1,714,000 Shares1 Celcuity Inc. Common Stock, par value $0.001 per share PURCHASE AGREEMENT
Exhibit 1.1
1,714,000
Shares1
Common Stock, par value $0.001
per share
February
23, 2021
▇▇▇▇▇-▇▇▇▇▇▇
CAPITAL GROUP LLC
As
Representative of the several
Underwriters named
in Schedule I hereto
c/o
▇▇▇▇▇-▇▇▇▇▇▇ Capital Group LLC
▇▇▇
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Ladies
and Gentlemen:
Celcuity Inc., a
Delaware corporation (the “Company”),
proposes to sell to the several underwriters named in Schedule I
hereto (the “Underwriters”)
an aggregate of 1,714,000
shares (the “Firm
Shares”) of common stock, par value $0.001 per share
(the “Common
Stock”), of the Company. The Firm Shares consist of
authorized but unissued shares of Common Stock to be issued and
sold by the Company. The Company also has granted to the
Underwriters an option to purchase up to 257,100 additional shares of Common
Stock on the terms and for the purposes set forth in Section 3
hereof (the “Option
Shares”). The Firm Shares and any Option Shares
purchased pursuant to this Purchase Agreement (this “Agreement”)
are herein collectively called the “Securities.”
The
Company and the several Underwriters hereby confirm their agreement
with respect to the sale of the Securities by the Company to the
several Underwriters, for whom ▇▇▇▇▇-▇▇▇▇▇▇ Capital Group LLC is
acting as representative (“you”
or the “Representative”)
(to the extent there are no additional Underwriters named in
Schedule I hereto other than you, the term Representative as used
herein shall mean you, as Underwriter, and the terms
“Representative”
and “Underwriter”
shall mean either the singular or the plural as the context
requires), as follows:
1. Registration Statement and
Prospectus. The Company has prepared and filed with the
Securities and Exchange Commission (the “Commission”)
a registration statement on Form S-3 (File No. 333-227466) under
the Securities Act of 1933, as amended (the “Securities
Act”), and the rules and regulations (the “Rules and
Regulations”) of the Commission thereunder, 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. All of such registration
statement, including the amendments, exhibits and any schedules
thereto, the documents incorporated by reference therein pursuant
to Item 12 of Form S-3 under the Securities Act and the documents
and information otherwise deemed to be a part thereof or included
therein by Rule 430B under the Securities Act (the “Rule 430B
Information”) or otherwise pursuant to the Rules and
Regulations, as of the time the registration statement became
effective, is herein called the “Registration
Statement.” Any registration statement filed by the
Company pursuant to Rule 462(b) under the Securities Act is herein
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.
1 Plus an option to purchase up to 257,100
additional shares to cover over-allotments.
The
prospectus in the form in which it has most recently been filed
with the Commission on or prior to the date of this Agreement is
herein called the “Base
Prospectus.” Each preliminary prospectus supplement to
the Base Prospectus (including the Base Prospectus as so
supplemented), that describes the Securities and the offering
thereof, that omitted the Rule 430B Information and that was used
prior to the filing of the final prospectus supplement referred to
in the following sentence is herein called a “Preliminary
Prospectus.” Promptly after execution and delivery of
this Agreement, the Company will prepare and file with the
Commission a final prospectus supplement to the Base Prospectus
relating to the Securities and the offering thereof in accordance
with the provisions of Rule 430B and Rule 424(b) of the Rules and
Regulations. Such final prospectus supplement (including the Base
Prospectus as so supplemented), in the form filed with the
Commission pursuant to Rule 424(b), is herein called the
“Prospectus.”
Any reference herein to the Base Prospectus, any Preliminary
Prospectus or the Prospectus shall be deemed to include the
documents incorporated by reference therein pursuant to Item 12 of
Form S-3 under the Securities Act as of the date of such
prospectus.
For
purposes of this Agreement, all references to the Registration
Statement, the Rule 462(b) 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 or any
successor system thereto (“▇▇▇▇▇”).
All references in this Agreement to financial statements and
schedules and other information which are “described,”
“contained,” “included” or
“stated” in the Registration Statement, the Base
Prospectus, any Preliminary Prospectus or the Prospectus (or other
references of like import) shall be deemed to mean and include all
such financial statements and schedules and other information which
are incorporated by reference in or otherwise deemed by the Rules
and Regulations to be a part of or included in the Registration
Statement, the Base Prospectus, any Preliminary Prospectus or the
Prospectus, as the case may be; and 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 Securities Exchange Act of 1934,
as amended (the “Exchange
Act”), and which is deemed to be incorporated by
reference therein or otherwise deemed by the Rules and Regulations
to be a part thereof.
2. Representations and
Warranties of the Company.
(a) Representations
and Warranties of the Company. The Company represents and
warrants to, and agrees with, the several Underwriters as
follows:
(i) Registration
Statement and Prospectuses. No order preventing or
suspending the use of any Preliminary Prospectus or the Prospectus
(or any supplement thereto) has been issued by the Commission and
no proceeding for that purpose has been initiated or is pending or,
to the knowledge of the Company, threatened by the Commission.
As of the time each
part of the Registration Statement (or any post-effective amendment
thereto) became or becomes effective (including each deemed
effective date with respect to the Underwriters pursuant to Rule
430B or otherwise under the Securities Act), such part conformed or
will conform in all material respects to the requirements of the
Securities Act and the Rules and Regulations. Upon the filing or
first use within the meaning of the Rules and Regulations, each
Preliminary Prospectus and the Prospectus (or any supplement to
either) conformed or will conform in all material respects to the
requirements of the Securities Act and the Rules and Regulations.
The Registration Statement and any post-effective amendment thereto
have become effective under the Securities Act. The Company has
complied to the Commission’s satisfaction with all requests
of the Commission for additional or supplemental information. No
stop order suspending the effectiveness of the Registration
Statement, any post-effective amendment thereto or any part thereof
is in effect and no proceedings for such purpose have been
instituted or are pending or, to the knowledge of the Company, are
threatened by the Commission. All references in this Agreement to
the Company’s “knowledge”
shall mean the actual knowledge of the Company’s Chief
Executive Officer, Chief Financial Officer or Chief Science Officer
of the Company after reasonable investigation.
(ii) Accurate
Disclosure. Each Preliminary Prospectus, at the time of
filing thereof or the time of first use within the meaning of the
Rules and Regulations, did not contain an untrue statement of a
material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in the
light of the circumstances under which they were made, not
misleading. Neither the Registration Statement nor any amendment
thereto, at the effective time of each part thereof, at the First
Closing Date (as defined below) or at the Second Closing Date (as
defined below), contained, contains or will contain an untrue
statement of a material fact or omitted, omits or will omit to
state a material fact required to be stated therein or necessary to
make the statements therein not misleading. As of the Time of Sale
(as defined below), neither (A) the Time of Sale Disclosure Package
(as defined below) nor (B) any issuer free writing prospectus (as
defined below), when considered together with the Time of Sale
Disclosure Package, included an untrue statement of a material fact
or omitted to state a material fact necessary in order to make the
statements therein, in light of the circumstances under which they
were made, not misleading. Neither the Prospectus nor any
supplement thereto, as of its issue date, at the time of any filing
with the Commission pursuant to Rule 424(b) of the Rules and
Regulations, at the First Closing Date or at the Second Closing
Date, included, includes or will include an untrue statement of a
material fact or omitted, omits or will omit to state a material
fact necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading. The
representations and warranties in this Section 2(a)(ii) shall
not apply to statements in or omissions from any Preliminary
Prospectus, the Registration Statement (or any amendment thereto),
the Time of Sale Disclosure Package or the Prospectus (or any
supplement thereto) made in reliance upon, and in conformity with,
written information furnished to the Company by you, or by any
Underwriter through you, specifically for use in the preparation of
such document, it being understood and agreed that the only such
information furnished by any Underwriter consists of the
information described as such in Section 6(e).
-2-
Each
reference to an “issuer free writing
prospectus” herein means an issuer free writing
prospectus as defined in Rule 433 of the Rules and
Regulations.
“Time of Sale
Disclosure Package” means the Preliminary Prospectus
dated February 22, 2021, any free writing prospectus set forth
on Schedule II and the information on Schedule III, all considered
together.
Each
reference to a “free writing
prospectus” herein means a free writing prospectus as
defined in Rule 405 of the Rules and Regulations.
“Time of
Sale” means 4:30 pm (Eastern time) on the date of
this Agreement.
(iii) Issuer
Free Writing Prospectuses.
(A) No
issuer free writing prospectus includes any information that
conflicts with the information contained in the Registration
Statement, any Preliminary Prospectus or the Prospectus. The
foregoing sentence does not apply to statements in or omissions
from any issuer free writing prospectus based upon and in
conformity with written information furnished to the Company by you
or by any Underwriter through you specifically for use therein, it
being understood and agreed that the only such information
furnished by any Underwriter consists of the information described
as such in Section 6(e).
(B)
(1) At the earliest time after the filing of the Registration
Statement that the Company or another offering participant made a
bona fide offer (within the
meaning of Rule 164(h)(2) under the Securities Act) of the
Securities 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, including the Company in the preceding
three years not having been convicted of a felony or misdemeanor or
having been made the subject of a judicial or administrative decree
or order as described in Rule 405 of the Rules and Regulations
(without taking account of any determination by the Commission
pursuant to Rule 405 of the Rules and Regulations that it is not
necessary that the Company be considered an ineligible issuer), nor
an “excluded issuer” as defined in Rule 164 under the
Securities Act.
(C)
Each issuer free writing prospectus satisfied, as of its issue date
and at all subsequent times to the Time of Sale, all other
conditions to use thereof as set forth in Rules 164 and 433 under
the Securities Act.
(iv) No
Other Offering Materials. The Company has not distributed
and will not distribute any prospectus or other offering material
in connection with the offering and sale of the Securities other
than any Preliminary Prospectus, the Time of Sale Disclosure
Package or the Prospectus or other materials permitted by the
Securities Act to be distributed by the Company; provided, however, that, except as set
forth on Schedule II, the Company has not made and will not make
any offer relating to the Securities that would constitute a free
writing prospectus, except in accordance with the provisions of
Section 4(o).
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(v)
Financial
Statements. The financial statements of the Company,
together with the related notes, set forth or incorporated by
reference in the Registration Statement, the Time of Sale
Disclosure Package and the Prospectus comply in all material
respects with the requirements of the Securities Act and the
Exchange Act and fairly present the financial condition of the
Company as of the dates indicated and the results of operations,
cash flows and changes in stockholders’ equity for the
periods therein specified in conformity with generally accepted
accounting principles in the United States (“GAAP”)
consistently applied throughout the periods involved (except as
described therein and subject, in the case of the unaudited
financial statements, to year-end adjustments). The supporting
schedules included in the Registration Statement present fairly the
information required to be stated therein; all non-GAAP financial
information included in the Registration Statement, the Time of
Sale Disclosure Package and the Prospectus complies in all material
respects with the requirements of Regulation G and Item 10 of
Regulation S-K under the Securities Act; and, except as disclosed
in the Time of Sale Disclosure Package and the Prospectus, there
are no material off-balance sheet arrangements (as defined in
Regulation S-K under the Securities Act, Item 303(a)(4)(ii)) or any
other relationships with unconsolidated entities or other persons,
that may have a material current or, to the Company’s
knowledge, material future effect on the Company’s financial
condition, results of operations, liquidity, capital expenditures,
capital resources or significant components of revenue or expenses.
