UNDERWRITING AGREEMENT among AZURRX BIOPHARMA, INC. and WALLACHBETH Capital, LLC and NETWORK 1 FINANCIAL SECURITIES, INC.,
Exhibit
1.1
among
and
WALLACHBETH
Capital, LLC and NETWORK 1 FINANCIAL SECURITIES, INC.,
as
Representatives of the Several Underwriters
[●],
2016
WallachBeth
Capital, LLC
Network
1 Financial Securities, Inc.
As
Representatives of the several Underwriters named on Schedule 1
attached hereto
c/o
WallachBeth Capital, LLC
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c/o
Network 1 Financial Securities, Inc.
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Ladies
and Gentlemen:
The
undersigned, AzurRx BioPharma, Inc., a corporation formed under the
laws of the State of Delaware (collectively with its subsidiaries
and affiliates, including, without limitation, all entities
disclosed or described in the Registration Statement (as
hereinafter defined) and set forth on Schedule 4 attached hereto, as
being subsidiaries or affiliates of AzurRx BioPharma, Inc., the
“Company”), hereby confirms its agreement (this
“Agreement”) with the Underwriters named in Schedule I
hereto (the “Representatives” and such other
underwriters being collectively called the
“Underwriters” or, individually, an
“Underwriter”) as follows:
1. Purchase
and Sale of Shares.
1.1 Firm
Shares.
(i) On
the basis of the representations and warranties herein contained,
but subject to the terms and conditions herein set forth, the
Company agrees to issue and sell to the several Underwriters, an
aggregate of [●] shares (“Firm Shares”) of the
Company’s common stock, par value $0.0001 per share (the
“Common Stock”).
(ii) The
Underwriters, severally and not jointly, agree to purchase from the
Company the number of Firm Shares set forth opposite their
respective names on Schedule 1
attached hereto and made a part hereof
at a purchase price of $[●] per share ([91]% of the per Firm
Share offering price). The Firm Shares are to be offered initially
to the public at the offering price set forth on the cover page of
the Prospectus (as defined in Section 2.1.1
hereof).
1.1.2 Shares
Payment and Delivery.
(i) Delivery
and payment for the Firm Shares shall be made at 10:00 a.m.,
Eastern time, on the third (3rd)
Business Day following the effective date (the “Effective
Date”) of the Registration Statement (as defined in
Section 2.1.1 below) (or the fourth (4th) Business Day following
the Effective Date if the Registration Statement is declared
effective after 4:01 p.m., Eastern time) or at such earlier time as
shall be agreed upon by the Representatives and the Company, at the
offices of Cozen ▇’▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇
(“Representative Counsel”), or at such other place (or
remotely by facsimile or other electronic transmission) as shall be
agreed upon by the Representatives and the Company. The hour and
date of delivery and payment for the Firm Shares is called the
“Closing Date.”
(ii) Payment
for the Firm Shares shall be made on the Closing Date by wire
transfer in Federal (same day) funds, payable to the order of the
Company upon delivery of the certificates (in form and substance
satisfactory to the Underwriters) representing the Firm Shares (or
through the facilities of the Depository Trust Company
(“DTC”)) for the account of the Underwriters. The Firm
Shares shall be registered in such name or names and in such
authorized denominations as the Representatives may request in
writing at least two (2) full Business Days prior to the Closing
Date. The Company shall not be obligated to sell or deliver the
Firm Shares except upon tender of payment by the Representatives
for all of the Firm Shares. The term “Business Day”
means any day other than a Saturday, a Sunday or a legal holiday or
a day on which banking institutions are authorized or obligated by
law to close in New York, New York.
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1.2.1 Option
Shares. For the purposes of
covering any over-allotments in connection with the distribution
and sale of the Firm Shares, the Company hereby grants to the
Underwriters an option to purchase up to [●] additional
shares of Common Stock, representing fifteen percent (15%) of the
Firm Shares sold in the offering, from the Company (the
“Over-allotment Option”). Such [●] additional
shares of Common Stock, the net proceeds of which will be deposited
with the Company’s account, are hereinafter referred to as
“Option Shares.” The purchase price to be paid per
Option Share shall be equal to the price per Firm Share set forth
in Section 1.1.1 hereof. The Firm Shares and the Option Shares are
hereinafter referred to together as the “Public
Securities.” The offering and sale of the Public Securities
is hereinafter referred to as the
“Offering.”
1.2.2 Exercise
of Option. The Over-allotment
Option granted pursuant to Section 1.2.1
hereof may be exercised by the
Representatives as to all (at any time) or any part (from time to
time) of the Option Shares within 45 days after the Effective Date.
The Underwriters shall not be under any obligation to purchase any
Option Shares prior to the exercise of the Over-allotment Option.
The Over-allotment Option granted hereby may be exercised by the
giving of oral notice to the Company from the Representatives,
which must be confirmed in writing by overnight mail or facsimile
or other electronic transmission setting forth the number of Option
Shares to be purchased and the date and time for delivery of and
payment for the Option Shares (the “Option Closing
Date”), which shall not be later than five (5) full Business
Days after the date of the notice or such other time as shall be
agreed upon by the Company and the Representatives, at the offices
of Representative Counsel or at such other place (including
remotely by facsimile or other electronic transmission) as shall be
agreed upon by the Company and the Representatives. If such
delivery and payment for the Option Shares does not occur on the
Closing Date, the Option Closing Date will be as set forth in the
notice. Upon exercise of the Over-allotment Option with respect to
all or any portion of the Option Shares, subject to the terms and
conditions set forth herein, (i) the Company shall become obligated
to sell to the Underwriters the number of Option Shares specified
in such notice and (ii) each of the Underwriters, acting severally
and not jointly, shall purchase that portion of the total number of
Option Shares then being purchased as set forth in
Schedule
1 opposite the name of such
Underwriter.
1.2.3 Payment
and Delivery. Payment for the
Option Shares shall be made on the Option Closing Date by wire
transfer in Federal (same day) funds, payable to the order of the
Company upon delivery to you of certificates (in form and substance
satisfactory to the Underwriters) representing the Option Shares
(or through the facilities of DTC) for the account of the
Underwriters. The Option Shares shall be registered in such name or
names and in such authorized denominations as the Representatives
may request in writing at least two (2) full Business Days prior to
the Option Closing Date. The Company shall not be obligated to sell
or deliver the Option Shares except upon tender of payment by the
Representatives for applicable Option Shares.
1.3 Representatives’
Warrants.
1.3.1 Purchase
Warrants. The Company hereby
agrees to issue and sell to the Representatives (and/or their
designees) on the Closing Date option
(“Representatives’ Warrants”) for the purchase of
an aggregate of [●] shares of Common Stock, representing 5%
of the Firm Shares (excluding the Option Shares), for an aggregate
purchase price of $100.00. The Representatives’ Warrant
agreement, in the form attached hereto as Exhibit A
(the “Representatives’
Warrant Agreement”), shall be exercisable, in whole or in
part, commencing on a date which is one (1) year after the
Effective Date and expiring on the five-year anniversary of the
Effective Date at an initial exercise price per share of Common
Stock of $[●], which is equal to 120% of the initial public
offering price of the Firm Shares. The Representatives’
Warrant Agreement and the shares of Common Stock issuable upon
exercise thereof are hereinafter referred to together as the
“Representatives’ Securities.” The
Representatives understand and agree that there are significant
restrictions pursuant to FINRA Rule 5110 against transferring the
Representatives’ Warrant Agreement and the underlying shares
of Common Stock during the one hundred eighty (180) days after the
Effective Date and by its acceptance thereof shall agree that it
will not sell, transfer, assign, pledge or hypothecate the
Representatives’ Warrant Agreement, or any portion thereof,
or be the subject of any hedging, short sale, derivative, put or
call transaction that would result in the effective economic
disposition of such securities for a period of one hundred eighty
(180) days following the Effective Date to anyone other than (i) an
Underwriter or a selected dealer in connection with the Offering,
or (ii) a bona fide officer or partner of the Representatives or of
any such Underwriter or selected dealer; and only if any such
transferee agrees to the foregoing lock-up
restrictions.
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1.3.2 Delivery.
Delivery of the Representatives’ Warrant Agreement shall be
made on the Closing Date and shall be issued in the name or names
and in such authorized denominations as the Representatives may
request in writing.
2. Representations
and Warranties of the Company.
The Company represents and warrants to the Underwriters as of the
Applicable Time (as defined below), as of the Closing Date and as
of the Option Closing Date, if any with respect to AzurRx
BioPharma, Inc., and solely in reliance upon certificates of
officers of the entities listed on Schedule 4, with respect to such
entities as follows:
2.1 Filing
of Registration Statement.
2.1.1 Pursuant to the
Securities Act. The Company has
filed with the U.S. Securities and Exchange Commission (the
“Commission”) a registration statement, and an
amendment or amendments thereto, on Form S-1 (File No. 333-212511),
including any related prospectus or prospectuses, for the
registration of the Public Securities and the
Representatives’ Securities under the Securities Act of 1933,
as amended (the “Securities Act”), which registration
statement and amendment or amendments have been prepared by the
Company in all material respects in conformity with the
requirements of the Securities Act and the rules and regulations of
the Commission under the Securities Act (the “Securities Act
Regulations”) and will contain all material statements that
are required to be stated therein in accordance with the Securities
Act and the Securities Act Regulations. Except as the context may
otherwise require, such registration statement, as amended, on file
with the Commission at the time the registration statement became
effective (including the Preliminary Prospectus included in the
registration statement, financial statements, schedules, exhibits
and all other documents filed as a part thereof or incorporated
therein and all information deemed to be a part thereof as of the
Effective Date pursuant to paragraph (b) of Rule 430A of the
Securities Act Regulations (the “Rule 430A
Information”)), is referred to herein as the
“Registration Statement.” If the Company files any
registration statement pursuant to Rule 462(b) of the Securities
Act Regulations, then after such filing, the term
“Registration Statement” shall include such
registration statement filed pursuant to Rule 462(b). The
Registration Statement has been declared effective by the
Commission on the date hereof.
Each
prospectus used prior to the effectiveness of the Registration
Statement, and each prospectus that omitted the Rule 430A
Information that was used after such effectiveness and prior to the
execution and delivery of this Agreement, is herein called a
“Preliminary Prospectus.” The Preliminary Prospectus,
subject to completion, dated [●], 2016, that was included in
the Registration Statement immediately prior to the Applicable Time
is hereinafter called the “Pricing Prospectus.” The
final prospectus in the form first furnished to the Underwriters
for use in the Offering is hereinafter called the
“Prospectus.” Any reference to the “most recent
Preliminary Prospectus” shall be deemed to refer to the
latest Preliminary Prospectus included in the Registration
Statement.
“Applicable
Time” means [TIME] [a.m./p.m.], Eastern time, on the date of
this Agreement.
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“Issuer Free
Writing Prospectus” means any “issuer free writing
prospectus,” as defined in Rule 433 of the Securities Act
Regulations (“Rule 433”), including without limitation
any “free writing prospectus” (as defined in Rule 405
of the Securities Act Regulations) relating to the Public
Securities that is (i) required to be filed with the Commission by
the Company, (ii) a “road show that is a written
communication” within the meaning of Rule 433(d)(8)(i),
whether or not required to be filed with the Commission, or (iii)
exempt from filing with the Commission pursuant to Rule
433(d)(5)(i) because it contains a description of the Public
Securities or of the Offering that does not reflect the final
terms, in each case in the form filed or required to be filed with
the Commission or, if not required to be filed, in the form
retained in the Company’s records pursuant to Rule
433(g).
“Issuer
General Use Free Writing Prospectus” means any Issuer Free
Writing Prospectus that is intended for general distribution to
prospective investors (other than a “bona fide electronic road show,”
as defined in Rule 433 (the “Bona Fide Electronic Road
Show”)), as evidenced by its being specified in Schedule 2-B
hereto.
“Issuer
Limited Use Free Writing Prospectus” means any Issuer Free
Writing Prospectus that is not an Issuer General Use Free Writing
Prospectus.
“Pricing
Disclosure Package” means any Issuer General Use Free Writing
Prospectus issued at or prior to the Applicable Time, the Pricing
Prospectus and the information included on Schedule 2-A hereto, all
considered together.
2.1.2 Pursuant
to the Exchange Act. The
Company has filed with the Commission a Form 8-A (File Number
000-[●]) providing for the registration pursuant to Section
12(b) under the Securities Exchange Act of 1934, as amended (the
“Exchange Act”), of the shares of Common Stock. The
registration of the shares of Common Stock under the Exchange Act
has been declared effective by the Commission on or prior to the
date hereof. The Company has taken no action designed to, or likely
to have the effect of, terminating the registration of the shares
of Common Stock under the Exchange Act, nor has the Company
received any notification that the Commission is contemplating
terminating such registration.
