Underwriter. The Company hereby waives all right to trial by
jury in any Proceeding (whether based upon contract, tort or otherwise) in any
way arising out of or relating to this Agreement. The Company agrees that a
final judgment in any such Proceeding brought in any such court shall be
conclusive and binding upon the Company and may be enforced in any other courts
in the jurisdiction of which the Company is or may be subject, by suit upon such
judgment.
-28-
Section
16. Counterparts.
This
Agreement may be executed in one or more counterparts and, if executed in more
than one counterpart, the executed counterparts shall each be deemed to be an
original and all such counterparts shall together constitute one and the same
instrument. Delivery of an executed counterpart by facsimile shall be
effective as delivery of a manually executed counterpart thereof.
(Signature
page immediately follows)
-29-
If the
foregoing is in accordance with your understanding of the agreement between the
Company and the Underwriter, kindly indicate your acceptance in the space
provided for that purpose below.
Very
truly yours,
PARKERVISION,
INC.
By: /s/ ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇
Name:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Chairman
and Chief Executive Officer
Accepted
as of
the date
first above written:
▇▇▇▇
CAPITAL PARTNERS, LLC
By: /s/ ▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇
Name:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
|
Title: Head
of Equity Capital Markets
|
Schedules
and Exhibits
Schedule
I: Issuer
General Free Writing Prospectuses
Schedule
II: Subsidiaries
Schedule
III Pricing
Information
Exhibit
A: Form
of Warrant Agreement
Exhibit
B: Form
of Written Statement of Counsel to the Company
Exhibit
C: Pricing
Information
2
Schedule
I
Issuer
General Free Writing Prospectuses
None.
3
Schedule
II
Subsidiaries
None.
4
Schedule
III
Pricing
Information
Number of
Units to be Sold: 2,156,600
Public
Offering Price: $ 1.875 per Unit
Underwriting
Discount: $0.15 per Unit
Proceeds
to Company (before expenses): $3,720,135
Exercise
Price of Warrants: $1.875 per share
5
Exhibit
A
Form
of Warrant Agreement
To
come
6
Exhibit
B
Matters
to be Covered in the
Opinion
of Counsel to the Company
To
come
7
Exhibit
C
Form
of Written Statement of
Counsel
to the Company
To
come
8