No other financial statements or schedules are required to be
included in the Registration Statement, the Time of Sale Disclosure
Package or the Prospectus. To the Company’s knowledge, ▇▇▇▇▇▇
PLLP, which has expressed its opinion with respect to the audited
financial statements and schedules filed as a part of the
Registration Statement and included in the Registration Statement,
the Time of Sale Disclosure Package and the Prospectus, is (x)
an independent public accounting firm
within the meaning of the Securities Act and the Rules and Regulations, (y) a
registered public accounting firm (as defined in Section 2(a)(12)
of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002 (the “▇▇▇▇▇▇▇▇-▇▇▇▇▇
Act”)) and (z) not in
violation of the auditor independence requirements of the
▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act.
(vi) Organization
and Good Standing. The Company has been duly
organized and is validly existing as a corporation in good standing
under the laws of its jurisdiction of incorporation. The Company
has full corporate power and authority to own its properties and
conduct its business as currently being carried on and as described
in the Registration Statement, the Time of Sale Disclosure Package
and the Prospectus, and is duly qualified to do business as a
foreign corporation in good standing in each jurisdiction in which
it owns or leases real property or in which the conduct of its
business makes such qualification necessary and in which the
failure to so qualify would have a material adverse effect upon the
general affairs, business, prospects, management, properties,
operations, condition (financial or otherwise) or results of
operations of the Company, taken as a whole (“Material Adverse
Effect”).
(vii) Absence
of Certain
Events. Except as contemplated in the Time of Sale
Disclosure Package and in the Prospectus, subsequent to the
respective dates as of which information is given in the Time of
Sale Disclosure Package and the Prospectus, the Company has not
incurred any material liabilities or obligations, direct or
contingent, or entered into any material transactions, or declared
or paid any dividends or made any distribution of any kind with
respect to its capital stock; and there has not been any change in
the capital stock (other than a change in the number of outstanding
shares of Common Stock due to the issuance of shares upon the
exercise of outstanding options or warrants), or any material
change in the short-term or long-term debt of the Company, or any
issuance of options, warrants, convertible securities or other
rights to purchase the capital stock of the Company, or any event,
occurrence or development that has had a Material Adverse Effect or
would reasonably be expected to result in any Material Adverse
Effect.
-4-
(viii) Absence
of Proceedings.
Except as set forth in the Time of Sale Disclosure Package and in
the Prospectus, there is not pending or, to the knowledge of the
Company, threatened or contemplated, any action, suit or proceeding
(a) to which the Company is a party or (b) which has as the subject
thereof any officer or director of the Company, any employee
benefit plan sponsored by the Company or any property or assets
owned or leased by the Company before or by any court or
Governmental Authority (as defined below), or any arbitrator,
which, individually or in the aggregate, would result in any
Material Adverse Effect, or would materially and adversely affect
the ability of the Company to perform its obligations under this
Agreement or which are otherwise material in the context of the
sale of the Securities. There are no current or, to the knowledge
of the Company, pending, legal, governmental or regulatory actions,
suits or proceedings (x) to which the Company is subject or (y)
which has as the subject thereof any officer or director of the
Company, any employee plan sponsored by the Company or any property
or assets owned or leased by the Company, that are required to be
described in the Registration Statement, Time of Sale Disclosure
Package and Prospectus by the Securities Act or by the Rules and
Regulations and that have not been so described.
(ix) Disclosure
of Legal Matters. There are no statutes, regulations,
contracts or documents that are required to be described in the
Registration Statement, in the Time of Sale Disclosure Package and
in the Prospectus or required to be filed as exhibits to the
Registration Statement by the Securities Act or by the Rules and
Regulations that have not been so described or filed.
(x) Authorization; No
Conflicts; Authority. This Agreement has been duly
authorized, executed and delivered by the Company, and constitutes
a valid, legal and binding obligation of the Company, enforceable
in accordance with its terms, except as rights to indemnity
hereunder may be limited by federal or state securities laws and
except as such enforceability may be limited by bankruptcy,
insolvency, reorganization or similar laws affecting the rights of
creditors generally and subject to general principles of equity.
The execution, delivery and performance of this Agreement and the
consummation of the transactions herein contemplated will not (A)
conflict with or result in a breach or violation of any of the
terms or provisions of, or constitute a default under, or result in
the creation or imposition of any lien, charge or encumbrance upon
any property or assets of the Company pursuant to any indenture,
mortgage, deed of trust, loan agreement or other material agreement
or instrument to which the Company is a party or by which the
Company is bound or to which any of the property or assets of the
Company is subject, (B) result in any violation of the provisions
of the Company’s charter or bylaws or (C) result in the
violation of any law or statute or any judgment, order, rule,
regulation or decree of any court or arbitrator or federal, state,
local or foreign governmental agency or regulatory authority having
jurisdiction over the Company or any of its properties or assets
(each, a “Governmental
Authority”), except in the case of clauses (A) and (C)
above as would not result in a Material Adverse Effect. No consent,
approval, authorization or order of, or registration or filing with
any Governmental Authority is required for the execution, delivery
and performance of this Agreement or for the consummation of the
transactions contemplated hereby, including the issuance or sale of
the Securities by the Company, except such as may be required under
the Securities Act, the rules of the Financial Industry Regulatory
Authority (“FINRA”),
the Nasdaq Stock Market Rules or state securities or blue sky laws;
and the Company has full power and authority to enter into this
Agreement and to consummate the transactions contemplated hereby,
including the authorization, issuance and sale of the Securities as
contemplated by this Agreement.
-5-
(xi) Capitalization;
the Securities; Registration Rights. All of the issued and
outstanding shares of capital stock of the Company, including the
outstanding shares of Common Stock, are duly authorized and validly
issued, fully paid and nonassessable, have been issued in
compliance with all federal and state securities laws, were not
issued in violation of or subject to any preemptive rights or other
rights to subscribe for or purchase securities that have not been
waived in writing (a copy of which has been delivered to counsel to
the Underwriters), and the holders thereof are not subject to
personal liability by reason of being such holders; the Securities
which may be sold hereunder by the Company have been duly
authorized and, when issued, delivered and paid for in accordance
with the terms of this Agreement, will have been validly issued and
will be fully paid and nonassessable, and the holders thereof will
not be subject to personal liability by reason of being such
holders; and the capital stock of the Company, including the Common
Stock and the Securities to be purchased pursuant to this
Agreement, conforms to the description thereof in the Registration
Statement, in the Time of Sale Disclosure Package and in the
Prospectus. Except as otherwise stated in the Registration
Statement, in the Time of Sale Disclosure Package and in the
Prospectus, (A) there are no preemptive rights or other rights to
subscribe for or to purchase, or any restriction upon the voting or
transfer of, any shares of Common Stock pursuant to the
Company’s charter, bylaws or any agreement or other
instrument to which the Company is a party or by which the Company
is bound; (B) 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 for or relating to the
registration of any shares of Common Stock or other securities of
the Company (collectively “Registration
Rights”) and (C) any person to whom the Company
has granted Registration Rights has agreed not to exercise such
rights until after expiration of the Lock-Up Period (as defined
below). The Company has an authorized and outstanding
capitalization as set forth in the Registration Statement, in the
Time of Sale Disclosure Package and in the Prospectus.
(xii) Stock
Options. Except as described in the Registration Statement,
in the Time of Sale Disclosure Package and in the Prospectus, there
are no options, warrants, agreements, contracts or other rights in
existence to purchase or acquire from the Company any shares of the
capital stock of the Company. The description of the
Company’s stock option, stock bonus and other stock plans or
arrangements (the “Company Stock
Plans”), and the options or other rights granted
thereunder (collectively, the “Awards”),
set forth in the Time of Sale Disclosure Package and the Prospectus
accurately and fairly presents in all material respects the
information required to be shown with respect to such plans,
arrangements and Awards. Each grant of an Award (A) was duly
authorized no later than the date on which the grant of such Award
was by its terms to be effective by all necessary corporate action,
including, as applicable, approval by the board of directors of the
Company (or a duly constituted and authorized committee thereof)
and any required stockholder approval by the necessary number of
votes or written consents, and the award agreement governing such
grant (if any) was duly executed and delivered by each party
thereto and (B) was made in accordance with the terms of the
applicable Company Stock Plan, and all applicable laws and
regulatory rules or requirements, including all applicable federal
securities laws.
-6-
(xiii) Compliance
with Laws. The Company holds, and is operating in compliance
in all material respects with, all franchises, grants,
authorizations, licenses, permits, easements, consents,
certificates and orders of any Governmental Authority or
self-regulatory body required for the conduct of its business and
all such franchises, grants, authorizations, licenses, permits,
easements, consents, certifications and orders are valid and in
full force and effect; and the Company has not received written
notice of any revocation or modification of any material franchise,
grant, authorization, license, permit, easement, consent,
certification or order or has reason to believe that any such
material franchise, grant, authorization, license, permit,
easement, consent, certification or order will not be renewed in
the ordinary course; and the Company is in compliance in all
material respects with all applicable federal, state, local and
foreign laws, regulations, orders and decrees.
(xiv) Ownership
of Assets. The Company has good and marketable title to, or
has valid rights to lease or otherwise use, all property (whether
real or personal) described in the Registration Statement, in the
Time of Sale Disclosure Package and in the Prospectus as being
owned, leased or used by them, in each case free and clear of all
liens, claims, security interests, other encumbrances or defects
except such as are described in the Registration Statement, in the
Time of Sale Disclosure Package and in the Prospectus. The property
held under lease by the Company is held by it under valid,
subsisting and enforceable leases with only such exceptions with
respect to any particular lease as do not interfere in any material
respect with the conduct of the business of the
Company.
(xv) Intellectual
Property.
(A) The
Company owns or has the right to use pursuant to a valid and
enforceable written license or other legally enforceable right all
Intellectual Property (as defined below) necessary for the conduct
of the Company’s business as now conducted or as described in
the Registration Statement, the Time of Sale Disclosure Package and
the Prospectus to be conducted (the “Company
IP”), except as such failure to own, right to use or
acquire such rights would not result in a Material Adverse Effect.
“Intellectual
Property” means all patents, patent applications,
trade and service marks, trade and service ▇▇▇▇ registrations,
trade names, copyrights, licenses, inventions, trade secrets,
domain names, technology, know-how and other intellectual
property.
-7-
(B) To
the knowledge of the Company, there is no infringement,
misappropriation or violation by third parties of any Company IP,
except for such infringement, misappropriation or violation that
would not result in a Material Adverse Effect. There is no pending
or, to the knowledge of the Company, threatened, action, suit,
proceeding or claim by others challenging the Company’s
rights in or to any Company IP, and the Company is unaware of any
facts which would form a reasonable basis for any such claim. The
Intellectual Property owned by the Company, and to the knowledge of
the Company, the Intellectual Property licensed to the Company, has
not been adjudged invalid or unenforceable, in whole or in part,
and there is no pending or, to the knowledge of the Company,
threatened action, suit, proceeding or claim by others challenging
the validity or scope of any Company IP, and the Company is unaware
of any facts which would form a reasonable basis for any such
claim. There is no pending or, to the knowledge of the Company,
threatened action, suit, proceeding or claim by others that the
Company infringes, misappropriates or otherwise violates any
Intellectual Property or other proprietary rights of others, and
the Company has not received any written notice of such claim and
the Company is unaware of any other fact which would form a
reasonable basis for any such claim.