2.2 Stock
Exchange Listing. The shares of
Common Stock have been approved for listing on the NASDAQ Capital
Market (the “Exchange”) subject only to official notice
of issuance, and the Company has taken no action designed to, or
likely to have the effect of, delisting the shares of Common Stock
from the Exchange, nor has the Company received any notification
that the Exchange is contemplating terminating such listing except
as described in the Registration Statement, the Pricing Disclosure
Package and the Prospectus.
2.3 No
Stop Orders, etc. Neither the
Commission nor, to the Company’s knowledge, any state
regulatory authority has issued any order preventing or suspending
the use of the Registration Statement, any Preliminary Prospectus
or the Prospectus or has instituted or, to the Company’s
knowledge, threatened to institute, any proceedings with respect to
such an order. The Company has complied with each request (if any)
from the Commission for additional information.
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2.4 Disclosures
in Registration Statement.
2.4.1 Compliance
with Securities Act and 10b-5 Representation.
(i) Each
of the Registration Statement and any post-effective amendment
thereto, at the time it became effective, complied in all material
respects with the requirements of the Securities Act and the
Securities Act Regulations. Each Preliminary Prospectus, including
the prospectus filed as part of the Registration Statement as
originally filed or as part of any amendment or supplement thereto,
and the Prospectus, at the time each was filed with the Commission,
complied in all material respects with the requirements of the
Securities Act and the Securities Act Regulations. Each Preliminary
Prospectus delivered to the Underwriters for use in connection with
this Offering and the Prospectus was or will be identical to the
electronically transmitted copies thereof filed with the Commission
pursuant to ▇▇▇▇▇, except to the extent permitted by Regulation
S-T.
(ii) Neither
the Registration Statement nor any amendment thereto, at its
effective time, as of the Applicable Time, at the Closing Date or
at any Option Closing Date (if any), 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, in light of the
circumstances under which they were made, not
misleading.
(iii) The
Pricing Disclosure Package, as of the Applicable Time, at the
Closing Date or at any Option Closing Date (if any), did not, does
not and will not include an untrue statement of a material fact or
omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which
they were made, not misleading; and each Issuer Limited Use Free
Writing Prospectus does not conflict in any material respect with
the information contained in the Registration Statement, any
Preliminary Prospectus, the Pricing Prospectus or the Prospectus,
and each such Issuer Limited Use Free Writing Prospectus, as
supplemented by and taken together with the Pricing Prospectus as
of the Applicable Time, did not include an untrue statement of a
material fact or omit to state a material fact necessary in order
to make the statements therein, in light of the circumstances under
which they were made, not misleading; provided, however, that this
representation and warranty shall not apply to statements made or
statements omitted in reliance upon and in conformity with written
information furnished to the Company with respect to the
Underwriters by the Representatives expressly for use in the
Registration Statement, the Pricing Prospectus or the Prospectus or
any amendment thereof or supplement thereto. The parties
acknowledge and agree that such information provided by or on
behalf of any Underwriter consists solely of the disclosure
contained in the “Underwriting” section of the
Prospectus (the “Underwriters’
Information”).
(iv) Neither
the Prospectus nor any amendment or supplement thereto (including
any prospectus wrapper), as of its issue date, at the time of any
filing with the Commission pursuant to Rule 424(b), at the Closing
Date or at any Option 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 the light of the circumstances under which
they were made, not misleading; provided, however, that this
representation and warranty shall not apply to the
Underwriters’ Information.
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2.4.2 Disclosure
of Agreements. The agreements
and documents described in the Registration Statement, the Pricing
Disclosure Package and the Prospectus conform in all material
respects to the descriptions thereof contained therein and there
are no agreements or other documents required by the Securities Act
and the Securities Act Regulations to be described in the
Registration Statement, the Pricing Disclosure Package and the
Prospectus or to be filed with the Commission as exhibits to the
Registration Statement, that have not been so described or filed.
Each agreement or other instrument (however characterized or
described) to which the Company is a party or by which it is or may
be bound or affected and (i) that is referred to in the
Registration Statement, the Pricing Disclosure Package and the
Prospectus, or (ii) is material to the Company’s business,
has been duly authorized and validly executed by the Company, is in
full force and effect in all material respects and is enforceable
against the Company and, to the Company’s knowledge, the
other parties thereto, in accordance with its terms, except (x) as
such enforceability may be limited by bankruptcy, insolvency,
reorganization or similar laws affecting creditors’ rights
generally, (y) as enforceability of any indemnification or
contribution provision may be limited under the federal and state
securities laws, and (z) that the remedy of specific performance
and injunctive and other forms of equitable relief may be subject
to the equitable defenses and to the discretion of the court before
which any proceeding therefor may be brought. Except as disclosed
in the Registration Statement, the Pricing Disclosure Package and
the Prospectus, none of such agreements or instruments has been
assigned by the Company, and neither the Company nor, to the
Company’s knowledge, any other party is in default thereunder
and, to the Company’s knowledge, no event has occurred that,
with the lapse of time or the giving of notice, or both, would
constitute a default thereunder except for such defaults that would
not reasonably be expected to result in a Material Adverse Change
(as defined in Section 2.5.1 below). To the best of the
Company’s knowledge, performance by the Company of the
material provisions of such agreements or instruments will not
result in a violation of any existing applicable law, rule,
regulation, judgment, order or decree of any governmental agency or
court, domestic or foreign, having jurisdiction over the Company or
any of its assets or businesses (each, a “Governmental
Entity”), including, without limitation, those relating to
environmental laws and regulations, except for such violations that
would not reasonably be expected to result in a Material Adverse
Change.
2.4.3 Prior
Securities Transactions. No
securities of the Company have been sold by the Company or by or on
behalf of, or for the benefit of, any person or persons
controlling, controlled by or under common control with the
Company, except as disclosed in the Registration Statement, the
Pricing Disclosure Package and the Preliminary
Prospectus.
2.4.4 Regulations.
The disclosures in the Registration Statement, the Pricing
Disclosure Package and the Prospectus concerning the effects of
federal, state, local and all foreign regulation on the Offering
and the Company’s business as currently contemplated are
correct in all material respects and no other such regulations are
required to be disclosed in the Registration Statement, the Pricing
Disclosure Package and the Prospectus which are not so
disclosed.
2.5 Changes
After Dates in Registration Statement.
2.5.1 No
Material Adverse Change. Since
the respective dates as of which information is given in the
Registration Statement, the Pricing Disclosure Package and the
Prospectus, except as otherwise specifically stated therein: (i)
there has been no material adverse change in the financial position
or results of operations of the Company, nor to the Company’s
knowledge, any change or development that, singularly or in the
aggregate, would involve a material adverse change, in or affecting
the condition (financial or otherwise), results of operations,
business, assets or prospects of the Company (a “Material
Adverse Change”); and (ii) there have been no material
transactions entered into by the Company not in the ordinary course
of business, other than as contemplated pursuant to this
Agreement.
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2.5.2 Recent
Securities Transactions, etc.
Subsequent to the respective dates as of which information is given
in the Registration Statement, the Pricing Disclosure Package and
the Prospectus, and except as may otherwise be indicated or
contemplated herein or disclosed in the Registration Statement, the
Pricing Disclosure Package and the Prospectus, the Company has not:
(i) issued any securities or incurred any liability or obligation,
direct or contingent, for borrowed money; or (ii) declared or paid
any dividend or made any other distribution on or in respect to its
capital stock.
2.6 Independent
Accountants. To the knowledge
of the Company, WeiserMazars, LLP (the “Auditor”),
whose report is filed with the Commission as part of the
Registration Statement, the Pricing Disclosure Package and the
Prospectus, is an independent registered public accounting firm as
required by the Securities Act and the Securities Act Regulations
and the Public Company Accounting Oversight Board. Except as
disclosed in the Registration Statement, the Pricing Disclosure
Package and the Prospectus, the Auditor has not, during the periods
covered by the financial statements included in the Registration
Statement, the Pricing Disclosure Package and the Prospectus,
provided to the Company any non-audit services, as such term is
used in Section 10A(g) of the Exchange Act.
2.7 Financial
Statements, etc. The financial
statements, including the notes thereto and supporting schedules,
if any, included in the Registration Statement, the Pricing
Disclosure Package and the Prospectus, fairly in all material
respects present the financial position and the results of
operations of the Company at the dates and for the periods to which
they apply; and such financial statements have been prepared in
conformity with U.S. generally accepted accounting principles
(“GAAP”), consistently applied throughout the periods
involved (provided that unaudited interim financial statements are
subject to year-end audit adjustments that are not expected to be
material in the aggregate and do not contain all footnotes required
by GAAP); and any supporting schedules included in the Registration
Statement present fairly in all material respects the information
required to be stated therein. Except as included therein, no
historical or pro forma financial statements are required to be
included in the Registration Statement, the Pricing Disclosure
Package or the Prospectus under the Securities Act or the
Securities Act Regulations. The pro forma and pro forma as adjusted
financial information and the related notes, if any, included in
the Registration Statement, the Pricing Disclosure Package and the
Prospectus have been properly compiled and prepared in accordance
with the applicable requirements of the Securities Act and the
Securities Act Regulations and present fairly in all material
respects the information shown therein, and the assumptions used in
the preparation thereof are reasonable and the adjustments used
therein are appropriate to give effect to the transactions and
circumstances referred to therein. All disclosures contained in the
Registration Statement, the Pricing Disclosure Package or the
Prospectus regarding “non-GAAP financial measures” (as
such term is defined by the rules and regulations of the
Commission), if any, comply with Regulation G of the Exchange Act
and Item 10 of Regulation S-K of the Securities Act, to the extent
applicable. Each of the Registration Statement, the Pricing
Disclosure Package and the Prospectus discloses all material
off-balance sheet transactions, arrangements, obligations
(including contingent obligations), and other relationships of the
Company with unconsolidated entities or other persons that may have
a material current or future effect on the Company’s
financial condition, changes in financial condition, results of
operations, liquidity, capital expenditures, capital resources, or
significant components of revenues or expenses. Except as disclosed
in the Registration Statement, the Pricing Disclosure Package and
the Prospectus, (a) neither the Company nor any of its direct and
indirect subsidiaries, including each entity disclosed or described
in the Registration Statement, the Pricing Disclosure Package and
the Prospectus as being a subsidiary of the Company (each, a
“Subsidiary” and, collectively, the
“Subsidiaries”), has incurred any material liabilities
or obligations, direct or contingent, or entered into any material
transactions other than in the ordinary course of business, (b) the
Company has not declared or paid any dividends or made any
distribution of any kind with respect to its capital stock, (c)
there has not been any change in the capital stock of the Company
or any of its Subsidiaries, or, other than in the course of
business, any grants under any stock compensation plan, and (d)
there has not been any material adverse change in the
Company’s long-term or short-term debt.
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2.8 Authorized
Capital; Options, etc. The
Company had, at the date or dates indicated in the Registration
Statement, the Pricing Disclosure Package and the Prospectus, the
duly authorized, issued and outstanding capitalization as set forth
therein. Based on the assumptions stated in the Registration
Statement, the Pricing Disclosure Package and the Prospectus, the
Company will have on the Closing Date the adjusted stock
capitalization set forth therein. Except as set forth in, or
contemplated by, the Registration Statement, the Pricing Disclosure
Package and the Prospectus, on the Effective Date, as of the
Applicable Time and on the Closing Date and any Option Closing
Date, there will be no stock options, warrants, or other rights to
purchase or otherwise acquire any authorized, but unissued shares
of Common Stock of the Company or any security convertible or
exercisable into shares of Common Stock of the Company, or any
contracts or commitments to issue or sell shares of Common Stock or
any such options, warrants, rights or convertible
securities.
2.9 Valid
Issuance of Securities, etc.
2.9.1 Outstanding
Securities. All issued and
outstanding securities of the Company issued prior to the
transactions contemplated by this Agreement have been duly
authorized and validly issued and are fully paid and
non-assessable; the holders thereof have no rights of rescission
with respect thereto, and are not subject to personal liability by
reason of being such holders; and none of such securities were
issued in violation of the preemptive rights of any holders of any
security of the Company or similar contractual rights granted by
the Company. The authorized shares of Common Stock conform in all
material respects to all statements relating thereto contained in
the Registration Statement, the Pricing Disclosure Package and the
Prospectus. The offers and sales of the outstanding shares of
Common Stock were at all relevant times either registered under the
Securities Act and the applicable state securities or “blue
sky” laws or, based in part on the representations and
warranties of the purchasers of such Shares, exempt from such
registration requirements.
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2.9.2 Securities
Sold Pursuant to this Agreement. The Public Securities and Representatives’
Securities have been duly authorized for issuance and sale and,
when issued and paid for, will be validly issued, fully paid and
non-assessable; the holders thereof are not and will not be subject
to personal liability by reason of being such holders; the Public
Securities and Representatives’ Securities are not and will
not be subject to the preemptive rights of any holders of any
security of the Company or similar contractual rights granted by
the Company; and all corporate action required to be taken for the
authorization, issuance and sale of the Public Securities and
Representatives’ Securities has been duly and validly taken.
The Public Securities and Representatives’ Securities conform
in all material respects to all statements with respect thereto
contained in the Registration Statement, the Pricing Disclosure
Package and the Prospectus. All corporate action required to be
taken for the authorization, issuance and sale of the
Representatives’ Warrant Agreement has been duly and validly
taken; the shares of Common Stock issuable upon exercise of the
Representatives’ Warrant have been duly authorized and
reserved for issuance by all necessary corporate action on the part
of the Company and when paid for and issued in accordance with the
Representatives’ Warrant and the Representatives’
Warrant Agreement, such shares of Common Stock will be validly
issued, fully paid and non-assessable; the holders thereof are not
and will not be subject to personal liability by reason of being
such holders; and such shares of Common Stock are not and will not
be subject to the preemptive rights of any holders of any security
of the Company or similar contractual rights granted by the
Company.
2.10 Registration
Rights of Third Parties. Except
as set forth in the Registration Statement, the Pricing Disclosure
Package and the Prospectus, no holders of any securities of the
Company or any rights exercisable for or convertible or
exchangeable into securities of the Company have the right to
require the Company to register any such securities of the Company
under the Securities Act or to include any such securities in a
registration statement to be filed by the
Company.
2.11 Validity
and Binding Effect of Agreements. This Agreement and the Representatives’
Warrant Agreement have been duly and validly authorized by the
Company, and, when executed and delivered, will constitute, the
valid and binding agreements of the Company, enforceable against
the Company in accordance with their respective terms, except: (i)
as such enforceability may be limited by bankruptcy, insolvency,
reorganization or similar laws affecting creditors’ rights
generally; (ii) as enforceability of any indemnification or
contribution provision may be limited under the federal and state
securities laws; and (iii) that the remedy of specific performance
and injunctive and other forms of equitable relief may be subject
to the equitable defenses and to the discretion of the court before
which any proceeding therefor may be brought.
2.12 No
Conflicts, etc. The execution,
delivery and performance by the Company of this Agreement, the
Representatives’ Warrant Agreement and all ancillary
documents, the consummation by the Company of the transactions
herein and therein contemplated and the compliance by the Company
with the terms hereof and thereof do not and will not, with or
without the giving of notice or the lapse of time or both: (i)
result in a material breach of, or conflict in any material respect
with any of the terms and provisions of, or constitute a material
default under, or result in the creation, modification, termination
or imposition of any material lien, charge or encumbrance upon any
property or assets of the Company pursuant to the terms of any
agreement or instrument to which the Company is a party; (ii)
result in any violation of the provisions of the Company’s
Certificate of Incorporation (as the same may be amended or
restated from time to time, the “Charter”) or the
by-laws of the Company; or (iii) violate any existing applicable
law, rule, regulation, judgment, order or decree of any
Governmental Entity as of the date hereof; except in the cases of
clause (iii) above, for such breaches, conflicts or defaults that
would not reasonably be expected to result in a Material Adverse
Change.
-9-
2.13 No
Defaults; Violations. No
material default exists in the due performance and observance of
any term, covenant or condition of any material license, contract,
indenture, mortgage, deed of trust, note, loan or credit agreement,
or any other agreement or instrument evidencing an obligation for
borrowed money, or any other material agreement or instrument to
which the Company is a party or by which the Company may be bound
or to which any of the properties or assets of the Company is
subject. The Company is not in violation of any term or provision
of its Charter or by-laws. The Company is not in violation of any
franchise, license, permit, applicable law, rule, regulation,
judgment or decree of any Governmental Entity, except for such
violations that would not reasonably be expected to result in a
Material Adverse Change.
2.14 Corporate
Power; Licenses; Consents.
2.14.1 Conduct
of Business. Except as
described in the Registration Statement, the Pricing Disclosure
Package and the Prospectus, the Company has all requisite corporate
power and authority, and has all necessary authorizations,
approvals, orders, licenses, certificates and permits
(“Permits”) of and from any Governmental Entity that it
needs as of the date hereof to conduct its business purpose as
described in the Registration Statement, the Pricing Disclosure
Package and the Prospectus, except for such Permits, the absence of
which would not reasonably be expected to have a Material Adverse
Change.
2.14.2 Transactions
Contemplated Herein. The
Company has all corporate power and authority to enter into this
Agreement and to carry out the provisions and conditions hereof,
and all consents, authorizations, approvals and orders required in
connection therewith have been obtained. No consent, authorization
or order of, and no filing with, any court, government agency or
other body is required for the valid issuance, sale and delivery of
the Public Securities and the consummation of the transactions and
agreements contemplated by this Agreement and the
Representatives’ Warrant Agreement and as contemplated by the
Registration Statement, the Pricing Disclosure Package and the
Prospectus, except with respect to applicable federal and state
securities laws and the rules and regulations of the Financial
Industry Regulatory Authority, Inc.
(“FINRA”).
2.15 D&O
Questionnaires. To the
Company’s knowledge, all information contained in the
questionnaires (the “Questionnaires”) completed by each
of the Company’s directors and officers immediately prior to
the Offering (the “Insiders”) as supplemented by all
information concerning the Company’s directors, officers and
principal shareholders as described in the Registration Statement,
the Pricing Disclosure Package and the Prospectus, as well as in
the Lock-Up Agreement (as defined in Section 2.24
below), provided to the Underwriters,
is true and correct in all material respects and the Company has
not become aware of any information which would cause the
information disclosed in the Questionnaires to become materially
inaccurate or incorrect in any material
respect.
-10-
2.16 Litigation;
Governmental Proceedings. There
is no action, suit, proceeding, inquiry, arbitration,
investigation, litigation or governmental proceeding pending or, to
the Company’s knowledge, threatened against, or involving the
Company or, to the Company’s knowledge, any executive officer
or director which has not been disclosed in the Registration
Statement, the Pricing Disclosure Package and the Prospectus or in
connection with the Company’s listing application for the
listing of the Public Securities on the Exchange, which
individually or in the aggregate, if determined adversely to the
Company would reasonably be expected to have a Material Adverse
Change.
2.17 Good
Standing. The Company has been
duly organized and is validly existing as a corporation and is in
good standing under the laws of the State of Delaware as of the
date hereof, and is duly qualified to do business and is in good
standing in each other jurisdiction in which its ownership or lease
of property or the conduct of business requires such qualification,
except where the failure to qualify, singularly or in the
aggregate, would not have or reasonably be expected to result in a
Material Adverse Change.
2.18 Insurance.
The Company carries or is entitled to the benefits of insurance,
with reputable insurers, in such amounts and covering such risks
which the Company believes are adequate, and all such insurance is
in full force and effect. The Company has no reason to believe that
it will not be able (i) to renew its existing insurance coverage as
and when such policies expire or (ii) to obtain comparable coverage
from similar institutions as may be necessary or appropriate to
conduct its business as now conducted and at a cost that would not
reasonably be expected to result in a Material Adverse
Change.
2.19 Transactions
Affecting Disclosure to FINRA.
2.19.1 Finder’s
Fees. Except as described in
the Registration Statement, the Pricing Disclosure Package and the
Prospectus, there are no claims, payments, arrangements, agreements
or understandings relating to the payment of a finder’s,
consulting or origination fee by the Company or any Insider with
respect to the sale of the Public Securities hereunder or any other
arrangements, agreements or understandings of the Company or, to
the Company’s knowledge, any of its shareholders that may
affect the Underwriters’ compensation, as determined by
FINRA.
2.19.2 Payments
Within Twelve (12) Months.
Except as described in the Registration Statement, the Pricing
Disclosure Package and the Prospectus, the Company has not made any
direct or indirect payments (in cash, securities or otherwise) in
connection with the Offering to: (i) any person, as a
finder’s fee, consulting fee or otherwise, in consideration
of such person raising capital for the Company or introducing to
the Company persons who raised or provided capital to the Company;
(ii) any FINRA member; or (iii) any person or entity that has any
direct or indirect affiliation or association with any FINRA
member, within the twelve (12) months prior to the Effective Date,
other than the payment to the Underwriters as provided
hereunder.
-11-
2.19.3 Use
of Proceeds. None of the net
proceeds of the Offering will be paid by the Company to any
participating FINRA member or its affiliates, except as
specifically authorized herein.
2.19.4 FINRA
Affiliation. There is no (i)
officer or director of the Company, (ii) beneficial owner of 5% or
more of any class of the Company’s securities or (iii)
beneficial owner of the Company’s unregistered equity
securities which were acquired during the 180-day period
immediately preceding the filing of the Registration Statement that
is an affiliate or associated person of a FINRA member
participating in the Offering (as determined in accordance with the
rules and regulations of FINRA).
2.19.5 Information.
All information provided by the Company in its FINRA questionnaire
to Representative Counsel specifically for use by Representative
Counsel in connection with its Public Offering System filings (and
related disclosure) with FINRA is true, correct and complete in all
material respects.
2.20 Foreign
Corrupt Practices Act. None of
the Company and its Subsidiaries or, to the Company’s
knowledge, any director, officer, agent, employee or affiliate of
the Company and its Subsidiaries or any other person acting on
behalf of the Company and its Subsidiaries, has, directly or
indirectly, given or agreed to give any money, gift or similar
benefit (other than legal price concessions to customers in the
ordinary course of business) to any customer, supplier, employee or
agent of a customer or supplier, or official or employee of any
Governmental Entity or any political party or candidate for office
(domestic or foreign) or other person who was, is, or may be in a
position to help or hinder the business of the Company (or assist
it in connection with any actual or proposed transaction) that (i)
might subject the Company to any damage or penalty in any civil,
criminal or governmental litigation or proceeding, (ii) if not
given in the past, might have caused a Material Adverse Change or
(iii) if not continued in the future, might adversely affect the
assets, business, operations or prospects of the Company. The
Company has taken reasonable steps to ensure that its accounting
controls and procedures are sufficient to cause the Company to
comply in all material respects with the Foreign Corrupt Practices
Act of 1977, as amended.
2.21 Compliance
with OFAC. None of the Company
and its Subsidiaries or, to the Company’s knowledge, any
director, officer, agent, employee or affiliate of the Company and
its Subsidiaries or any other person acting on behalf of the
Company and its Subsidiaries, is currently subject to any U.S.
sanctions administered by the Office of Foreign Assets Control of
the U.S. Department of the Treasury (“OFAC”), and the
Company will not knowingly, directly or indirectly, use the
proceeds of the Offering hereunder, or lend, contribute or
otherwise make available such proceeds to any Subsidiary, joint
venture partner or other person or entity, for the purpose of
financing the activities of any person currently subject to any
U.S. sanctions administered by OFAC.
-12-
2.22 Money
Laundering Laws. The operations
of the Company and its Subsidiaries are and have been conducted at
all times in compliance in all material respects with applicable
financial recordkeeping and reporting requirements of the Currency
and Foreign Transactions Reporting Act of 1970, as amended, the
money laundering statutes of all jurisdictions, the rules and
regulations thereunder and any related or similar rules,
regulations or guidelines, issued, administered or enforced by any
Governmental Entity (collectively, the “Money Laundering
Laws”); and no action, suit or proceeding by or before any
Governmental Entity involving the Company with respect to the Money
Laundering Laws is pending or, to the best knowledge of the
Company, threatened.
2.23 Officers’
Certificate. Any certificate
signed by any duly authorized officer of the Company and delivered
to you or to Representative Counsel shall be deemed a
representation and warranty by the Company to the Underwriters as
to the matters covered thereby.