(C) To
the Company’s knowledge, no employee of the Company is in or
has ever been in material violation of any term of any employment
contract, patent disclosure agreement, invention assignment
agreement, non-competition agreement, non-solicitation agreement,
nondisclosure agreement or any restrictive covenant to or with a
former employer where the basis of such violation relates to such
employee’s employment with the Company or actions undertaken
by the employee while employed with the Company.
(D) The
Company has taken reasonable security measures to protect the
secrecy, confidentiality and value of all of their material
Intellectual Property.
(E) All
patent applications owned by the Company and filed with the U.S.
Patent and Trademark Office (the “PTO”)
or any foreign or international patent authority that have resulted
in patents or currently pending applications that describe
inventions necessary to conduct the business of the Company as now
conducted or as described in the Registration Statement, the Time
of Sale Disclosure Package and the Prospectus to be conducted
(collectively, the “Company Patent
Applications”) have been or were duly and properly
filed.
(F) The
Company has complied with its duty of candor and disclosure to the
PTO for the Company Patent Applications. To the Company’s
knowledge, there are no facts required to be disclosed to the PTO
that were not disclosed to the PTO and which would preclude the
grant of a patent for the Company Patent Applications. The Company
has no knowledge of any facts which would preclude it from having
clear title to the Company Patent Applications that have been
identified by the Company as being exclusively owned by the
Company.
-8-
(xvi) Privacy
and Data Protection. The Company has operated its business
in a manner compliant in all material respects with all United
States federal, state, local and non-United
States privacy,
data security and data protection laws and regulations applicable
to the Company’s collection, use, transfer, protection,
disposal, disclosure, handling, storage and analysis of personal
data. The Company has been and is in compliance in all material
respects with internal policies and procedures designed to ensure
the integrity and security of the data collected, handled or stored
in connection with its business. The Company has taken reasonable
steps to maintain the confidentiality of its personally
identifiable information, protected health information, consumer
information and other confidential information of the Company and
any third parties in its possession (“Sensitive
Company Data”). The tangible or digital information
technology systems (including computers, screens, servers,
workstations, routers, hubs, switches, networks, data
communications lines, technical data and hardware), software and
telecommunications systems used or held for use by the Company
(the “Company
IT Assets”)
are adequate and operational for, in accordance with their
documentation and functional specifications, the business of the
Company as now operated and as currently proposed to be conducted
as described in the Registration Statement, in the Time of
Sale Disclosure Package and in the Prospectus. The Company has used reasonable
efforts to establish, and has established, commercially reasonable
disaster recovery and security plans, procedures and facilities for
the business consistent with industry standards and practices in
all material respects, including, without limitation, for the
Company IT Assets and data held or used by or for the Company. To
the Company’s knowledge, the Company has not suffered or
incurred any security breaches, compromises or incidents with
respect to any Company IT Assets or Sensitive Company Data, except
where such breaches, compromises or incidents would not reasonably
be expected to, singly or in the aggregate, result in a Material
Adverse Effect; and there has been no unauthorized or illegal
use of or access to any Company IT Assets or Sensitive Company Data
by any unauthorized third party. The Company has not been required
to notify any individual of any information security breach,
compromise or incident involving Sensitive Company
Data.
(xvii) No
Violations or Defaults. The Company is not in violation of
its charter, bylaws or other organizational documents, or in breach
of or otherwise in default, and no event has occurred which, with
notice or lapse of time or both, would constitute such a default in
the performance of any obligation, agreement or condition contained
in any bond, debenture, note, indenture, loan agreement or any
other contract, lease or other instrument to which it is subject or
by which any of them may be bound, or to which any of the property
or assets of the Company is subject, except as would not result in
a Material Adverse Effect.
(xviii) Taxes.
The Company has timely filed all federal, state, local and foreign
income and franchise tax returns required to be filed (except where
the failure to make such timely filing would not be material) and
is 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 is contesting in good faith. There
is no pending dispute with any taxing authority relating to any of
such returns, and the Company has no knowledge of any proposed
liability for any tax to be imposed upon the properties or assets
of the Company for which there is not an adequate reserve reflected
in the Company’s financial statements included in the
Registration Statement, the Time of Sale Disclosure Package and the
Prospectus.
-9-
(xix) Exchange
Listing and Exchange Act Registration. The Common Stock is
registered pursuant to Section 12(b) of the Exchange Act and
is included or approved for listing on the Nasdaq Capital Market
and the Company has not taken any action designed to, or likely to
have the effect of, terminating the registration of the Common
Stock under the Exchange Act or delisting the Common Stock from the
Nasdaq Capital Market, and the Company has not received any
notification that the Commission or the Nasdaq Capital Market is
contemplating terminating such registration or listing. The Company
has complied in all material respects with the applicable
requirements of the Nasdaq Capital Market for maintenance of
inclusion of the Common Stock thereon. Except as previously
disclosed to counsel for the Underwriters or as set forth in the
Time of Sale Disclosure Package and the Prospectus, to the
knowledge of the Company, no beneficial owners of the
Company’s capital stock who, together with their associated
persons and affiliates, hold in the aggregate 10% or more of such
capital stock, have any direct or indirect association or affiliate
with a FINRA member.
(xx) Ownership
of Other Entities. The Company, directly or indirectly, owns
no capital stock or other equity or ownership or proprietary
interest in any corporation, partnership, association, trust or
other entity.
(xxi) Internal
Controls. The Company maintains a system of internal
accounting controls sufficient to provide reasonable assurances
that (i) transactions are executed in accordance with
management’s general or specific authorization;
(ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with GAAP and to
maintain accountability for assets; (iii) access to assets is
permitted only in accordance with management’s general or
specific authorization; and (iv) the recorded accountability
for assets is compared with existing assets at reasonable intervals
and appropriate action is taken with respect to any differences.
Except as disclosed in the Registration Statement, the Time of Sale
Disclosure Package and the Prospectus, the Company’s internal
control over financial reporting is effective and none of the
Company, its board of directors or audit committee is aware of any
“significant deficiencies” (except such
“significant deficiencies” described in that certain
letter from ▇▇▇▇▇▇ PLLP to the Audit Committee and Management of
the Company, dated February 16, 2021) or “material
weaknesses” (each as defined by the Public Company Accounting
Oversight Board) in its internal control over financial reporting,
or any fraud, whether or not material, that involves management or
other employees of the Company who have a significant role in the
Company’s internal controls; and since December 31, 2020,
there has been no change in the Company’s internal control
over financial reporting (whether or not remediated) that has
materially affected, or is reasonably likely to materially affect,
the Company’s internal control over financial reporting. The
Company’s board of directors has, subject to the exceptions,
cure periods and the phase in periods specified in the applicable
stock exchange rules (“Exchange
Rules”), validly appointed an audit committee to
oversee internal accounting controls whose composition satisfies
the applicable requirements of the Exchange Rules and the
Company’s board of directors and/or the audit committee has
adopted a charter that satisfies the requirements of the Exchange
Rules.
-10-
(xxii) No
Brokers or Finders. Other than as contemplated by this
Agreement, the Company has not incurred any liability for any
finder’s or broker’s fee or agent’s commission in
connection with the execution and delivery of this Agreement or the
consummation of the transactions contemplated hereby.
(xxiii) Insurance.
The Company carries, or is covered by, insurance from reputable
insurers in such amounts and covering such risks as the Company
reasonably believes is adequate for the conduct of its business and
the value of its properties and as is customary for companies
engaged in similar businesses in similar industries; all policies
of insurance and any fidelity or surety bonds insuring the Company
or its business, assets, employees, officers and directors are in
full force and effect; the Company is in compliance with the terms
of such policies and instruments in all material respects; there
are no material claims by the Company under any such policy or
instrument as to which any insurance company is denying liability
or defending under a reservation of rights clause; the Company has
not been refused any insurance coverage sought or applied for; and
the Company has no 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.
(xxiv) Investment
Company Act. The Company is not and, after giving effect to
the offering and sale of the Securities, will not be an
“investment company,” as such term is defined in the
Investment Company Act of 1940, as amended.
(xxv) Eligibility
to Use Form S-3. The conditions for use of Form S-3, in
connection with the offer and sale of the Securities, as set forth
in the General Instructions thereto, have been
satisfied.
(xxvi) Incorporated
Documents. The documents incorporated by reference in the
Time of Sale 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; any further documents so filed and incorporated by
reference in the Time of Sale Disclosure Package or in the
Prospectus, when such documents are filed with the Commission, will
conform in all material respects to the requirements of the
Exchange Act, and will not contain an untrue statement of a
material fact or omit to state a material fact necessary to make
the statements therein, in the light of the circumstances under
which they were made, not misleading.
-11-
(xxvii) ▇▇▇▇▇▇▇▇-▇▇▇▇▇
Act. The Company is in compliance with all applicable
provisions of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act and the rules and regulations
of the Commission thereunder.
(xxviii) Disclosure
Controls. The Company has established and maintains
disclosure controls and procedures (as defined in Rules 13a-15(e)
and 15d-15(e) under the Exchange Act) and such controls and
procedures are effective in ensuring that material information
relating to the Company is made known to the principal executive
officer and the principal financial officer. The Company has
utilized such controls and procedures in preparing and evaluating
the disclosures in the Registration Statement, in the Time of Sale
Disclosure Package and in the Prospectus.
(xxix) Anti-Bribery
and Anti-Money Laundering Laws. Each of the Company and, to
the Company’s knowledge, its affiliates and any of their
respective officers, directors, supervisors, managers, agents or
employees, has not violated, its participation in the offering will
not violate, and the Company has instituted and maintains policies
and procedures designed to ensure continued compliance with, each
of the following laws: anti-bribery laws, including but not limited
to, any applicable law, rule, or regulation of any locality,
including but not limited to any law, rule, or regulation
promulgated to implement the OECD Convention on Combating Bribery
of Foreign Public Officials in International Business Transactions,
signed December 17, 1997, including the U.S. Foreign Corrupt
Practices Act of 1977, as amended, the U.K. ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇, or
any other law, rule or regulation of similar purposes and scope, or
anti-money laundering laws, including but not limited to,
applicable federal, state, international, foreign or other laws,
regulations or government guidance regarding anti-money laundering,
including, without limitation, Title 18 U.S. Code Section 1956 and
1957, the Patriot Act, the Bank Secrecy Act, and international
anti-money laundering principles or procedures by an
intergovernmental group or organization, such as the Financial
Action Task Force on Money Laundering, of which the United States
is a member and with which designation the United States
representative to the group or organization continues to concur,
all as amended, and any executive order, directive, or regulation
pursuant to the authority of any of the foregoing, or any orders or
licenses issued thereunder.
(xxx) OFAC.