2.24 Lock-Up
Agreements. Schedule 3 hereto
contains a complete and accurate list of the Company’s
officers, directors and each owner of at least 5% of the
Company’s outstanding shares of Common Stock (or securities
convertible or exercisable into shares of Common Stock)
(collectively, the “Lock-Up Parties”). The Company has
caused each of the Lock-Up Parties to deliver to the
Representatives an executed Lock-Up Agreement, in the form attached
hereto as Exhibit B
(the “Lock-Up Agreement”),
prior to the execution of this Agreement.
2.25 Subsidiaries.
All direct and indirect Subsidiaries of the Company are duly
organized and in good standing under the laws of the place of
organization or incorporation, and each Subsidiary is in good
standing in each jurisdiction in which its ownership or lease of
property or the conduct of business requires such qualification,
except where the failure to qualify would not have a Material
Adverse Change. The Company’s ownership and control of each
Subsidiary is as described in the Registration Statement, the
Pricing Disclosure Package and the Prospectus.
2.26 Related
Party Transactions. There are
no business relationships or related party transactions involving
the Company or any other person required to be described in the
Registration Statement, the Pricing Disclosure Package and the
Prospectus that have not been described as
required.
2.27 Board
of Directors. The Board of
Directors of the Company is comprised of the persons set forth
under the heading of the Pricing Prospectus and the Prospectus
captioned “Management.” The qualifications of the
persons serving as board members and the overall composition of the
board comply with the Exchange Act, the Exchange Act Regulations,
the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002 and the rules promulgated thereunder
(the “▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act”) applicable to the Company
and the listing rules of the Exchange. At least one member of the
Audit Committee of the Board of Directors of the Company qualifies
as an “audit committee financial expert,” as such term
is defined under Regulation S-K and the listing rules of the
Exchange. In addition, at least a majority of the persons serving
on the Board of Directors qualify as “independent,” as
defined under the listing rules of the
Exchange.
2.28 ▇▇▇▇▇▇▇▇-▇▇▇▇▇
Compliance.
2.28.1 Disclosure
Controls. The Company has
developed and currently maintains disclosure controls and
procedures that comply in all material respects with Rule 13a-15 or
15d-15 under the Exchange Act Regulations, and such controls and
procedures are effective to ensure that all material information
concerning the Company will be made known on a timely basis to the
individuals responsible for the preparation of the Company’s
Exchange Act filings and other public disclosure
documents.
-13-
2.28.2 Compliance.
The Company is, or at the Applicable Time and on the Closing Date
will be, in material compliance with the provisions of the
▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act applicable to it, and has implemented or will
implement such programs and taken reasonable steps to ensure the
Company’s future compliance (not later than the relevant
statutory and regulatory deadlines therefor) with all of the
material provisions of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act.
2.29 Accounting
Controls. The Company and its
Subsidiaries maintain systems of “internal control over
financial reporting” (as defined under Rules 13a-15 and
15d-15 under the Exchange Act Regulations) that comply in all
material respects with the requirements of the Exchange Act and
have been designed by, or under the supervision of, their
respective principal executive and principal financial officers, or
persons performing similar functions, to provide reasonable
assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in
accordance with GAAP, including, but not limited to, internal
accounting controls sufficient to provide reasonable assurance that
(i) transactions are executed in accordance with management’s
general or specific authorizations; (ii) transactions are recorded
as necessary to permit preparation of financial statements in
conformity with GAAP and to maintain asset accountability; (iii)
access to assets is permitted only in accordance with
management’s general or specific authorization; and (iv) the
recorded accountability for assets is compared with the existing
assets at reasonable intervals and appropriate action is taken with
respect to any differences. Except as disclosed in the Registration
Statement, the Pricing Disclosure Package and the Prospectus, the
Company is not aware of any material weaknesses in its internal
controls. The Company’s auditors and the Audit Committee of
the Board of Directors of the Company have been advised of: (i) all
significant deficiencies and material weaknesses in the design or
operation of internal controls over financial reporting which are
known to the Company’s management and that have adversely
affected or are reasonably likely to adversely affect the
Company’ ability to record, process, summarize and report
financial information; and (ii) any fraud known to the
Company’s management, whether or not material, that involves
management or other employees who have a significant role in the
Company’s internal controls over financial
reporting.
2.30 No
Investment Company Status. The
Company is not and, after giving effect to the Offering and the
application of the proceeds thereof as described in the
Registration Statement, the Pricing Disclosure Package and the
Prospectus, will not be, required to register as an
“investment company,” as defined in the Investment
Company Act of 1940, as amended.
2.31 No
Labor Disputes. No labor
dispute with the employees of the Company or any of its
Subsidiaries exists or, to the knowledge of the Company, is
imminent.
-14-
2.32 Intellectual
Property Rights. The Company
and each of its Subsidiaries owns or possesses or has valid rights
to use all patents, patent applications, trademarks, service marks,
trade names, trademark registrations, service ▇▇▇▇ registrations,
copyrights, licenses, inventions, trade secrets and similar rights
(“Intellectual Property Rights”) necessary for the
conduct of the business of the Company and its Subsidiaries as
currently carried on and as described in the Registration
Statement, the Pricing Disclosure Package and the Prospectus. To
the knowledge of the Company, no action or use by the Company or
any of its Subsidiaries necessary for the conduct of its business
as currently carried on and as described in the Registration
Statement and the Prospectus will involve or give rise to any
infringement of, or license or similar fees for, any Intellectual
Property Rights of others. Neither the Company nor any of its
Subsidiaries has received any notice alleging any such
infringement, fee or conflict with asserted Intellectual Property
Rights of others. Except as would not reasonably be expected to
result, individually or in the aggregate, in a Material Adverse
Change (A) to the knowledge of the Company, there is no
infringement, misappropriation or violation by third parties of any
of the Intellectual Property Rights owned by the Company; (B) there
is no pending or, to the knowledge of the Company, threatened
action, suit, proceeding or claim by others challenging the rights
of the Company in or to any such Intellectual Property Rights, and
the Company is unaware of any facts which would form a reasonable
basis for any such claim, that would, individually or in the
aggregate, together with any other claims referred to in this
Section 2.32,
reasonably be expected to result in a Material Adverse Change; (C)
the Intellectual Property Rights owned by the Company and, to the
knowledge of the Company, the Intellectual Property Rights licensed
to the Company have not been adjudged by a court of competent
jurisdiction invalid or unenforceable, in whole or in part, and
there is no pending or, to the Company’s knowledge,
threatened action, suit, proceeding or claim by others challenging
the validity or scope of any such Intellectual Property Rights, and
the Company is unaware of any facts which would form a reasonable
basis for any such claim that would, individually or in the
aggregate, together with any other claims referred to in this
Section 2.32,
reasonably be expected to result in a Material Adverse Change; (D)
there is no pending or, to the Company’s knowledge,
threatened action, suit, proceeding or claim by others that the
Company infringes, misappropriates or otherwise violates any
Intellectual Property Rights or other proprietary rights of others,
the Company has not received any written notice of such claim and
the Company is unaware of any other facts which would form a
reasonable basis for any such claim that would, individually or in
the aggregate, together with any other claims referred to in this
Section 2.32,
reasonably be expected to result in a Material Adverse Change; and
(E) to the Company’s knowledge, no employee of the Company is
in or has ever been in violation in any material respect of any
term of any employment contract, patent disclosure agreement,
invention assignment agreement, non-competition agreement,
non-solicitation agreement, nondisclosure agreement or any
restrictive covenant to or with a former employer where the basis
of such violation relates to such employee’s employment with
the Company, or actions undertaken by the employee while employed
with the Company and could reasonably be expected to result,
individually or in the aggregate, in a Material Adverse Change. To
the Company’s knowledge, all material technical information
developed by and belonging to the Company which has not been
patented has been kept confidential. The Company is not a party to
or bound by any options, licenses or agreements with respect to the
Intellectual Property Rights of any other person or entity that are
required to be set forth in the Registration Statement, the Pricing
Disclosure Package and the Prospectus and are not described
therein. The Registration Statement, the Pricing Disclosure Package
and the Prospectus contain in all material respects the same
description of the matters set forth in the preceding sentence.
None of the technology employed by the Company has been obtained or
is knowingly being used by the Company in material violation of any
contractual obligation binding on the Company or, to the
Company’s knowledge, any of its officers, directors or
employees, or otherwise in material violation of the rights of any
persons.
2.33 Taxes.
Each of the Company and its Subsidiaries has filed all material
returns (as hereinafter defined) required to be filed with taxing
authorities prior to the date hereof or has duly obtained
extensions of time for the filing thereof. Each of the Company and
its Subsidiaries has paid all taxes (as hereinafter defined) shown
as due on such returns that were filed and has paid all taxes
imposed on or assessed against the Company or such respective
Subsidiary. The provisions for taxes payable, if any, shown on the
financial statements filed with or as part of the Registration
Statement are sufficient for all accrued and unpaid taxes, whether
or not disputed, and for all periods to and including the dates of
such consolidated financial statements. Except as disclosed in
writing to the Underwriters, (i) no issues have been raised (and
are currently pending) by any taxing authority in connection with
any of the returns or taxes asserted as due from the Company or its
Subsidiaries, and (ii) no waivers of statutes of limitation with
respect to the returns or collection of taxes have been given by or
requested from the Company or its Subsidiaries. The term
“taxes” means all federal, state, local, foreign and
other net income, gross income, gross receipts, sales, use, ad
valorem, transfer, franchise, profits, license, lease, service,
service use, withholding, payroll, employment, excise, severance,
stamp, occupation, premium, property, windfall profits, customs,
duties or other taxes, fees, assessments or charges of any kind
whatever, together with any interest and any penalties, additions
to tax or additional amounts with respect thereto. The term
“returns” means all returns, declarations, reports,
statements and other documents required to be filed in respect to
taxes.
-15-
2.34 ERISA
Compliance. The Company and any
“employee benefit plan” (as defined under the Employee
Retirement Income Security Act of 1974, as amended, and the
regulations and published interpretations thereunder (collectively,
“ERISA”)) established or maintained by the Company or
its “ERISA Affiliates” (as defined below) are in
compliance in all material respects with ERISA. “ERISA
Affiliate” means, with respect to the Company, any member of
any group of organizations described in Sections 414(b),(c),(m) or
(o) of the Internal Revenue Code of 1986, as amended, and the
regulations and published interpretations thereunder (the
“Code”) of which the Company is a member. No
“reportable event” (as defined under ERISA) has
occurred or is reasonably expected to occur with respect to any
“employee benefit plan” established or maintained by
the Company or any of its ERISA Affiliates. No “employee
benefit plan” established or maintained by the Company or any
of its ERISA Affiliates, if such “employee benefit
plan” were terminated, would have any “amount of
unfunded benefit liabilities” (as defined under ERISA).
Neither the Company nor any of its ERISA Affiliates has incurred or
reasonably expects to incur any material liability under (i) Title
IV of ERISA with respect to termination of, or withdrawal from, any
“employee benefit plan” or (ii) Sections 412, 4971,
4975 or 4980B of the Code. Each “employee benefit plan”
established or maintained by the Company or any of its ERISA
Affiliates that is intended to be qualified under Section 401(a) of
the Code is so qualified and, to the knowledge of the Company,
nothing has occurred, whether by action or failure to act, which
would cause the loss of such qualification.
2.35 Compliance
with Laws. The Company: (A) is
and at all times has been in compliance with all statutes, rules,
or regulations applicable to the ownership, testing, development,
manufacture, packaging, processing, use, distribution, marketing,
labeling, promotion, sale, offer for sale, storage, import, export
or disposal of any product manufactured or distributed by the
Company (“Applicable Laws”), except as could not,
individually or in the aggregate, reasonably be expected to have a
Material Adverse Change; (B) has not received any warning letter,
untitled letter or other correspondence or notice from any other
Governmental Entity alleging or asserting noncompliance with any
Applicable Laws or any licenses, certificates, approvals,
clearances, authorizations, permits and supplements or amendments
thereto required by any such Applicable Laws
(“Authorizations”); (C) possesses all material
Authorizations and such material Authorizations are valid and in
full force and effect and are not in material violation of any term
of any such Authorizations; (D) has not received notice of any
claim, action, suit, proceeding, hearing, enforcement,
investigation, arbitration or other action from any Governmental
Entity or third party alleging that any product operation or
activity is in violation of any Applicable Laws or Authorizations
and has no knowledge that any such Governmental Entity or third
party is considering any such claim, litigation, arbitration,
action, suit, investigation or proceeding that if brought would
result in a Material Adverse Change; (E) has not received notice
that any Governmental Entity has taken, is taking or intends to
take action to limit, suspend, modify or revoke any Authorizations
and has no knowledge that any such Governmental Entity is
considering such action; (F) has filed, obtained, maintained or
submitted all material reports, documents, forms, notices,
applications and records, as required by any Applicable Laws or
Authorizations and that all such reports, documents, forms,
notices, applications, and records, were complete and correct in
all material respects on the date filed (or were corrected or
supplemented by a subsequent submission); and (G) has not, either
voluntarily or involuntarily, initiated, conducted, or issued or
caused to be initiated, conducted or issued, any recall, market
withdrawal or replacement, safety alert, post-sale warning, or
other notice or action relating to the alleged lack of safety or
any alleged product defect or violation and, to the Company’s
knowledge, no third party has initiated, conducted or intends to
initiate any such notice or action.
-16-
2.36 Clinical
Data and Regulatory Compliance.
The Company’s clinical and non-clinical studies
(collectively, “studies”) that are described in, or the
results of which are referred to in, the Registration Statement,
the Time of Sale Prospectus or the Prospectus were and, if still
pending, are being conducted in all material respects in accordance
with the study protocols submitted to the U.S. Food and Drug
Administration (“FDA”) and/or with applicable FDA
regulations; each description of the results of such studies is
accurate and complete in all material respects and fairly presents
the data derived from such studies, and the Company and its
Subsidiaries have no knowledge of any other studies the results of
which are inconsistent with, or otherwise call into question, the
results described or referred to in the Registration Statement, the
Time of Sale Prospectuses or the Prospectus; the Company and its
Subsidiaries have made all such filings and obtained all such
approvals as may be required by the FDA or from any other U.S. or
foreign government or drug regulatory agency (collectively, the
“Regulatory Agencies”) or any health care facility
Institutional Review Board (“IRB”); neither the Company
nor any of its Subsidiaries has received any notice of, or
correspondence from, any Regulatory Agency or IRB requiring the
termination or suspension of any clinical trials that are described
or referred to in the Registration Statement, the Preliminary
Prospectus or the Prospectus; and the Company and its Subsidiaries
have each operated and currently are in compliance in all material
respects with all applicable rules and regulations of the
Regulatory Agencies.
2.37 Compliance
with Health Care Laws. The
Company and its Subsidiaries are in compliance with applicable
Health Care Laws, except for any noncompliance that would not
reasonably be expected to have a Material Adverse Change. For
purposes of this Agreement, “Health Care Laws” means:
(i) the Federal Food, Drug, and Cosmetic Act and the regulations
promulgated thereunder; (ii) the Standards for Privacy of
Individually Identifiable Health Information (the “Privacy
Rule”), the Security Standards, and the Standards for
Electronic Transactions and Code Sets promulgated under HIPAA, the
Health Information Technology for Economic and Clinical Health Act
(42 U.S.C. Section 17921 et seq.), and the regulations promulgated
thereunder and any state or non-U.S. counterpart thereof or other
law or regulation the purpose of which is to protect the privacy of
individuals or prescribers; (iii) licensure, quality, safety and
accreditation requirements under applicable federal, state, local
or foreign laws or regulatory bodies; and (iv) all other local,
state, federal, national, supranational and foreign laws, relating
to the regulation of the Company or its Subsidiaries. Neither the
Company nor its Subsidiaries have received written notice of any
claim, action, suit, proceeding, hearing, enforcement,
investigation, arbitration or other action from any court or
arbitrator or Governmental Entity or third party alleging that any
product operation or activity is in material violation of any
Health Care Laws nor, to the Company’s knowledge, is any such
claim, action, suit, proceeding, hearing, enforcement,
investigation, arbitration or other action threatened. The Company
and its Subsidiaries have filed, obtained, maintained or submitted
all material reports, documents, forms, notices, applications,
records, claims, submissions and supplements or amendments as
required by any Health Care Laws, and all such reports, documents,
forms, notices, applications, records, claims, submissions and
supplements or amendments were timely, complete, accurate and not
misleading on the date filed in all material respects (or were
corrected or supplemented by a subsequent submission). Neither the
Company nor its Subsidiaries are a party to any corporate integrity
agreements, monitoring agreements, consent decrees, settlement
orders, or similar agreements with or imposed by any Governmental
Entity. Additionally, neither the Company, its Subsidiaries nor, to
the Company’s knowledge, any of their respective employees,
officers or directors has been excluded, suspended or debarred from
participation in any U.S. federal health care program or human
clinical research or, to the knowledge of the Company, is subject
to a governmental inquiry, investigation, proceeding, or other
similar action that could reasonably be expected to result in
debarment, suspension, or exclusion.
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2.38 Ineligible
Issuer. At the time of filing
the Registration Statement and any post-effective amendment
thereto, at the time of effectiveness of the Registration Statement
and any amendment thereto, at the earliest time thereafter that the
Company or another offering participant made a bona fide offer
(within the meaning of Rule 164(h)(2) of the Securities Act
Regulations) of the Public Securities and at the date hereof, the
Company was not and is not an “ineligible issuer,” as
defined in Rule 405, without taking account of any determination by
the Commission pursuant to Rule 405 that it is not necessary that
the Company be considered an ineligible issuer.
2.39 Real
Property. Except as set forth
in the Registration Statement, the Pricing Disclosure Package and
the Prospectus, the Company and its Subsidiaries have good and
marketable title in fee simple to, or have valid rights to lease or
otherwise use, all items of real or personal property which are
material to the business of the Company and its Subsidiaries taken
as a whole, in each case free and clear of all liens, encumbrances,
security interests, claims and defects that do not, singly or in
the aggregate, materially affect the value of such property and do
not interfere with the use made and proposed to be made of such
property by the Company or its Subsidiaries; and all of the leases
and subleases material to the business of the Company and its
Subsidiaries, considered as one enterprise, and under which the
Company or any of its Subsidiaries holds properties described in
the Registration Statement, the Pricing Disclosure Package and the
Prospectus, are in full force and effect, and neither the Company
nor any Subsidiary has received any notice of any material claim of
any sort that has been asserted by anyone adverse to the rights of
the Company or any Subsidiary under any of the leases or subleases
mentioned above, or affecting or questioning the rights of the
Company or such Subsidiary to the continued possession of the
leased or subleased premises under any such lease or
sublease.
2.40 Contracts
Affecting Capital. There are no
transactions, arrangements or other relationships between and/or
among the Company, any of its affiliates (as such term is defined
in Rule 405 of the Securities Act Regulations) and any
unconsolidated entity, including, but not limited to, any
structured finance, special purpose or limited purpose entity that
could reasonably be expected to materially affect the
Company’s or its Subsidiaries’ liquidity or the
availability of or requirements for their capital resources
required to be described or incorporated by reference in the
Registration Statement, the Pricing Disclosure Package and the
Prospectus which have not been described or incorporated by
reference as required.
2.41 Loans
to Directors or Officers. There
are no outstanding loans, advances (except normal advances for
business expenses in the ordinary course of business) or guarantees
or indebtedness by the Company or its Subsidiaries to or for the
benefit of any of the officers or directors of the Company, its
Subsidiaries or any of their respective family members, except as
disclosed in the Registration Statement, the Pricing Disclosure
Package and the Prospectus.
2.42 Smaller
Reporting Company. As of the
time of filing of the Registration Statement, the Company was a
“smaller reporting company,” as defined in Rule 12b-2
of the Exchange Act Regulations.
2.43 Industry
Data. The statistical and
market-related data included in each of the Registration Statement,
the Pricing Disclosure Package and the Prospectus are based on or
derived from sources that the Company reasonably and in good faith
believes are reliable and accurate or represent the Company’s
good faith estimates that are made on the basis of data derived
from such sources.
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2.44 Emerging
Growth Company. From the time
of the initial confidential submission of the Registration
Statement to the Commission (or, if earlier, the first date on
which the Company engaged directly in or through any Person
authorized to act on its behalf in any Testing-the Waters
Communication) through the date hereof, the Company has been and is
an “emerging growth company,” as defined in Section
2(a) of the Securities Act (an “Emerging Growth
Company”). “Testing-the-Waters Communication”
means any oral or written communication with potential investors
undertaken in reliance on Section 5(d) of the Securities
Act.
2.45 Testing-the-Waters
Communications. The Company has
not (i) alone engaged in any Testing-the-Waters Communications,
other than Testing-the-Waters Communications with the written
consent of the Representatives and with entities that are qualified
institutional buyers within the meaning of Rule 144A under the
Securities Act or institutions that are accredited investors within
the meaning of Rule 501 under the Securities Act and (ii)
authorized anyone other than the Representatives to engage in
Testing-the-Waters Communications. The Company confirms that the
Representatives have been authorized to act on its behalf in
undertaking Testing-the-Waters Communications. The Company has not
distributed any Written Testing-the-Waters Communications other
than those listed on Schedule 2-C
hereto. “Written
Testing-the-Waters Communication” means any
Testing-the-Waters Communication that is a written communication
within the meaning of Rule 405 under the Securities
Act.
3. Covenants
of the Company. The Company
covenants and agrees as follows:
3.1 Amendments
to Registration Statement. The
Company shall deliver to the Representatives, prior to filing, any
amendment or supplement to the Registration Statement or Prospectus
proposed to be filed after the Effective Date and not file any such
amendment or supplement to which the Representatives shall
reasonably object in writing.
3.2 Federal
Securities Laws.
3.2.1 Compliance.
The Company, subject to Section 3.2.2,
shall comply in all material respects with the requirements of Rule
430A of the Securities Act Regulations, and will notify the
Representatives promptly, and confirm the notice in writing, (i)
when any post-effective amendment to the Registration Statement
shall become effective or any amendment or supplement to the
Prospectus shall have been filed; (ii) of the receipt of any
comments from the Commission; (iii) of any request by the
Commission for any amendment to the Registration Statement or any
amendment or supplement to the Prospectus or for additional
information; (iv) of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement or
any post-effective amendment or of any order preventing or
suspending the use of any Preliminary Prospectus or the Prospectus,
or of the suspension of the qualification of the Public Securities
and Representatives’ Securities for offering or sale in any
jurisdiction, or of the initiation or threatening of any
proceedings for any of such purposes or of any examination pursuant
to Section 8(d) or 8(e) of the Securities Act concerning the
Registration Statement and (v) if the Company becomes the subject
of a proceeding under Section 8A of the Securities Act in
connection with the Offering of the Public Securities and
Representatives’ Securities. The Company shall effect all
filings required under Rule 424(b) of the Securities Act
Regulations, in the manner and within the time period required by
Rule 424(b) (without reliance on Rule 424(b)(8)), and shall take
such steps as it deems reasonably necessary to ascertain promptly
whether the form of prospectus transmitted for filing under Rule
424(b) was received for filing by the Commission and, in the event
that it was not, it will promptly file such prospectus. The Company
shall use its commercially reasonable efforts to prevent the
issuance of any stop order, prevention or suspension and, if any
such order is issued, to obtain the lifting thereof at the earliest
possible moment.
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3.2.2 Continued
Compliance. The Company shall
comply in all material respects with the Securities Act, the
Securities Act Regulations, the Exchange Act and the Exchange Act
Regulations so as to permit the completion of the distribution of
the Public Securities as contemplated in this Agreement and in the
Registration Statement, the Pricing Disclosure Package and the
Prospectus. If at any time when a prospectus relating to the Public
Securities is (or, but for the exception afforded by Rule 172 of
the Securities Act Regulations (“Rule 172”), would be)
required by the Securities Act to be delivered in connection with
sales of the Public Securities, any event shall occur or condition
shall exist as a result of which it is necessary, in the opinion of
counsel for the Underwriters or for the Company, to (i) amend the
Registration Statement in order that the Registration Statement
will not include an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to
make the statements therein not misleading; (ii) amend or
supplement the Pricing Disclosure Package or the Prospectus in
order that the Pricing Disclosure Package or the Prospectus, as the
case may be, will not include any untrue statement of a material
fact or omit to state a material fact necessary in order to make
the statements therein not misleading in the light of the
circumstances existing at the time it is delivered to a purchaser;
or (iii) amend the Registration Statement or amend or supplement
the Pricing Disclosure Package or the Prospectus, as the case may
be, in order to comply with the requirements of the Securities Act
or the Securities Act Regulations, the Company will promptly (A)
give the Representatives notice of such event; (B) prepare any
amendment or supplement as may be necessary to correct such
statement or omission or to make the Registration Statement, the
Pricing Disclosure Package or the Prospectus comply with such
requirements and, a reasonable amount of time prior to any proposed
filing or use, furnish the Representatives with copies of any such
amendment or supplement and (C) file with the Commission any such
amendment or supplement; provided that the Company shall not file
or use any such amendment or supplement to which the
Representatives or Representative Counsel shall reasonably object.