(A) Neither
the Company nor any of its directors, officers or employees, nor,
to the Company’s knowledge, any agent, affiliate or
representative of the Company, is an individual or entity that is,
or is owned or controlled by an individual or entity that
is:
(1) the
subject of any sanctions administered or enforced by the U.S.
Department of Treasury’s Office of Foreign Assets Control,
the United Nations Security Council, the European Union, Her
Majesty’s Treasury, or other relevant sanctions authority
(collectively, “Sanctions”),
nor
-12-
(2) located,
organized or resident in a country or territory that is the subject
of Sanctions (including, without limitation, the Crimea Region of
the Ukraine, Burma/Myanmar, Cuba, Iran, Libya, North Korea, Sudan
and Syria).
(B) 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
individual or entity:
(1) to
fund or facilitate any activities or business of or with any
individual or entity or in any country or territory that, at the
time of such funding or facilitation, is the subject of Sanctions;
or
(2) in
any other manner that will result in a violation of Sanctions by
any individual or entity (including any individual or entity
participating in the offering, whether as underwriter, advisor,
investor or otherwise).
(C) For
the past five years, the Company has not knowingly engaged in, and
is not now knowingly engaged in, any dealings or transactions with
any individual or entity, or in any country or territory, that at
the time of the dealing or transaction is or was the subject of
Sanctions.
(xxxi) Compliance
with Environmental Laws. Except as disclosed in the Time of
Sale Disclosure Package and the Prospectus, the Company is not in
violation of any statute, any rule, regulation, decision or order
of any Governmental Authority or any court, domestic or foreign,
relating to the use, disposal or release of hazardous or toxic
substances or relating to the protection or restoration of the
environment or human exposure to hazardous or toxic substances
(collectively, “Environmental
Laws”). The Company does not own or operate any real
property contaminated with any substance that is subject to any
Environmental Laws, is not liable for any off-site disposal or
contamination pursuant to any Environmental Laws, and is not
subject to any claim relating to any Environmental Laws, which
violation, contamination, liability or claim would, individually or
in the aggregate, have a Material Adverse Effect; and the Company
has no knowledge of any pending investigation which might lead to
such a claim nor is the Company anticipating incurring any material
capital expenditures relating to compliance with Environmental
Laws.
(xxxii) Compliance
with Occupational Laws. The Company (A) is in compliance, in
all material respects, with any and all applicable foreign,
federal, state and local laws, rules, regulations, treaties,
statutes and codes promulgated by any and all Governmental
Authorities (including pursuant to the Occupational Health and
Safety Act) relating to the protection of human health and safety
in the workplace (“Occupational
Laws”); (B) has received all material permits,
licenses or other approvals required of it under applicable
Occupational Laws to conduct its business as currently conducted;
and (C) is in compliance, in all material respects, with all terms
and conditions of such permit, license or approval. No action,
proceeding, revocation proceeding, writ, injunction or claim is
pending or, to the Company’s knowledge, threatened against
the Company relating to Occupational Laws, and the Company does not
have knowledge of any facts, circumstances or developments relating
to its operations or cost accounting practices that would
reasonably be expected to form the basis for or give rise to such
actions, suits, investigations or proceedings.
-13-
(xxxiii) ERISA
and Employee Benefits Matters. (A) To the knowledge of the
Company, no “prohibited transaction” as defined under
Section 406 of ERISA or Section 4975 of the Code and not exempt
under ERISA Section 408 and the regulations and published
interpretations by the United States Department of Labor thereunder
has occurred with respect to any Employee Benefit Plan. At no time
has the Company or any ERISA Affiliate maintained, sponsored,
participated in, contributed to or has or had any liability or
obligation in respect of any Employee Benefit Plan subject to Part
3 of Subtitle B of Title I of ERISA, Title IV of ERISA, or Section
412 of the Code or any “multiemployer plan” as defined
in Section 3(37) of ERISA or any multiple employer plan for which
the Company or any ERISA Affiliate has incurred or could incur
liability under Section 4063 or 4064 of ERISA. No Employee Benefit
Plan provides or promises, or at any time provided or promised,
retiree health, life insurance, or other retiree welfare benefits
except as may be required by the Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended, or similar state law. Each
Employee Benefit Plan is and has been operated in material
compliance with its terms and all applicable laws, including but
not limited to ERISA and the Code and, to the knowledge of the
Company, no event has occurred (including a “reportable
event” as such term is defined in Section 4043 of ERISA) and
no condition exists that would subject the Company or any ERISA
Affiliate to any material tax, fine, lien, penalty or liability
imposed by ERISA, the Code or other applicable law. Each Employee Benefit Plan intended to be
qualified under Code Section 401(a) is so qualified and has a
favorable determination or opinion letter from the U.S. Internal
Revenue Service upon which it can rely, and any such determination
or opinion letter remains in effect and has not been revoked; to
the knowledge of the Company, nothing has occurred since the date
of any such determination or opinion letter that is reasonably
likely to adversely affect such qualification; (B) with
respect to each Foreign Benefit Plan, such Foreign Benefit Plan (1)
if intended to qualify for special tax treatment, meets, in all
material respects, the requirements for such treatment, and (2) if
required to be funded, is funded to the extent required by
applicable law, and with respect to all other Foreign Benefit
Plans, adequate reserves therefor have been established on the
accounting statements of the Company; (C) the Company has no
obligations under any collective bargaining agreement with any
union and no organization efforts are underway with respect to
employees of the Company. As used in this Agreement, “Code”
means the Internal Revenue Code of 1986, as amended; “Employee Benefit
Plan” means any “employee benefit plan”
within the meaning of Section 3(3) of ERISA, including, without
limitation, all stock purchase, stock option, stock-based
severance, employment, change-in-control, medical, disability,
fringe benefit, bonus, incentive, deferred compensation, employee
loan and all other employee benefit plans, agreements, programs,
policies or other arrangements, whether or not subject to ERISA,
under which (1) any current or former employee, director or
independent contractor of the Company has any present or future
right to benefits and which are contributed to, sponsored by or
maintained by the Company or (2) the Company has had or has
any present or future obligation or liability; “ERISA”
means the Employee Retirement Income Security Act of 1974, as
amended; “ERISA
Affiliate” means any member of the Company’s
controlled group as defined in Code Section 414(b), (c), (m) or
(o); and “Foreign Benefit
Plan” means any Employee Benefit Plan established,
maintained or contributed to outside of the United States of
America or which covers any employee working or residing outside of
the United States.
(xxxiv) Business
Arrangements. Except as disclosed in the Registration
Statement, the Time of Sale Disclosure Package and the Prospectus,
the Company has not granted exclusive rights to develop,
manufacture, produce, assemble, distribute, license, market or sell
its products to any other person nor is the Company bound by any
agreement that materially affects the exclusive right of the
Company to develop, manufacture, produce, assemble, distribute,
license, market or sell its products.
-14-
(xxxv) Labor
Matters. No labor problem or dispute with the employees of
the Company exists or is threatened or imminent, and the Company is
not aware of any existing or imminent labor disturbance by the
employees of any of its principal suppliers, contractors or
customers, that would have a Material Adverse Effect.
(xxxvi) Statistical
Information. Any third-party statistical and market-related
data included in the Registration Statement, the Time of Sale
Disclosure Package and the Prospectus are based on or derived from
sources that the Company believes to be reasonably current and
reliable and accurate in all material respects.
(xxxvii) Forward-looking
Statements. No forward-looking statement (within the meaning
of Section 27A of the Securities Act and Section 21E of
the Exchange Act) contained in the Registration Statement, the Time
of Sale Disclosure Package or the Prospectus has been made or
reaffirmed without a reasonable basis or has been disclosed other
than in good faith.
(b) Effect of
Certificates. Any certificate signed by any officer of the
Company and delivered to you or to counsel for the Underwriters
shall be deemed a representation and warranty by the Company to
each Underwriter as to the matters covered thereby.
3. Purchase, Sale and Delivery
of Securities.
(a) Firm
Shares. 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 Firm Shares to the several Underwriters, and each Underwriter
agrees, severally and not jointly, to purchase from the Company the
number of Firm Shares set forth opposite the name of such
Underwriter in Schedule I hereto. The purchase price for each Firm
Share shall be $13.16 per
share. In making this Agreement, each Underwriter is contracting
severally and not jointly; except as provided in Section 3(b), the
agreement of each Underwriter is to purchase only the respective
number of Firm Shares specified in Schedule I hereto.
-15-
The Firm Shares
will be delivered by the Company to you for the accounts of the
several Underwriters against payment of the purchase price therefor
by wire transfer of same day funds payable to the order of the
Company at such location as may be mutually acceptable, at
9:00 a.m. Central time on the second (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 third) full business day
following the date hereof, or at such other time and date as you
and the Company determine pursuant to Rule 15c6-1(a) under the
Exchange Act, such time and date of delivery being herein referred
to as the “First Closing
Date.”
(b) Option
Shares. On the basis of the representations, warranties and
agreements herein contained, but subject to the terms and
conditions herein set forth, the Company hereby grants to the
several Underwriters an option to purchase all or any portion of
the Option Shares at the same purchase price as the Firm Shares,
for use solely in covering any over-allotments made by the
Underwriters in the sale and distribution of the Firm Shares. The
option granted hereunder may be exercised in whole or in part at
any time (but not more than once) within 30 days after the date of
this Agreement upon notice (confirmed in writing) by the
Representative to the Company setting forth the aggregate number of
Option Shares as to which the Underwriters are exercising the
option and the date and time, as determined by you, when the Option
Shares are to be delivered, such time and date being herein
referred to as the “Second Closing
Date”; provided, however, that the Second Closing Date
shall not be earlier than the First Closing Date nor earlier than
the second business day after the date on which the option shall
have been exercised. Each of the First Closing Date and the Second
Closing Date may be referred to herein as a “Closing
Date.” Each Underwriter agrees, severally and not
jointly, to purchase the number of Option Shares (subject to such
adjustments to eliminate fractional shares as you may determine)
that bears the same proportion of the total number of Option Shares
to be purchased on such Second Closing Date as the number of Firm
Shares set forth in Schedule I hereto opposite the name of such
Underwriter bears to the total number of Firm Shares. No Option
Shares shall be sold and delivered unless the Firm Shares
previously have been, or simultaneously are, sold and
delivered.
The
Option Shares will be delivered by the Company to you for the
accounts of the several Underwriters against payment of the
purchase price therefor by wire transfer of same day funds payable
to the order of the Company at such location as may be mutually
acceptable at 9:00 a.m. Central time on the Second Closing
Date.
(c) Delivery.
The Company shall deliver the Firm Shares and the Option Shares
through the facilities of the Depository Trust Company unless the
Representative otherwise instructs.
(d) Purchase
by Representative on Behalf of Underwriters. It is
understood that you, individually and not as Representative of the
several Underwriters, may (but shall not be obligated to) make
payment to the Company on behalf of any Underwriter for the
Securities to be purchased by such Underwriter. Any such payment by
you shall not relieve any such Underwriter of any of its
obligations hereunder. Nothing contained herein shall constitute
any of the Underwriters an unincorporated association or partner
with the Company.
-16-
4.
Covenants of the
Company. The Company covenants and agrees with the several
Underwriters as follows:
(a) Required
Filings. During the period beginning on the date hereof and
ending on the later of the Second Closing Date or such date, as in
the opinion of counsel for the Underwriters, the Prospectus is no
longer required by law to be delivered (assuming the absence of
Rule 172 under the Securities Act), in connection with sales by an
Underwriter or a dealer (the “Prospectus Delivery
Period”), prior to amending or supplementing the
Registration Statement (including any Rule 462(b) Registration
Statement), the Time of Sale Disclosure Package or the Prospectus,
the Company shall furnish to the Underwriters for review a copy of
each such proposed amendment or supplement, and the Company shall
not file any such proposed amendment or supplement to which the
Underwriters or counsel to the Underwriters reasonably object.
Subject to this Section 4(a), promptly following execution of this
Agreement, the Company will prepare the Prospectus containing the
Rule 430B Information and other selling terms of the Securities,
the plan of distribution thereof and such other information as may
be required by the Securities Act or the Rules and Regulations or
as the Underwriters and the Company may deem appropriate, and if
requested by the Underwriters, an issuer free writing prospectus
containing the selling terms of the Securities and such other
information as the Company and the Underwriters may deem
appropriate, and will file or transmit for filing with the
Commission, in accordance with Rule 424(b) or Rule 433, as the case
may be, the Prospectus and each issuer free writing
prospectus.
(b) Notification of
Certain Commission Actions. During the Prospectus Delivery
Period, the Company shall promptly advise the Underwriters in
writing (i) of the receipt of any comments of, or requests for
additional or supplemental information from, the Commission, (ii)
of the time and date of any filing of any post-effective amendment
to the Registration Statement or any amendment or supplement to any
Preliminary Prospectus, the Time of Sale Disclosure Package or the
Prospectus, (iii) of the time and date that any post-effective
amendment to the Registration Statement becomes effective, (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 of any order preventing or suspending its use
or the use of any Preliminary Prospectus, the Time of Sale
Disclosure Package, the Prospectus or any issuer free writing
prospectus, or (v) of any proceedings to remove, suspend or
terminate from listing or quotation the Common Stock from any
securities exchange upon which it is listed for trading or included
or designated for quotation, or of the threatening or initiation of
any proceedings for any of such purposes. If the Commission shall
enter any such stop order at any time, the Company will use its
best efforts to obtain the lifting of such order at the earliest
possible moment. Additionally, the Company agrees that it shall
comply with the provisions of Rules 424(b) and 430B, as applicable,
under the Securities Act and will use its reasonable efforts to
confirm that any filings made by the Company under Rule 424(b),
Rule 433 or Rule 462 were received in a timely manner by the
Commission (without reliance on Rule 424(b)(8) or Rule
164(b)).
(c) Continued
Compliance with Securities Laws.
(i) During the
Prospectus Delivery Period, the Company will comply with all
requirements imposed upon it by the Securities Act, as now and
hereafter amended, and by the Rules and Regulations, as from time
to time in force, and by the Exchange Act so far as necessary to
permit the continuance of sales of or dealings in the Securities as
contemplated by the provisions hereof, the Time of Sale Disclosure
Package and the Prospectus. If during the Prospectus Delivery
Period any event occurs as a result of which the Prospectus (or if
the Prospectus is not yet available to prospective purchasers, the
Time of Sale Disclosure Package) would include an untrue statement
of a material fact or omit to state a material fact necessary to
make the statements therein, in the light of the circumstances then
existing, not misleading, or if during the Prospectus Delivery
Period it is necessary or appropriate in the opinion of the Company
or its counsel or the Underwriters or counsel to the Underwriters
to amend the Registration Statement or supplement the Prospectus
(or, if the Prospectus is not yet available to prospective
purchasers, the Time of Sale Disclosure Package) to comply with the
Securities Act or to file under the Exchange Act any document which
would be deemed to be incorporated by reference in the Prospectus
(or if the Prospectus is not yet available to prospective
purchasers, the Time of Sale Disclosure Package) in order to comply
with the Securities Act or the Exchange Act, the Company promptly
will (x) notify you of such untrue statement or omission, (y)
amend the Registration Statement or supplement the Prospectus (or,
if the Prospectus is not yet available to prospective purchasers,
the Time of Sale Disclosure Package) or file such document (at the
expense of the Company) so as to correct such statement or omission
or effect such compliance, and (z) notify you when any amendment to
the Registration Statement is filed or becomes effective or when
any supplement to the Prospectus (or, if the Prospectus is not yet
available to prospective purchasers, the Time of Sale Disclosure
Package) is filed.
-17-
(ii)
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, the Preliminary Prospectus or the Prospectus 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
(x) has promptly notified or promptly will notify the
Underwriters of such conflict, untrue statement or omission,
(y) has promptly amended or will promptly amend or supplement,
at its own expense, such issuer free writing prospectus to
eliminate or correct such conflict, untrue statement or omission,
and (z) has notified or promptly will notify you when such
amendment or supplement was or is filed with the Commission where
so required to be filed.
(d) Blue Sky
Qualifications. The Company shall take or cause to be taken
all necessary action required by law to qualify the Securities for
sale under the securities laws of such jurisdictions as you
reasonably designate and to continue such qualifications in effect
so long as required for the distribution of the Securities, except
that the Company shall not be required in connection therewith to
qualify as a foreign corporation or to execute a general consent to
service of process in any state.
(e)
Provision of
Documents. The Company will furnish, at its own expense, to
the Underwriters and counsel for the Underwriters copies of the
Registration Statement, and to the Underwriters and any dealer each
Preliminary Prospectus, the Time of Sale Disclosure Package, the
Prospectus, any issuer free writing prospectus, and all amendments
and supplements to such documents, in each case as soon as
available and in such quantities as you may from time to time
reasonably request.
(f)
Rule 158.
The Company will make generally available to its security holders
as soon as practicable, but in no event later than 15 months after
the end of the Company’s current fiscal quarter, an earnings
statement (which need not be audited) covering a 12-month period
that shall satisfy the provisions of Section 11(a) of the
Securities Act and Rule 158 of the Rules and
Regulations.
(g)
Payment and
Reimbursement of Expenses. The Company, whether or not the
transactions contemplated hereunder are consummated or this
Agreement is terminated, will pay or cause to be paid (i) all
expenses (including transfer taxes allocated to the respective
transferees) incurred in connection with the delivery to the
Underwriters of the Securities, (ii) all expenses and fees
(including, without limitation, fees and expenses of the
Company’s accountants and counsel) in connection with the
preparation, printing, filing, delivery, and shipping of the
Registration Statement (including the financial statements therein
and all amendments, schedules, and exhibits thereto), the
Securities, each Preliminary Prospectus, the Time of Sale
Disclosure Package, the Prospectus, any issuer free writing
prospectus and any amendment thereof or supplement thereto, and the
printing, delivery, and shipping of this Agreement and other
underwriting documents, including Blue Sky Memoranda (covering the
states and other applicable jurisdictions), (iii) all filing fees
incurred in connection with the qualification of the Securities for
offering and sale by the Underwriters or by dealers under the
securities or blue sky laws of the jurisdictions which you shall
designate, (iv) the fees and expenses of the Company’s
transfer agent or registrar, (v) the filing fees incident to any
required review and approval by FINRA of the terms of the sale of
the Securities, (vi) listing fees, if any, (vii) the cost and
expenses of the Company relating to investor presentations or any
“roadshow” undertaken in connection with marketing of
the Securities, (viii) all reasonable, out-of-pocket expenses of
the Underwriters (including, but not limited to, reasonable fees
and disbursements of the Underwriters’ counsel and the
Underwriters’ reasonable travel, database, printing, postage,
facsimile and telephone expenses) incurred in connection with the
Underwriters’ investigation of the Company, preparation to
market and marketing the Securities, sale of the Securities or in
contemplation of performing their obligations hereunder, which
amount shall not exceed $112,500 in the aggregate, and (ix) all
other costs and expenses of the Company incident to the performance
of its obligations hereunder that are not otherwise specifically
provided for herein.
-18-
(h)
Use of
Proceeds. The Company will apply the net proceeds from the
sale of the Securities to be sold by it hereunder for the purposes
set forth in the Time of Sale Disclosure Package and in the
Prospectus.
(i)
Company Lock
Up. The Company will not, without the prior written consent
of the Representative, from the date of execution of this Agreement
and continuing to and including the date 90 days after the date of
the Prospectus (the “Lock-Up
Period”), (i) offer, pledge, announce the intention to
sell, sell, contract to sell, sell any option or contract to
purchase, purchase any option or contract to sell, grant any
option, right or warrant to purchase or otherwise transfer or
dispose of, directly or indirectly, any shares of Common Stock or
any securities convertible into or exercisable or exchangeable for
Common Stock or (ii) enter into any swap or other agreement that
transfers, in whole or in part, any of the economic consequences of
ownership of the Common Stock, whether any such transaction
described in clause (i) or (ii) above is to be settled by delivery
of Common Stock or such other securities, in cash or otherwise,
except, in each case, for (v) the sale of the Securities as
contemplated by this Agreement, (w) issuances of shares of Common
Stock upon the exercise or conversion of options or warrants
disclosed as outstanding in the Registration Statement, the Time of
Sale Disclosure Package and the Prospectus, (x) the issuance of
stock options or restricted stock to employees or directors,
provided that such stock options are not exercisable and such
restricted stock shall not vest and shall remain subject to a risk
of forfeiture during the Lock-Up Period, pursuant to the
Company’s stock option, stock bonus and other stock plans or
arrangements, as in effect on the date hereof in the ordinary
course of business consistent with past practices, (y) the filing
of a registration statement on Form S-8 to register additional
securities under the Company’s stock option, stock bonus and
other stock plans or arrangements, and (z) the issuance of shares
of Common Stock, options or convertible securities to a Strategic
Investor in connection with a license, joint venture, collaboration
or similar agreement. For purposes of this Section 4(i),
“Strategic
Investor” shall mean a third-party in the
biotechnology, pharmaceutical or similar industry or an affiliate
of a biotechnology, pharmaceutical or similar company, such as an
affiliated investment fund. The Company agrees not to accelerate
the vesting of any option or warrant or the lapse of any risks of
forfeiture prior to the expiration of the Lock-Up
Period.
(j)
Stockholder
Lock-Ups. The Company has caused to be delivered to you
prior to the date of this Agreement a letter, in the form of
Exhibit A hereto (the “Lock-Up
Agreement”), from each individual or entity listed on
Schedule IV hereto. The Company will enforce the terms of each
Lock-Up Agreement and issue stop-transfer instructions to the
transfer agent for the Common Stock with respect to any transaction
or contemplated transaction that would constitute a breach of or
default under the applicable Lock-Up Agreement.
(k)
No Market
Stabilization or Manipulation. The Company has not taken and
will not take, directly or indirectly, any action designed to or
which might reasonably be expected to cause or result in, or which
has constituted, the stabilization or manipulation of the price of
any security of the Company to facilitate the sale or resale of the
Securities.
(l)
SEC
Reports. During the Prospectus Delivery Period, the Company
will file on a timely basis with the Commission such periodic and
special reports as required by the Rules and
Regulations.