The Company will furnish to the Underwriters such number of copies
of such amendment or supplement as the Underwriters may reasonably
request. The Company has given the Representatives notice of any
filings made pursuant to the Exchange Act or the Exchange Act
Regulations within 48 hours prior to the Applicable Time. The
Company shall give the Representatives notice of its intention to
make any such filing from the Applicable Time until the later of
the Closing Date and the exercise in full or expiration of the
Over-allotment Option specified in Section 1.2
hereof and will furnish the
Representatives with copies of the related document(s) a reasonable
amount of time prior to such proposed filing, as the case may be,
and will not file or use any such document to which the
Representatives or counsel for the Underwriters shall reasonably
object.
3.2.3 Exchange
Act Registration. For a period
of three (3) years after the date of this Agreement, the Company
shall use its commercially reasonable efforts to maintain the
registration of the shares of Common Stock under the Exchange Act.
The Company shall not deregister the shares of Common Stock under
the Exchange Act without the prior written consent of the
Representatives.
3.2.4 Free
Writing Prospectuses. The
Company agrees that, unless it obtains the prior written consent of
the Representatives, it shall not make any offer relating to the
Public Securities that would constitute an Issuer Free Writing
Prospectus or that would otherwise constitute a “free writing
prospectus,” or a portion thereof, required to be filed by
the Company with the Commission or retained by the Company under
Rule 433; provided that the Representatives shall be deemed to have
consented to each Issuer General Use Free Writing Prospectus hereto
and any “road show that is a written communication”
within the meaning of Rule 433(d)(8)(i) that has been reviewed by
the Representatives. The Company represents that it has treated or
agrees that it will treat each such free writing prospectus
consented to, or deemed consented to, by the Underwriters as an
“issuer free writing prospectus,” as defined in Rule
433, and that it has complied and will comply with the applicable
requirements of Rule 433 with respect thereto, including timely
filing with the Commission where required, legending and record
keeping. 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 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 existing at that subsequent time,
not misleading, the Company will promptly notify the Underwriters
and will promptly amend or supplement, at its own expense, such
Issuer Free Writing Prospectus to eliminate or correct such
conflict, untrue statement or omission.
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3.2.5 Testing-the-Waters
Communications. If at any time
following the distribution of any Written Testing-the-Waters
Communication there occurred or occurs an event or development as a
result of which such Written Testing-the-Waters Communication
included or would include an untrue statement of a material fact or
omitted or would omit to state a material fact necessary in order
to make the statements therein, in the light of the circumstances
existing at that subsequent time, not misleading, the Company shall
promptly notify the Representatives and shall promptly amend or
supplement, at its own expense, such Written Testing-the-Waters
Communication to eliminate or correct such untrue statement or
omission.
3.3 Delivery
to the Underwriters of Registration Statements. The Company has delivered or made available or
shall deliver or make available to the Representatives and
Representative Counsel, without charge, signed copies of the
Registration Statement as originally filed and each amendment
thereto (including exhibits filed therewith) and signed copies of
all consents and certificates of experts, and will also deliver to
the Underwriters, upon request and without charge, a conformed copy
of the Registration Statement as originally filed and each
amendment thereto (without exhibits) for each of the Underwriters.
The copies of the Registration Statement and each amendment thereto
furnished to the Underwriters will be identical to the
electronically transmitted copies thereof filed with the Commission
pursuant to ▇▇▇▇▇, except to the extent permitted by Regulation
S-T.
3.4 Delivery
to the Underwriters of Prospectuses. The Company has delivered or made available or
will deliver or make available to each Underwriter, without charge,
as many copies of each Preliminary Prospectus as such Underwriter
reasonably requested, and the Company hereby consents to the use of
such copies for purposes permitted by the Securities Act. The
Company will furnish to each Underwriter, without charge, during
the period when a prospectus relating to the Public Securities is
(or, but for the exception afforded by Rule 172, would be) required
to be delivered under the Securities Act, such number of copies of
the Prospectus (as amended or supplemented) as such Underwriter may
reasonably request. The Prospectus and any amendments or
supplements thereto furnished to the Underwriters will be identical
to the electronically transmitted copies thereof filed with the
Commission pursuant to ▇▇▇▇▇, except to the extent permitted by
Regulation S-T.
3.5 Effectiveness
and Events Requiring Notice to the
Representatives. The Company
shall use its commercially reasonable efforts to cause the
Registration Statement to remain effective with a current
prospectus for at least nine (9) months after the Applicable Time,
and shall notify the Representatives promptly and confirm the
notice in writing: (i) of the effectiveness of the Registration
Statement and any amendment thereto; (ii) of the issuance by the
Commission of any stop order or of the initiation, or the
threatening, of any proceeding for that purpose; (iii) of the
issuance by any state securities commission of any proceedings for
the suspension of the qualification of the Public Securities for
offering or sale in any jurisdiction or of the initiation, or the
threatening, of any proceeding for that purpose; (iv) of the
mailing and delivery to the Commission for filing of any amendment
or supplement to the Registration Statement or Prospectus; (v) of
the receipt of any comments or request for any additional
information from the Commission; and (vi) of the happening of any
event during the period described in this Section 3.5
that, in the judgment of the Company,
makes any statement of a material fact made in the Registration
Statement, the Pricing Disclosure Package or the Prospectus untrue
or that requires the making of any changes in (a) the Registration
Statement in order to make the statements therein not misleading,
or (b) in the Pricing Disclosure Package or the Prospectus in order
to make the statements therein, in light of the circumstances under
which they were made, not misleading. If the Commission or any
state securities commission shall enter a stop order or suspend
such qualification at any time, the Company shall use its
commercially reasonable efforts to obtain promptly the lifting of
such order.
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3.6 Review
of Financial Statements. For a
period of three (3) years after the date of this Agreement, the
Company, at its expense, shall cause its regularly engaged
independent registered public accounting firm to review (but not
audit) the Company’s financial statements for each of the
three fiscal quarters immediately preceding the announcement of any
quarterly financial information.
3.7 Listing.
The Company shall use its commercially reasonable efforts to
maintain the listing of the shares of Common Stock (including the
Public Securities) on the Exchange for at least three (3) years
from the date of this Agreement.
3.8.1 Periodic Reports,
etc. For a period of three (3)
years after the date of this Agreement, the Company shall furnish
or make available to the Representatives copies of such financial
statements and other periodic and special reports as the Company
from time to time furnishes generally to holders of any class of
its securities and also promptly furnish to the Representatives:
(i) a copy of each periodic report the Company shall be required to
file with the Commission under the Exchange Act and the Exchange
Act Regulations; (ii) a copy of every press release and every news
item and article with respect to the Company or its affairs which
was released by the Company; (iii) a copy of each Form 8-K filed by
the Company; (iv) five copies of each registration statement filed
by the Company under the Securities Act; and (v) such additional
documents and information with respect to the Company and the
affairs of any future subsidiaries of the Company as the
Representatives may from time to time reasonably request; provided
the Representatives shall sign, if requested by the Company, a
Regulation FD compliant confidentiality agreement which is
reasonably acceptable to the Representatives and Representative
Counsel in connection with the Representatives’ receipt of
such information. Documents filed with the Commission pursuant to
its ▇▇▇▇▇ system shall be deemed to have been delivered to the
Representatives pursuant to this Section 3.8.1.
3.8.2 Transfer
Agent; Transfer Sheets. For a
period of one (1) year after the date of this Agreement, the
Company shall retain a transfer agent and registrar acceptable to
the Representatives (the “Transfer Agent”) and shall
furnish to the Representatives at the Company’s sole cost and
expense such transfer sheets of the Company’s securities as
the Representatives may reasonably request, including the daily and
monthly consolidated transfer sheets of the Transfer Agent and DTC.
Transhare Corporation is acceptable to the Representatives to act
as Transfer Agent for the shares of Common
Stock.
3.8.3 Trading
Reports. For a period of three
(3) years after the date of this Agreement and so long the Public
Securities are listed on the Exchange, the Company shall provide to
the Representatives, at the Company’s expense, such reports
published by the Exchange relating to price trading of the Public
Securities, as the Representatives shall reasonably
request.
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3.9 Payment
of Expenses
3.9.1 General Expenses
Related to the Offering. The
Company hereby agrees to pay on each of the Closing Date and the
Option Closing Date, if any, to the extent not paid at the Closing
Date, all expenses incident to the performance of the obligations
of the Company under this Agreement, including, but not limited to:
(a) all filing fees and communication expenses relating to the
registration of the shares of Common Stock to be sold in the
Offering (including the Over-allotment Shares) with the Commission;
(b) all Public Filing System filing fees associated with the review
of the Offering by FINRA; (c) all fees and expenses relating to the
listing of such Public Securities on the Exchange and such other
stock exchanges as the Company and the Representatives together
determine; (d) all fees, expenses and disbursements relating to
background checks of the Company’s officers and directors in
an amount not to exceed $5,000 in the aggregate; (e) all fees,
expenses and disbursements, if any, relating to the registration or
qualification of the Public Securities under the “blue
sky” securities laws of such states and other jurisdictions
as the Representatives may reasonably designate if the Offering is
commenced on the Over-the-Counter Bulletin Board, and the
reasonable fees upon the commencement of “blue sky”
work by such counsel of up to $10,000; (f) all fees, expenses and
disbursements relating to the registration, qualification or
exemption of the Public Securities under the securities laws of
such foreign jurisdictions as the Representatives may reasonably
designate; (g) the costs of all mailing and printing of the
underwriting documents (including, without limitation, the
Underwriting Agreement, any Blue Sky Surveys and, if appropriate,
any Agreement Among Underwriters, Selected Dealers’
Agreement, Underwriters’ Questionnaire and Power of
Attorney), Registration Statements, Prospectuses and all
amendments, supplements and exhibits thereto and as many
preliminary and final Prospectuses as the Representatives may
reasonably deem necessary; (h) the costs and expenses of a public
relations firm; (i) the costs of preparing, printing and delivering
certificates representing the Public Securities; (j) fees and
expenses of the transfer agent for the shares of Common Stock; (k)
stock transfer and/or stamp taxes, if any, payable upon the
transfer of securities from the Company to the Underwriters; (l) to
the extent approved by the Company in writing, the costs associated
with post-Closing advertising the Offering in the national editions
of the Wall Street Journal and New York Times; (m) the costs
associated with one set of bound volumes of the public offering
materials as well as commemorative mementos and lucite tombstones,
each of which the Company or its designee shall provide within a
reasonable time after the Closing Date in such quantities as the
Representatives may reasonably request up to $5,000; (n) the fees
and expenses of the Company’s accountants; (o) the fees and
expenses of the Company’s legal counsel and other agents and
representatives; (p) the $25,000 cost associated with the
Underwriter’s use of Ipreo’s book-building, prospectus
tracking and compliance software for the Offering; (q) fees and
expenses of the Representative Counsel not to exceed $100,000; and
(r) up to $21,775 of the Underwriter’s actual accountable
“road show” expenses for the Offering. The
Representatives may deduct from the net proceeds of the Offering
payable to the Company on the Closing Date, or the Option Closing
Date, if any, the expenses set forth herein to be paid by the
Company to the Underwriters, other than amounts already advanced to
the Representatives as of the date of this Underwriting
Agreement.
3.9.2 Non-accountable
Expenses. The Company further
agrees that, in addition to the expenses payable pursuant to
Section 3.9.1, on
the Closing Date it shall pay to the Representatives, by deduction
from the net proceeds of the Offering contemplated herein, a
non-accountable expense allowance equal to two percent (2%) of the
gross proceeds received by the Company from the sale of the Firm
Shares (excluding the Option Shares), less the Advance (as such
term is defined in Section 8.3
hereof), provided, however, that in
the event that the Offering is terminated, the Company agrees to
reimburse the Underwriters pursuant to Section 8.3
hereof.
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3.10 Application
of Net Proceeds. The Company
shall apply the net proceeds from the Offering received by it in a
manner consistent with the application thereof described under the
caption “Use of Proceeds” in the Registration
Statement, the Pricing Disclosure Package and the
Prospectus.
3.11 Delivery
of Earnings Statements to Security Holders. The Company shall make generally available to
its security holders as soon as practicable, but not later than the
first day of the fifteenth (15th)
full calendar month following the date of this Agreement, an
earnings statement (which need not be certified by independent
registered public accounting firm unless required by the Securities
Act or the Securities Act Regulations, but which shall satisfy the
provisions of Rule 158(a) under Section 11(a) of the Securities
Act) covering a period of at least twelve (12) consecutive months
beginning after the date of this Agreement.