(m) Internal
Controls. During the Prospectus Delivery Period, the Company
will maintain a system of internal control over financial reporting
(as such term is defined in Rule 13a-15(f) of the Exchange Act)
that complies with the requirements of the Exchange Act and that
has been designed by, or under the supervision of, the
Company’s principal executive and principal financial
officers, to provide reasonable assurance regarding the reliability
of financial reporting and the preparation of financial statements
for external purposes in accordance with GAAP. Further, during the
Prospectus Delivery Period, the Company will maintain disclosure
controls and procedures (as defined in Rules 13a-15(e) and
15d-15(e) under the Exchange Act) that are effective in ensuring
that material information relating to the Company is made known to
the principal executive officer and the principal financial officer
and such controls and procedures are effective to perform the
functions for which they were established.
-19-
(n)
▇▇▇▇▇▇▇▇-▇▇▇▇▇.
During the Prospectus Delivery Period, the Company will comply with
all applicable provisions of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act.
(o)
Free Writing
Prospectuses. Unless the Company obtained or obtains the
prior written consent of the Representative, it has not made and
will not make any offer relating to the Securities that would
constitute an issuer free writing prospectus or that would
otherwise constitute a free writing prospectus required to be filed
with the Commission; provided that the prior written consent of the
Representative shall be deemed to have been given in respect of the
free writing prospectuses included in Schedule II hereto. Any such
free writing prospectus consented to by the Representative is
hereinafter referred to as a “Permitted Free
Writing Prospectus.” The Company has treated or agrees
that it will treat each Permitted Free Writing Prospectus as an
issuer free writing prospectus and has complied and will comply
with the requirements of Rule 164 and Rule 433 applicable to any
Permitted Free Writing Prospectus.
(p) At Market Issuance
Sales Agreement. As of the Time of Sale, the Company has
caused all placement notices issued pursuant to that certain At
Market Issuance Sales Agreement, dated as of June 5, 2020, by and
between the Company and ▇. ▇▇▇▇▇ FBR, Inc. (the “ATM
Agreement”) to be terminated and has delivered to you
confirmation of such terminations. Promptly following the execution
of this Agreement, the Company will terminate the ATM Agreement by
delivering notice of such termination pursuant to the terms of the
ATM Agreement and will provide you with confirmation of such
termination. The Company will not withdraw such notice of
termination nor will the Company deliver any further placement
notices pursuant to that ATM Agreement prior to the effective time
of the notice of termination.
5. Conditions of
Underwriters’ Obligations. The obligations of the
several Underwriters hereunder are subject to the accuracy, as of
the date hereof and at each of the First Closing Date and the
Second Closing Date (as if made at such Closing Date), of and
compliance with all representations, warranties and agreements of
the Company contained herein, to the performance by the Company of
its obligations hereunder and to the following additional
conditions:
(a) Required Filings;
Absence of Certain Commission Actions. If filing of the
Prospectus, or any amendment or supplement thereto, or any issuer
free writing prospectus, is required under the Securities Act or
the Rules and Regulations, the Company shall have filed the
Prospectus (or such amendment or supplement) or such issuer free
writing prospectus with the Commission in the manner and within the
time period so required (without reliance on Rule 424(b)(8) or Rule
164(b)); the Registration Statement shall be effective; no stop
order suspending the effectiveness of the Registration Statement or
any part thereof, any Rule 462(b) Registration Statement, or any
amendment thereof, nor suspending or preventing the use of the Time
of Sale Disclosure Package, the Prospectus or any issuer free
writing prospectus shall have been issued; no proceedings for the
issuance of such an order shall have been initiated or threatened;
and any request of the Commission for additional information (to be
included in the Registration Statement, the Time of Sale Disclosure
Package, the Prospectus, any issuer free writing prospectus or
otherwise) shall have been complied with to your
satisfaction.
(b) Continued
Compliance with Securities Laws. No Underwriter shall have
advised the Company that (i) the Registration Statement or any
amendment thereof or supplement thereto contains an untrue
statement of a material fact which, in your opinion, is material or
omits to state a material fact which, in your opinion, is required
to be stated therein or necessary to make the statements therein
not misleading, or (ii) the Time of Sale Disclosure Package or the
Prospectus, or any amendment thereof or supplement thereto, or any
issuer free writing prospectus contains an untrue statement of fact
which, in your opinion, is material, or omits to state a fact
which, in your opinion, is material and is required to be stated
therein, or necessary to make the statements therein, in light of
the circumstances under which they are made, not
misleading.
-20-
(c) Absence of Certain
Events. Except as contemplated in the Time of Sale
Disclosure Package and in the Prospectus, subsequent to the date as
of which information is given in the Time of Sale Disclosure
Package, the Company shall not have incurred any material
liabilities or obligations, direct or contingent, or entered into
any material transactions, or declared or paid any dividends or
made any distribution of any kind with respect to its capital
stock; and there shall not have been any change in the capital
stock (other than a change in the number of outstanding shares of
Common Stock due to the issuance of shares upon the exercise of
outstanding options or warrants), or any material change in the
short-term or long-term debt of the Company, or any issuance of
options, warrants, convertible securities or other rights to
purchase the capital stock of the Company, or any event, occurrence
or development that has had a Material Adverse Effect or would
reasonably be expected to have a Material Adverse Effect, or any
loss by strike, fire, flood, earthquake, accident or other
calamity, whether or not covered by insurance, incurred by the
Company, the effect of which, in any such case described above, in
your judgment, makes it impractical or inadvisable to offer or
deliver the Securities on the terms and in the manner contemplated
in the Time of Sale Disclosure Package and in the
Prospectus.
(d) Opinion of Company
Counsel. On each Closing Date, there shall have been
furnished to you, as Representative of the several Underwriters,
the opinion of ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇,
P.A., counsel for the Company, dated such Closing Date and
addressed to you, in form and substance satisfactory to
you.
(e) Opinion of
Underwriters’ Counsel. On each Closing Date, there
shall have been furnished to you, as Representative of the several
Underwriters, such opinion or opinions from Faegre Drinker ▇▇▇▇▇▇
& ▇▇▇▇▇ LLP, counsel for the several Underwriters, dated such
Closing Date and addressed to you, with respect to such matters as
you reasonably may request, and such counsel shall have received
such papers and information as they request to enable them to pass
upon such matters.
(f) Opinion of
Company’s Intellectual Property Counsel. On each
Closing Date, there shall have been furnished to you, as
Representative of the several Underwriters, the opinion of ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Scarborough LLP, intellectual property counsel
for the Company, dated such Closing Date and addressed to you, in
form and substance satisfactory to you.
(g) Comfort Letter of
▇▇▇▇▇▇ PLLP. On the date hereof, on the effective date of
any post-effective amendment to the Registration Statement filed
after the date hereof and on each Closing Date you, as
Representative of the several Underwriters, shall have received an
accountant’s “comfort” letter from ▇▇▇▇▇▇ PLLP,
dated such date and addressed to you, in form and substance
satisfactory to you.
-21-
(h) Officers’
Certificate. On each Closing Date, there shall have been
furnished to you, as Representative of the several Underwriters, a
certificate, dated such Closing Date and addressed to you, signed
by the chief executive officer and by the chief financial officer
of the Company, to the effect that:
(i) The representations
and warranties of the Company in this Agreement are true and
correct as if made at and as of such Closing Date, and the Company
has complied with all the agreements and satisfied all the
conditions on its part to be performed or satisfied at or prior to
such Closing Date;
(ii) No
stop order or other order suspending the effectiveness of the
Registration Statement or any part thereof or any amendment thereof
or the qualification of the Securities for offering or sale nor
suspending or preventing the use of the Time of Sale Disclosure
Package, the Prospectus or any issuer free writing prospectus, has
been issued, and no proceeding for that purpose has been instituted
or, to the best of their knowledge, is contemplated by the
Commission or any state or regulatory body; and
(iii) Affirms
the accuracy of the matters set forth in Section 5(c).
(i) Lock-Up
Agreement. You, as Representative of the several
Underwriters, shall have received all of the Lock-Up Agreements
referenced in Section 4(j) and the Lock-Up Agreements shall remain
in full force and effect.
(j) FINRA No
Objections. FINRA shall have raised no objection to the
fairness and reasonableness of the underwriting terms and
arrangements.
(k) Other
Documents. The Company shall have furnished to you, as
Representative of the several Underwriters, and counsel for the
Underwriters such additional documents, certificates and evidence
as you or they may have reasonably requested.
(l) Exchange
Listing. The Securities to be delivered on such Closing Date
have been approved for listing on the Nasdaq Capital Market,
subject to official notice of issuance.
(m) Termination of At Market Issuance
Sales Agreement. The Company shall have delivered
written confirmation of delivery of the notice of termination of
the ATM Agreement to the Underwriters.
All
such opinions, certificates, letters and other documents will be in
compliance with the provisions hereof only if they are satisfactory
in form and substance to you and counsel for the Underwriters. The
Company will furnish you with such conformed copies of such
opinions, certificates, letters and other documents as you shall
reasonably request.
-22-
6. Indemnification and
Contribution.
(a) Indemnification by
the Company. The Company agrees to indemnify and hold
harmless each Underwriter, its affiliates, directors and officers
and each person, if any, who controls such Underwriter within the
meaning of Section 15 of the Securities Act or Section 20
of the Exchange Act, from and against any losses, claims, damages
or liabilities, joint or several, to which such 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 an untrue statement or alleged
untrue statement of a material fact contained in the Registration
Statement, including the Rule 430B Information and any other
information deemed to be a part of the Registration Statement at
the time of effectiveness and at any subsequent time pursuant to
the Rules and Regulations, if applicable, any Preliminary
Prospectus, the Time of Sale Disclosure Package, the Prospectus, or
any amendment or supplement thereto, any issuer free writing
prospectus, or any issuer information that the Company has filed or
is required to file pursuant to Rule 433(d) of the Rules and
Regulations, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not
misleading, and will reimburse each Underwriter for any legal or
other expenses reasonably incurred by it in connection with
investigating or defending against such loss, claim, damage,
liability or action as such expenses are incurred; provided, however, that the Company
will not be liable in any such case to the extent that any such
loss, claim, damage, liability or action arises out of or is based
upon an untrue statement or alleged untrue statement or omission or
alleged omission made in reliance upon and in conformity with
written information furnished to the Company by you, or by any
Underwriter through you, specifically for use in the preparation
thereof; it being understood and agreed that the only information
furnished by an Underwriter consists of the information described
as such in Section 6(e).
(b) Indemnification by
the Underwriters. Each Underwriter will, severally and not
jointly, indemnify and hold harmless the Company, its affiliates,
directors and officers and each person, if any, who controls the
Company within the meaning of Section 15 of the Securities Act
and Section 20 of the Exchange Act, from and against any
losses, claims, damages or liabilities, joint or several, 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, including
the Rule 430B Information and any other information deemed to be a
part of the Registration Statement at the time of effectiveness and
at any subsequent time pursuant to the Rules and Regulations, if
applicable, any Preliminary Prospectus, the Time of Sale Disclosure
Package, the Prospectus, or any amendment or supplement thereto, or
any issuer free writing prospectus, or any issuer information that
the Company has filed or is required to file pursuant to Rule
433(d) of the Rules and Regulations, 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 reliance upon
and in conformity with written information furnished to the Company
by you, or by such Underwriter through you, specifically for use in
the preparation thereof (it being understood and agreed that the
only information furnished by an Underwriter consists of the
information described as such in Section 6(e)), 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 as such expenses
are incurred.
-23-
(c) Notice and
Procedures. Promptly after receipt by an indemnified party
under Section 6(a) or 6(b) of notice of the commencement of any
action, such indemnified party shall, if a claim in respect thereof
is to be made against the indemnifying party under such subsection,
notify the indemnifying party in writing of the commencement
thereof; but the omission so to notify the indemnifying party shall
not relieve the indemnifying party from any liability that it may
have to any indemnified party except to the extent such
indemnifying party has been materially prejudiced by such failure
(through the forfeiture of substantive rights or defenses). In case
any such action shall be brought against any indemnified party, and
it shall notify the indemnifying party of the commencement thereof,
the indemnifying party shall be entitled to participate in, and, to
the extent that it shall wish, jointly with any other indemnifying
party similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party, and after notice
from the indemnifying party to such indemnified party of the
indemnifying party’s election so to assume the defense
thereof, the indemnifying party shall not be liable to such
indemnified party under such subsection for any legal or other
expenses subsequently incurred by such indemnified party in
connection with the defense thereof other than reasonable costs of
investigation; provided,
however, that if, in the
reasonable judgment of the Representative (upon written advice
received from its outside counsel), it is advisable for the
Underwriters to be represented by separate counsel, the
Representative shall have the right to employ a single counsel (in
addition to local counsel) to represent the Representative and all
Underwriters who may be subject to liability arising from any claim
in respect of which indemnity may be sought by the Underwriters
under Section 6(a), in which event the reasonable fees and expenses
of such separate counsel shall be borne by the indemnifying party
or parties and reimbursed to the Underwriters as incurred. An
indemnifying party shall not be obligated under any settlement
agreement, consent to judgment or other compromise relating to any
action under this Section 6 to which it has not agreed in writing.
In addition, no indemnifying party shall, without the prior written
consent of the indemnified party (which consent shall not be
unreasonably withheld or delayed), effect any settlement of any
pending or threatened proceeding unless such settlement includes an
unconditional release of such indemnified party for all liability
on claims that are the subject matter of such proceeding and does
not include a statement as to, or an admission of, fault,
culpability or a failure to act by or on behalf of an indemnified
party. Notwithstanding the foregoing, if at any time an indemnified
party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel pursuant to this
Section 6(c), such indemnifying party agrees that it shall be
liable for any settlement effected without its written consent if
(i) such settlement is entered into more than 45 days after receipt
by such indemnifying party of the aforesaid request and (ii) such
indemnifying party shall not have reimbursed such indemnified party
in accordance with such request prior to the date of such
settlement.
-24-
(d) Contribution;
Limitations on Liability; Non-Exclusive Remedy. If the
indemnification provided for in this Section 6 is unavailable
or insufficient to hold harmless an indemnified party under
Section 6(a) or 6(b), 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 Section 6(a) or 6(b), (i) in such proportion as is
appropriate to reflect the relative benefits received by the
Company on the one hand and the Underwriters on the other from the
offering of the Securities or (ii) if the allocation provided
by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative
benefits referred to in clause (i) above but also the relative
fault of the Company on the one hand and the Underwriters on the
other 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 Underwriters on the
other shall be deemed to be in the same proportion as the total net
proceeds from the offering (before deducting expenses) received by
the Company bear to the total underwriting discounts and
commissions received by the Underwriters, in each case as set forth
in the table on the cover page of the Prospectus. The relative
fault shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact
relates to information supplied by the Company or the Underwriters
and the parties’ relevant intent, knowledge, access to
information and opportunity to correct or prevent such untrue
statement or omission. The Company and the Underwriters agree that
it would not be just and equitable if contributions pursuant to
this Section 6(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 Section 6(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 Section 6(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
Section 6(d). Notwithstanding the provisions of this
Section 6(d), no Underwriter shall be required to contribute
any amount in excess of the amount by which the total underwriting
discounts and commissions received by such Underwriter with respect
to the Securities purchased by it hereunder exceeds the amount of
any damages that such Underwriter has otherwise been required to
pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The
Underwriters’ obligations in this Section 6(d) to
contribute are several in proportion to their respective
underwriting obligations and not joint. The remedies provided for
in this Section 6 are not exclusive and shall not limit any rights
or remedies that might otherwise be available to any indemnified
party at law or in equity.
(e) Information
Provided by the Underwriters. The Underwriters severally
confirm and the Company acknowledges that the statements with
respect to the public offering of the Securities by the
Underwriters set forth in the second paragraph under the caption
“Underwriting” in the Time of Sale Disclosure Package
and in the Prospectus are correct and constitute the only
information concerning such Underwriter furnished in writing to the
Company by or on behalf of the Underwriters specifically for
inclusion in the Registration Statement, any Preliminary
Prospectus, the Time of Sale Disclosure Package, the Prospectus or
any issuer free writing prospectus.
7. Representations and
Agreements to Survive Delivery. All representations,
warranties, and agreements of the Company and the several
Underwriters herein or in certificates delivered pursuant hereto,
including but not limited to the agreement of the Company and the
several Underwriters contained in Section 6, shall remain operative
and in full force and effect regardless of any investigation made
by or on behalf of any Underwriter or any controlling person
thereof, or the Company or any of its officers, directors, or
controlling persons, and shall survive delivery of, and payment
for, the Securities to and by the Underwriters hereunder and any
termination of this Agreement.
-25-
8. Termination
of this Agreement.
(a) Right to
Terminate. You, as Representative of the several
Underwriters, shall have the right to terminate this Agreement by
giving notice to the Company as hereinafter specified at any time
at or prior to the First Closing Date, and the option referred to
in Section 3(b), if exercised, may be cancelled at any time
prior to the Second Closing Date, if (i) the Company shall
have failed, refused or been unable, at or prior to such Closing
Date, to perform any agreement on its part to be performed
hereunder, (ii) any condition of the Underwriters’
obligations hereunder is not fulfilled, (iii) trading in the
Company’s Common Stock shall have been suspended by the
Commission or the Nasdaq Capital Market or trading in
securities generally on the NYSE American, Nasdaq Stock Market or
New York Stock Exchange shall have been suspended,
(iv) minimum or maximum prices for trading shall have been
fixed, or maximum ranges for prices for securities shall have been
required, on the NYSE American, Nasdaq Stock Market or New York
Stock Exchange, by such exchange or by order of the Commission or
any other Governmental Authority having jurisdiction, (v) a
banking moratorium shall have been declared by federal or New York
state authorities or a material disruption in commercial banking or
securities settlement or clearance services in the United States,
or (vi) there shall have occurred any attack on, outbreak or
escalation of hostilities or act of terrorism involving the United
States, any declaration by the United States of a national
emergency or war, any material adverse change in financial markets,
any substantial change or development involving a prospective
substantial change in United States or international political,
financial or economic conditions, or any other calamity or crisis
that, in your judgment, is material and adverse and makes it
impractical or inadvisable to proceed with the completion of the
sale of and payment for the Securities.
(b) Notice of
Termination. If you elect to terminate this Agreement as
provided in this Section 8, you shall promptly notify the Company
by telephone, confirmed by letter.
(c) Effect of
Termination. No party shall be relieved of any liability
under this Agreement arising from any breach of its obligations
hereunder occurring prior to termination of this Agreement as a
result of the termination of this Agreement.
9. Notices. Except as
otherwise provided herein, all communications hereunder shall be in
writing and, if to the Underwriters, shall be mailed via overnight
delivery service or hand delivered to ▇▇▇▇▇-▇▇▇▇▇▇ Capital Group
LLC, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, Attention: General Counsel, with a copy to (which shall not
constitute notice) Faegre Drinker ▇▇▇▇▇▇ & ▇▇▇▇▇ LLP, 2200
▇▇▇▇▇ Fargo Center, ▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇; if to the Company, shall
be mailed via overnight delivery service or hand delivered to it at
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, with a copy to (which shall not
constitute notice) ▇▇▇▇▇▇▇▇▇▇ &
▇▇▇▇▇, P.A., ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇; or in each
case to such other address as the person to be notified may have
requested in writing. Any party to this Agreement may change such
address for notices by sending to the parties to this Agreement
written notice of a new address for such purpose.
-26-
10. Persons Entitled to Benefit
of Agreement. This Agreement shall inure to the benefit of
and be binding upon the parties hereto and their respective
successors and assigns and the controlling persons, officers and
directors referred to in Section 6. Nothing in this Agreement is
intended or shall be construed to give to any other person, firm or
corporation any legal or equitable remedy or claim under or in
respect of this Agreement or any provision herein contained. The
term “successors and assigns” as herein used shall not
include any purchaser, as such purchaser, of any of the Securities
from any of the several Underwriters.
11. Absence of Fiduciary
Relationship. The Company acknowledges and agrees that: (a)
the Underwriters have been retained solely to act as underwriters
in connection with the sale of the Securities and that no
fiduciary, advisory or agency relationship between the Company and
the Underwriters has been created in respect of any of the
transactions contemplated by this Agreement, irrespective of
whether the Underwriters have advised or are advising the Company
on other matters; (b) the price and other terms of the Securities
set forth in this Agreement were established by the Company
following discussions and arms-length negotiations with the
Underwriters and the Company is capable of evaluating and
understanding and understands and accepts the terms, risks and
conditions of the transactions contemplated by this Agreement; (c)
it has been advised that the Underwriters and their affiliates are
engaged in a broad range of transactions which may involve
interests that differ from those of the Company and that the
Underwriters have no obligation to disclose such interest and
transactions to the Company by virtue of any fiduciary, advisory or
agency relationship; (d) it has been advised that the Underwriters
are acting, in respect of the transactions contemplated by this
Agreement, solely for the benefit of the Underwriters, and not on
behalf of the Company; (e) it waives to the fullest extent
permitted by law, any claims it may have against the Underwriters
for breach of fiduciary duty or alleged breach of fiduciary duty in
respect of any of the transactions contemplated by this Agreement
and agrees that the Underwriters shall have no liability (whether
direct or indirect) to the Company in respect of such a fiduciary
duty claim on behalf of or in right of the Company, including
stockholders, employees or creditors of the Company.
12. Recognition of the U.S.
Special Resolution Regimes.
(a) In the event that
any Underwriter that is a Covered Entity becomes subject to a
proceeding under a U.S. Special Resolution Regime, the transfer
from such Underwriter of this Agreement, and any interest and
obligation in or under this Agreement, will be effective to the
same extent as the transfer would be effective under the U.S.
Special Resolution Regime if this Agreement, and any such interest
and obligation, were governed by the laws of the United States or a
state of the United States.
(b)
In the
event that any Underwriter that is a Covered Entity or a BHC Act
Affiliate of such Underwriter becomes subject to a proceeding under
a U.S. Special Resolution Regime, Default Rights under this
Agreement that may be exercised against such Underwriter are
permitted to be exercised to no greater extent than such Default
Rights could be exercised under the U.S. Special Resolution Regime
if this Agreement were governed by the laws of the United States or
a state of the United States.