3.12 Stabilization.
Neither the Company nor, to its knowledge, any of its employees,
directors or shareholders (without the consent of the
Representatives) has taken or shall take, directly or indirectly,
any action designed to or that has constituted or that might
reasonably be expected to cause or result in, under Regulation M of
the Exchange Act, or otherwise, stabilization or manipulation of
the price of any security of the Company to facilitate the sale or
resale of the Public Securities.
3.13 Internal
Controls. The Company shall
maintain a system of internal accounting controls sufficient to
provide reasonable assurances that: (i) transactions are executed
in accordance with management’s general or specific
authorization; (ii) transactions are recorded as necessary in order
to permit preparation of financial statements in accordance with
GAAP and to maintain accountability for assets; (iii) access to
assets is permitted only in accordance with management’s
general or specific authorization; and (iv) the recorded
accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect
to any differences.
3.14 Accountants.
As of the date of this Agreement, the Company has retained an
independent registered public accounting firm reasonably acceptable
to the Representatives, and the Company shall continue to retain a
nationally recognized independent registered public accounting firm
for a period of at least three (3) years after the date of this
Agreement. The Representatives acknowledge that the Auditor is
acceptable to the Representatives.
3.15 FINRA.
The Company shall advise the Representatives (who shall make an
appropriate filing with FINRA) if it is or becomes aware that (i)
any officer or director of the Company, (ii) any beneficial owner
of 5% or more of any class of the Company’s securities or
(iii) any beneficial owner of the Company’s unregistered
equity securities which were acquired during the 180 days
immediately preceding the filing of the Registration Statement is
or becomes an affiliate or associated person of a FINRA member
participating in the Offering (as determined in accordance with the
rules and regulations of FINRA).
3.16 No
Fiduciary Duties. The Company
acknowledges and agrees that the Underwriters’ responsibility
to the Company is solely contractual in nature and that none of the
Underwriters or their affiliates or any selling agent shall be
deemed to be acting in a fiduciary capacity, or otherwise owes any
fiduciary duty to the Company or any of its affiliates in
connection with the Offering and the other transactions
contemplated by this Agreement.
-24-
3.17 Company
Lock-Up Agreements.
3.17.1 Restriction on Sales
of Capital Stock. The Company,
on behalf of itself and any successor entity, agrees that, without
the prior written consent of the Representatives, it will not, for
a period of 180 days after the date of this Agreement (the
“Lock-Up Period”), (i) offer, pledge, sell, contract to
sell, sell any option or contract to purchase, purchase any option
or contract to sell, grant any option, right or warrant to
purchase, lend, or otherwise transfer or dispose of, directly or
indirectly, any shares of capital stock of the Company or any
securities convertible into or exercisable or exchangeable for
shares of capital stock of the Company; (ii) file or cause to be
filed any registration statement with the Commission relating to
the offering of any shares of capital stock of the Company or any
securities convertible into or exercisable or exchangeable for
shares of capital stock of the Company; or (iii) enter into any
swap or other arrangement that transfers to another, in whole or in
part, any of the economic consequences of ownership of capital
stock of the Company, whether any such transaction described in
clause (i), (ii) or (iii) above is to be settled by delivery of
shares of capital stock of the Company or such other securities, in
cash or otherwise.
The
restrictions contained in this Section 3.18.1 shall not apply to (i) the shares of
Common Stock to be sold hereunder, (ii) the issuance by the Company
of shares of Common Stock upon the exercise of a stock option or
warrant or the conversion of a security outstanding on the date
hereof, of which the Representatives has been advised in writing or
(iii) the issuance by the Company of stock options or shares of
capital stock of the Company under any equity compensation plan of
the Company.
Notwithstanding the
foregoing, if (i) during the last 17 days of the Lock-Up Period,
the Company issues an earnings release or material news or a
material event relating to the Company occurs, or (ii) prior to the
expiration of the Lock-Up Period, the Company announces that it
will release earnings results or becomes aware that material news
or a material event will occur during the 16-day period beginning
on the last day of the Lock-Up Period, the restrictions imposed by
this Section 3.18.1 shall continue to
apply until the expiration of the 18-day period beginning on the
issuance of the earnings release or the occurrence of such material
news or material event, as applicable, unless the Representatives
waive, in writing, such extension; provided, however, that this
extension of the Lock-Up Period shall not apply to the extent that
FINRA has amended or repealed NASD Rule 2711(f)(4), or has
otherwise provided written interpretive guidance regarding such
rule, in each case, so as to eliminate the prohibition of any
broker, dealer, or member of a national securities association from
publishing or distributing any research report, with respect to the
securities of an Emerging Growth Company prior to or after the
expiration of any agreement between the broker, dealer, or member
of a national securities association and the Emerging Growth
Company or its shareholders that restricts or prohibits the sale of
securities held by the Emerging Growth Company or its shareholders
after the initial public offering date.
3.17.2 Restriction
on Continuous Offerings.
Notwithstanding the restrictions contained in Section
3.18.1,
the Company, on behalf of itself and any successor entity, agrees
that, without the prior written consent of the Representatives, it
will not, for a period of 12 months after the date of this
Agreement, directly or indirectly in any
“at-the-market” or continuous equity transaction, offer
to sell, sell, contract to sell, grant any option to sell or
otherwise dispose of shares of capital stock of the Company or any
securities convertible into or exercisable or exchangeable for
shares of capital stock of the Company.
3.18 Release
of D&O Lock-up Period. If
the Representatives, in their sole discretion, agrees to release or
waive the restrictions set forth in the Lock-Up Agreements
described in Section 2.24 hereof for an officer or director of the Company
and provides the Company with notice of the impending release or
waiver at least three (3) Business Days before the effective date
of the release or waiver, the Company agrees to announce the
impending release or waiver by a press release substantially in the
form of Exhibit C
hereto through a major news service at
least two (2) Business Days before the effective date of the
release or waiver.
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3.19 Blue
Sky Qualifications. The Company
shall use its commercially reasonable efforts, in cooperation with
the Underwriters, if necessary, to qualify the Public Securities
for offering and sale under the applicable securities laws of such
states and other jurisdictions (domestic or foreign) as the
Representatives may designate and to maintain such qualifications
in effect so long as required to complete the distribution of the
Public Securities; provided, however, that the Company shall not be
obligated to file any general consent to service of process or to
qualify as a foreign corporation or as a dealer in securities in
any jurisdiction in which it is not so qualified or to subject
itself to taxation in respect of doing business in any jurisdiction
in which it is not otherwise so subject.
3.20 Reporting
Requirements. The Company,
during the period when a prospectus relating to the Public
Securities is (or, but for the exception afforded by Rule 172,
would be) required to be delivered under the Securities Act, will
use its commercially reasonable efforts to file all documents
required to be filed with the Commission pursuant to the Exchange
Act within the time periods required by the Exchange Act and
Exchange Act Regulations. Additionally, the Company shall report
the use of proceeds from the issuance of the Public Securities as
may be required under Rule 463 under the Securities Act
Regulations.
3.21 Emerging
Growth Company Status. The
Company shall promptly notify the Representatives if the Company
ceases to be an Emerging Growth Company at any time prior to the
later of (i) completion of the distribution of the Public
Securities within the meaning of the Securities Act and (ii)
fifteen (15) days following the completion of the Lock-Up
Period.
4. Conditions
of Underwriters’ Obligations. The obligations of the Underwriters to purchase
and pay for the Public Securities, as provided herein, shall be
subject to (i) the continuing accuracy of the representations and
warranties of the Company as of the date hereof and as of each of
the Closing Date and the Option Closing Date, if any; (ii) the
accuracy of the statements of officers of the Company made pursuant
to the provisions hereof; (iii) the performance by the Company of
its obligations hereunder; and (iv) the following
conditions:
4.1 Regulatory
Matters.
4.1.1 Effectiveness
of Registration Statement; Rule 430A Information. The Registration Statement has become effective
not later than 5:00 p.m., Eastern time, on the date of this
Agreement or such later date and time as shall be consented to in
writing by you, and, at each of the Closing Date and any Option
Closing Date, no stop order suspending the effectiveness of the
Registration Statement or any post-effective amendment thereto has
been issued under the Securities Act, no order preventing or
suspending the use of any Preliminary Prospectus or the Prospectus
has been issued and no proceedings for any of those purposes have
been instituted or are pending or, to the Company’s
knowledge, contemplated by the Commission. The Company has complied
with each request (if any) from the Commission for additional
information. The Prospectus containing the Rule 430A Information
shall have been filed with the Commission in the manner and within
the time frame required by Rule 424(b) (without reliance on Rule
424(b)(8)) or a post-effective amendment providing such information
shall have been filed with, and declared effective by, the
Commission in accordance with the requirements of Rule
430A.
4.1.2 FINRA
Clearance. On or before the
date of this Agreement, the Representatives shall have received
clearance from FINRA as to the amount of compensation allowable or
payable to the Underwriters as described in the Registration
Statement.
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4.1.3 Exchange
Stock Market Clearance. On the
Closing Date, the Company’s shares of Common Stock, including
the Firm Shares, shall have been approved for listing on the
Exchange, subject only to official notice of issuance. On the first
Option Closing Date (if any), the Company’s shares of Common
Stock, including the Option Shares, shall have been approved for
listing on the Exchange, subject only to official notice of
issuance.
4.2 Company
Counsel Matters.
4.2.1 Closing Date Opinion
of Counsel. On the Closing
Date, the Representatives shall have received the favorable opinion
of Loeb & Loeb, LLP, counsel to the Company, dated the Closing
Date and addressed to the Representatives, substantially in the
form of Exhibit D
attached hereto.
4.2.2 Option
Closing Date Opinions of Counsel. On the Option Closing Date, if any, the
Representatives shall have received the favorable opinions of each
counsel listed in Section 4.2.1,
dated the Option Closing Date, addressed to the Representatives and
in form and substance reasonably satisfactory to the
Representatives, confirming as of the Option Closing Date, the
statements made by such counsels in their respective opinions
delivered on the Closing Date.
4.2.3 Reliance.
In rendering such opinions, such counsel may rely: (i) as to
matters involving the application of laws other than the laws of
the United States and jurisdictions in which they are admitted, to
the extent such counsel deems proper and to the extent specified in
such opinion, if at all, upon an opinion or opinions (in form and
substance reasonably satisfactory to the Representatives) of other
counsel reasonably acceptable to the Representatives, familiar with
the applicable laws; and (ii) as to matters of fact, to the extent
they deem proper, on certificates or other written statements of
officers of the Company and officers of departments of various
jurisdictions having custody of documents respecting the corporate
existence or good standing of the Company, provided that copies of
any such statements or certificates shall be delivered to
Representative Counsel if requested. The opinion of Loeb &
Loeb, LLP and any opinion relied upon by Loeb & Loeb, LLP shall
include a statement to the effect that it may be relied upon by
Representative Counsel in its opinion delivered to the
Underwriters.
4.3 Comfort
Letters.
4.3.1 Cold Comfort
Letter. At the time this
Agreement is executed you shall have received a cold comfort letter
containing statements and information of the type customarily
included in accountants’ comfort letters with respect to the
financial statements and certain financial information contained in
the Registration Statement, the Pricing Disclosure Package and the
Prospectus, addressed to the Representatives and in form and
substance satisfactory in all respects to you and to the Auditor,
dated as of the date of this Agreement.
4.3.2 Bring-down
Comfort Letter. At each of the
Closing Date and the Option Closing Date, if any, the
Representatives shall have received from the Auditor a letter,
dated as of the Closing Date or the Option Closing Date, as
applicable, to the effect that the Auditor reaffirms the statements
made in the letter furnished pursuant to Section 4.3.1,
except that the specified date referred to shall be a date not more
than three (3) business days prior to the Closing Date or the
Option Closing Date, as applicable.
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4.4 Officers’
Certificates.