-27-
(c) As used in this
Section 12:
“BHC Act
Affiliate” has the meaning assigned to the term
“affiliate” in, and shall be interpreted in accordance
with, 12 U.S.C. § 1841(k).
“Covered
Entity” means any of the following: (i) a
“covered entity” as that term is defined in, and
interpreted in accordance with, 12 C.F.R. § 252.82(b); (ii) a
“covered bank” as that term is defined in, and
interpreted in accordance with, 12 C.F.R. § 47.3(b); or (iii)
a “covered FSI” as that term is defined in, and
interpreted in accordance with, 12 C.F.R. §
382.2(b).
“Default
Right” has the meaning assigned to that term in, and
shall be interpreted in accordance with, 12 C.F.R. §§
252.81, 47.2 or 382.1, as applicable.
“U.S. Special
Resolution Regime” means each of (i) the Federal
Deposit Insurance Act and the regulations promulgated thereunder
and (ii) Title II of the ▇▇▇▇-▇▇▇▇▇ ▇▇▇▇ Street Reform and Consumer
Protection Act and the regulations promulgated
thereunder.
13. Governing Law; Waiver of
Jury Trial. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York. The
Company (on its behalf and, to the extent permitted by applicable
law, on behalf of its stockholders and affiliates) and each of the
Underwriters hereby irrevocably waive, to the fullest extent
permitted by applicable law, any and all right to trial by jury in
any legal proceeding arising out of or relating to this Agreement
or the transactions contemplated hereby.
14. Counterparts. This
Agreement may be executed and delivered (including by electronic
mail attaching a portable document file (.pdf)) in one or more
counterparts and, if executed in more than one counterpart, the
executed counterparts shall each be deemed to be an original and
all such counterparts shall together constitute one and the same
instrument.
15. General
Provisions. This Agreement constitutes the entire agreement
of the parties to this Agreement and supersedes all prior written
or oral and all contemporaneous oral agreements, understandings and
negotiations with respect to the subject matter hereof, including
that certain engagement letter (other than Sections 5, 10, 15 and
16 thereof), dated January 26, 2021, by and between the Company and
the Representative. This Agreement may not be amended or modified
unless in writing by all of the parties hereto, and no condition
herein (express or implied) may be waived unless waived in writing
by each party whom the condition is meant to benefit. The Section
headings herein are for the convenience of the parties only and
shall not affect the construction or interpretation of this
Agreement. The invalidity or unenforceability of any Section,
paragraph or provision of this Agreement shall not affect the
validity or enforceability of any other Section, paragraph or
provision hereof. If any Section, paragraph or provision of this
Agreement is for any reason determined to be invalid or
unenforceable, there shall be deemed to be made such minor changes
(and only such minor changes) as are necessary to make it valid and
enforceable.
[Signature
Page Follows]
-28-
Please sign and
return to the Company the enclosed duplicates of this letter
whereupon this letter will become a binding agreement between the
Company and the several Underwriters in accordance with its
terms.
Very
truly yours,
By /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Name ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Its Chief Executive Officer
Confirmed
as of the date first
above
mentioned, on behalf of
itself
and the several Underwriters
named
in Schedule I hereto.
▇▇▇▇▇-▇▇▇▇▇▇ Capital Group LLC
By /s/ ▇▇▇▇
▇▇▇▇▇▇▇▇
Name ▇▇▇▇
▇▇▇▇▇▇▇▇
Its Head of Investment
Banking
SCHEDULE I
Underwriters
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Underwriter
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Number
of Firm Shares
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▇▇▇▇▇-▇▇▇▇▇▇
Capital Group LLC
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1,714,000
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Total
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1,714,000
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SCHEDULE II
Certain Permitted Free Writing Prospectuses
None
SCHEDULE III
Pricing Information
Firm
Shares: 1,714,000
shares
Option
Shares: 257,100
shares
Price
to the public: $14.00 per
share
Price
to the Underwriters: $13.16
per share
SCHEDULE IV
List of Individuals and Entities Executing Lock-Up
Agreements
▇▇▇▇▇
▇. ▇▇▇▇▇▇▇▇
▇▇▇▇▇
▇. ▇▇▇▇▇
▇▇▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇
▇. ▇▇▇▇▇▇
▇▇▇▇▇
▇. Dalvey
▇▇▇▇▇▇▇
▇. ▇▇▇▇▇
▇▇▇ ▇.
▇▇▇▇▇▇
EXHIBIT A
Form of Common Stock Lock-Up Agreement
February
__, 2021
▇▇▇▇▇-▇▇▇▇▇▇
Capital Group LLC
As
Representative of the several
Underwriters
named in Schedule I to the Underwriting Agreement
c/o
▇▇▇▇▇-▇▇▇▇▇▇ Capital Group LLC
▇▇▇
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Ladies
and Gentlemen:
As an
inducement to ▇▇▇▇▇-▇▇▇▇▇▇ Capital Group LLC to execute an
underwriting agreement (the “Underwriting
Agreement”) in its capacity as representative for the
several underwriters named in Schedule I thereto (the “Representative”)
providing for a public offering (the “Offering”)
of common stock, par value $0.001 per share (the “Common
Stock”), or other securities, of Celcuity Inc., a
Delaware corporation, and any successor (by merger or
otherwise) thereto (the “Company”),
the undersigned hereby agrees that without, in each case, the prior
written consent of the Representative during the period specified
in the second succeeding paragraph (the “Lock-Up
Period”), the undersigned will not: (1) offer, pledge,
announce the intention to sell, sell, contract to sell, sell any
option or contract to purchase, purchase any option or contract to
sell, grant any option, right or warrant to purchase, make any
short sale or otherwise transfer or dispose of, directly or
indirectly, any shares of Common Stock or any securities
convertible into, exercisable or exchangeable for or that represent
the right to receive Common Stock (including without limitation,
Common Stock which may be deemed to be beneficially owned by the
undersigned in accordance with the rules and regulations of the
U.S. Securities and Exchange Commission (the “SEC”)
and securities which may be issued upon exercise of a stock option
or warrant) whether now owned or hereafter acquired (the
“Undersigned’s
Securities”); (2) enter into any swap or other
agreement that transfers, in whole or in part, any of the economic
consequences of ownership of the Undersigned’s Securities,
whether any such transaction described in clause (1) or (2) above
is to be settled by delivery of Common Stock or such other
securities, in cash or otherwise; (3) make any demand for or
exercise any right with respect to, the registration of any Common
Stock or any security convertible into or exercisable or
exchangeable for Common Stock; or (4) publicly disclose the
intention to do any of the foregoing.
The
undersigned agrees that the foregoing restrictions preclude the
undersigned from engaging in any hedging or other transaction which
is designed to or which reasonably could be expected to lead to or
result in a sale or disposition of the Undersigned’s
Securities even if such Securities would be disposed of by someone
other than the undersigned. Such prohibited hedging or other
transactions would include without limitation any short sale or any
purchase, sale or grant of any right (including without limitation
any put or call option) with respect to any of the
Undersigned’s Securities or with respect to any security that
includes, relates to or derives any significant part of its value
from such Securities.
A-1
The
Lock-Up Period will commence on the date of this Lock-Up Agreement
and continue until and include the date ninety (90) days after the
date of the final prospectus supplement used to sell the Common
Stock (or other securities) in the Offering pursuant to the
Underwriting Agreement.
Notwithstanding the
foregoing, without the written consent of the Representative, the
undersigned may transfer the Undersigned’s Securities (i) as
a bona fide gift or gifts,
(ii) to any trust for the direct or indirect benefit of the
undersigned or the immediate family of the undersigned, (iii) if
the undersigned is a corporation, partnership, limited liability
company, trust or other business entity, (1) to another
corporation, partnership, limited liability company, trust or other
business entity that is a direct or indirect affiliate (as defined
in Rule 405 promulgated under the Securities Act of 1933, as
amended) of the undersigned or (2) as distributions of shares of
Common Stock or any security convertible into or exercisable for
Common Stock to limited partners, limited liability company members
or stockholders of the undersigned, (iv) if the undersigned is a
trust, to the beneficiary of such trust, (v) by testate succession
or intestate succession or (vi) pursuant to the Underwriting
Agreement; provided, in the
case of clauses (i) through (v), that (x) such transfer shall not
involve a disposition for value, (y) the transferee agrees in
writing with the Representative to be bound by the terms of this
Lock-Up Agreement, and (z) no filing by any party under Section
16(a) of the Securities Exchange Act of 1934, as amended (the
“Exchange
Act”), shall be required or shall be made voluntarily
in connection with such transfer prior to the expiration of the
Lock-Up Period. For purposes of this Lock-Up Agreement,
“immediate family” shall mean any relationship by
blood, marriage or adoption, not more remote than first
cousin.
In
addition, the foregoing restrictions shall not apply to
(i) the exercise of stock options granted pursuant to the
Company’s equity incentive plans; provided that such restrictions shall
apply to any of the Undersigned’s Securities issued upon such
exercise, or (ii) the establishment of any contract,
instruction or plan (a “Plan”)
that satisfies all of the requirements of Rule 10b5-1(c)(1)(i)(B)
under the Exchange Act; provided that no sales of the
Undersigned’s Securities shall be made pursuant to such a
Plan prior to the expiration of the Lock-Up Period, and such a Plan
may only be established if no public announcement of the
establishment or existence thereof and no filing with the SEC or
other regulatory authority in respect thereof or transactions
thereunder or contemplated thereby, by the undersigned, the Company
or any other person, shall be required, and no such announcement or
filing is made voluntarily, by the undersigned, the Company or any
other person, prior to the expiration of the Lock-Up
Period.
In
furtherance of the foregoing, the Company and its transfer agent
and registrar are hereby authorized to decline to make any transfer
of shares of Common Stock if such transfer would constitute a
violation or breach of this Lock-Up Agreement.
The
undersigned hereby represents and warrants that the undersigned has
full power and authority to enter into this Lock-Up Agreement and
that upon request, the undersigned will execute any additional
documents necessary to ensure the validity or enforcement of this
Lock-Up Agreement. All authority herein conferred or agreed to be
conferred and any obligations of the undersigned shall be binding
upon the successors, assigns, heirs or personal representatives of
the undersigned.
A-2
The
undersigned understands that the undersigned shall be released from
all obligations under this Lock-Up Agreement if (i) the
Company notifies the Representative that it does not intend to
proceed with the Offering, (ii) the Underwriting Agreement
does not become effective, or the Underwriting Agreement (other
than the provisions thereof which survive termination) shall
terminate or be terminated prior to payment for and delivery of the
Common Stock (or other securities) to be sold thereunder, or
(iii) the Offering is not completed by March 31,
2021.
The
undersigned understands that the Representative is entering into
the Underwriting Agreement and proceeding with the Offering in
reliance upon this Lock-Up Agreement.
This
Lock-Up Agreement shall be governed by, and construed in accordance
with, the laws of the State of New York.
[The
remainder of this page has intentionally been left
blank]
A-3
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Very
truly yours,
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Printed
Name of Holder
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By:
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Signature
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Printed Name and Title of Person Signing (if signing as custodian, trustee or on behalf
of an entity)
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[Signature page to Lock-Up
Agreement]