4.4.1 Officers’
Certificate. The Company shall
have furnished to the Representatives a certificate, dated the
Closing Date and any Option Closing Date (if such date is other
than the Closing Date), of its Chief Executive Officer, its
President and its Chief Financial Officer stating that (i) such
officers have carefully examined the Registration Statement, the
Pricing Disclosure Package, any Issuer Free Writing Prospectus and
the Prospectus and, in their opinion, the Registration Statement
and each amendment thereto, as of the Applicable Time and as of the
Closing Date (or any Option Closing Date if such date is other than
the Closing Date) did not include any untrue statement of a
material fact and did not omit to state a material fact required to
be stated therein or necessary to make the statements therein not
misleading, and the Pricing Disclosure Package, as of the
Applicable Time and as of the Closing Date (or any Option Closing
Date if such date is other than the Closing Date), any Issuer Free
Writing Prospectus as of its date and as of the Closing Date (or
any Option Closing Date if such date is other than the Closing
Date), the Prospectus and each amendment or supplement thereto, as
of the respective date thereof and as of the Closing Date, did not
include any untrue statement of a material fact and did not omit to
state a material fact necessary in order to make the statements
therein, in the light of the circumstances in which they were made,
not misleading, (ii) since the effective date of the Registration
Statement, no event has occurred which should have been set forth
in a supplement or amendment to the Registration Statement, the
Pricing Disclosure Package or the Prospectus, (iii) to the best of
their knowledge, as of the Closing Date (or any Option Closing Date
if such date is other than the Closing Date), the representations
and warranties of the Company in this Agreement are true and
correct and the Company has complied with all agreements and
satisfied all conditions on its part to be performed or satisfied
hereunder at or prior to the Closing Date (or any Option Closing
Date if such date is other than the Closing Date), and (iv) there
has not been, subsequent to the date of the most recent audited
financial statements included or incorporated by reference in the
Pricing Disclosure Package, any material adverse change in the
financial position or results of operations of the Company, or any
change or development that, singularly or in the aggregate, would
involve a material adverse change or a prospective material adverse
change, in or affecting the condition (financial or otherwise),
results of operations, business, assets or prospects of the
Company, except as set forth in the Prospectus.
4.4.2 Secretary’s
Certificate. At each of the
Closing Date and the Option Closing Date, if any, the
Representatives shall have received a certificate of the Company
signed by the Secretary of the Company, dated the Closing Date or
the Option Date, as the case may be, respectively, certifying: (i)
that each of the Charter and Bylaws is true and complete, has not
been modified and is in full force and effect; (ii) that the
resolutions of the Company’s Board of Directors relating to
the Offering are in full force and effect and have not been
modified; (iii) as to the accuracy and completeness of all
correspondence between the Company or its counsel and the
Commission; and (iv) as to the incumbency of the officers of the
Company. The documents referred to in such certificate shall be
attached to such certificate.
4.5 No
Material Changes. Prior to and
on each of the Closing Date and each Option Closing Date, if any:
(i) there shall have been no material adverse change or development
involving a prospective material adverse change in the condition or
prospects or the business activities, financial or otherwise, of
the Company from the latest dates as of which such condition is set
forth in the Registration Statement, the Pricing Disclosure Package
and the Prospectus; (ii) no action, suit or proceeding, at law or
in equity, shall have been pending or threatened against the
Company or any Insider before or by any court or federal or state
commission, board or other administrative agency wherein an
unfavorable decision, ruling or finding may materially adversely
affect the business, operations, prospects or financial condition
or income of the Company, except as set forth in the Registration
Statement, the Pricing Disclosure Package and the Prospectus; (iii)
no stop order shall have been issued under the Securities Act and
no proceedings therefor shall have been initiated or threatened by
the Commission; and (iv) the Registration Statement, the Pricing
Disclosure Package and the Prospectus and any amendments or
supplements thereto shall contain all material statements which are
required to be stated therein in accordance with the Securities Act
and the Securities Act Regulations and shall conform in all
material respects to the requirements of the Securities Act and the
Securities Act Regulations, and neither the Registration Statement,
the Pricing Disclosure Package nor the Prospectus nor any amendment
or supplement thereto shall contain any untrue statement of a
material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not
misleading.
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4.6 Delivery
of Agreements.
4.6.1 Lock-Up
Agreements. On or before the
date of this Agreement, the Company shall have delivered to the
Representatives executed copies of the Lock-Up Agreements from each
of the persons listed in Schedule 3
hereto.
4.6.2 Representatives’
Warrant Agreement. On the
Closing Date, the Company shall have delivered to the
Representatives executed copies of the Representatives’
Warrant Agreement.
4.7 Additional
Documents. At the Closing Date
and at each Option Closing Date (if any) Representative Counsel
shall have been furnished with such documents and opinions as they
may reasonably require for the purpose of enabling Representative
Counsel to deliver an opinion to the Underwriters, or in order to
evidence the accuracy of any of the representations or warranties,
or the fulfillment of any of the conditions, herein contained; and
all proceedings taken by the Company in connection with the
issuance and sale of the Public Securities and the
Representatives’ Securities as herein contemplated shall be
satisfactory in form and substance to the Representatives and
Representative Counsel.
5.1.1 General.
Subject to the conditions set forth below, the Company agrees to
indemnify and hold harmless each Underwriter, its affiliates and
each of its and their respective directors, officers, members,
employees, representatives and agents and each person, if any, who
controls any such Underwriter within the meaning of Section 15 of
the Securities Act or Section 20 of the Exchange Act (collectively
the “Underwriter Indemnified Parties,” and each an
“Underwriter Indemnified Party”), against any and all
loss, liability, claim, damage and expense whatsoever (including
but not limited to any and all legal or other expenses reasonably
incurred in investigating, preparing or defending against any
litigation, commenced or threatened, or any claim whatsoever,
whether arising out of any action between any of the Underwriter
Indemnified Parties and the Company or between any of the
Underwriter Indemnified Parties and any third party, or otherwise)
to which they or any of them may become subject under the
Securities Act, the Exchange Act or any other statute or at common
law or otherwise or under the laws of foreign countries, arising
out of or based upon any untrue statement or alleged untrue
statement of a material fact contained in (i) the Registration
Statement, the Pricing Disclosure Package, the Preliminary
Prospectus, the Prospectus, or in any Issuer Free Writing
Prospectus or in any Written Testing-the-Waters Communication (as
from time to time each may be amended and supplemented); (ii) any
materials or information provided to investors by, or with the
approval of, the Company in connection with the marketing of the
Offering, including any “road show” or investor
presentations made to investors by the Company (whether in person
or electronically); or (iii) any application or other document or
written communication (in this Section 5, collectively called
“application”) executed by the Company or based upon
written information furnished by the Company in any jurisdiction in
order to qualify the Public Securities and Representatives’
Securities under the securities laws thereof or filed with the
Commission, any state securities commission or agency, the Exchange
or any other national securities exchange; or the omission or
alleged omission therefrom of a material fact required to be stated
therein or necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading,
unless such statement or omission was made in reliance upon, and in
conformity with, the Underwriters’ Information. With respect
to any untrue statement or omission or alleged untrue statement or
omission made in the Pricing Disclosure Package, the indemnity
agreement contained in this Section 5.1.1
shall not inure to the benefit of any
Underwriter Indemnified Party to the extent that any loss,
liability, claim, damage or expense of such Underwriter Indemnified
Party results from the fact that a copy of the Prospectus was not
given or sent to the person asserting any such loss, liability,
claim or damage at or prior to the written confirmation of sale of
the Public Securities to such person as required by the Securities
Act and the Securities Act Regulations, and if the untrue statement
or omission has been corrected in the Prospectus, unless such
failure to deliver the Prospectus was a result of non-compliance by
the Company with its obligations under Section 3.3
hereof.
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5.1.2 Procedure.
If any action is brought against an Underwriter Indemnified Party
in respect of which indemnity may be sought against the Company
pursuant to Section 5.1.1,
such Underwriter Indemnified Party shall promptly notify the
Company in writing of the institution of such action and the
Company shall assume the defense of such action, including the
employment and fees of counsel (subject to the reasonable approval
of such Underwriter Indemnified Party) and payment of actual
expenses. Such Underwriter Indemnified Party shall have the right
to employ its or their own counsel in any such case, but the fees
and expenses of such counsel shall be at the expense of such
Underwriter Indemnified Party unless (i) the employment of such
counsel at the expense of the Company shall have been authorized in
writing by the Company in connection with the defense of such
action, or (ii) the Company shall not have employed counsel to have
charge of the defense of such action, or (iii) such indemnified
party or parties shall have reasonably concluded that there may be
defenses available to it or them which are different from or
additional to those available to the Company (in which case the
Company shall not have the right to direct the defense of such
action on behalf of the indemnified party or parties), in any of
which events the reasonable fees and expenses of not more than one
additional firm of attorneys selected by the Underwriter
Indemnified Party (in addition to local counsel) shall be borne by
the Company. Notwithstanding anything to the contrary contained
herein, if any Underwriter Indemnified Party shall assume the
defense of such action as provided above, the Company shall have
the right to approve the terms of any settlement of such action,
which approval shall not be unreasonably
withheld.
5.2 Indemnification
of the Company. Each
Underwriter, severally and not jointly, agrees to indemnify and
hold harmless the Company, its directors, its officers who signed
the Registration Statement and persons who control the Company
within the meaning of Section 15 of the Securities Act or Section
20 of the Exchange Act against any and all loss, liability, claim,
damage and expense described in the foregoing indemnity from the
Company to the several Underwriters, as incurred, but only with
respect to untrue statements or omissions, or alleged untrue
statements or omissions made in the Registration Statement, any
Preliminary Prospectus, the Pricing Disclosure Package or
Prospectus or any amendment or supplement thereto or in any
application, in reliance upon, and in strict conformity with, the
Underwriters’ Information. In case any action shall be
brought against the Company or any other person so indemnified
based on any Preliminary Prospectus, the Registration Statement,
the Pricing Disclosure Package or Prospectus or any amendment or
supplement thereto or any application, and in respect of which
indemnity may be sought against any Underwriter, such Underwriter
shall have the rights and duties given to the Company, and the
Company and each other person so indemnified shall have the rights
and duties given to the several Underwriters by the provisions of
Section 5.1.2. The
Company agrees promptly to notify the Representatives of the
commencement of any litigation or proceedings against the Company
or any of its officers, directors or any person, if any, who
controls the Company within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act, in connection
with the issuance and sale of the Public Securities or in
connection with the Registration Statement, the Pricing Disclosure
Package, the Prospectus, or any Issuer Free Writing Prospectus or
any Written Testing-the-Waters Communication.
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5.3.1 Contribution
Rights. If the indemnification
provided for in this Section 5 shall for any reason be unavailable
to or insufficient to hold harmless an indemnified party under
Section 5.1 or 5.2 in
respect of any loss, claim, damage or liability, or any action in
respect thereof, referred to therein, then each indemnifying party
shall, in lieu of indemnifying such indemnified party, contribute
to the amount paid or payable by such indemnified party as a result
of such loss, claim, damage or liability, or action in respect
thereof, (i) in such proportion as shall be appropriate to reflect
the relative benefits received by the Company, on the one hand, and
the Underwriters, on the other, from the Offering of the Public
Securities, or (ii) if the allocation provided by clause (i) above
is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to
in clause (i) above but also the relative fault of the Company, on
the one hand, and the Underwriters, on the other, with respect to
the statements or omissions that resulted in such loss, claim,
damage or liability, or action in respect thereof, as well as any
other relevant equitable considerations. The relative benefits
received by the Company, on the one hand, and the Underwriters, on
the other, with respect to such Offering shall be deemed to be in
the same proportion as the total net proceeds from the Offering of
the Public Securities purchased under this Agreement (before
deducting expenses) received by the Company, as set forth in the
table on the cover page of the Prospectus, on the one hand, and the
total underwriting discounts and commissions received by the
Underwriters with respect to the shares of the Common Stock
purchased under this Agreement, as set forth in the table on the
cover page of the Prospectus, on the other hand. The relative fault
shall be determined by reference to whether the untrue or alleged
untrue statement of a material fact or omission or alleged omission
to state a material fact relates to information supplied by the
Company or the Underwriters, the intent of the parties and their
relative knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Company and the
Underwriters agree that it would not be just and equitable if
contributions pursuant to this Section 5.3.1
were to be determined by pro rata
allocation (even if the Underwriters were treated as one entity for
such purpose) or by any other method of allocation that does not
take into account the equitable considerations referred to herein.
The amount paid or payable by an indemnified party as a result of
the loss, claim, damage or liability, or action in respect thereof,
referred to above in this Section 5.3.1
shall be deemed to include, for
purposes of this Section 5.3.1, any
legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action
or claim. Notwithstanding the provisions of this Section
5.3.1 in
no event shall an Underwriter be required to contribute any amount
in excess of the amount by which the total underwriting discounts
and commissions received by such Underwriter with respect to the
Offering of the Public Securities exceeds the amount of any damages
that such Underwriter has otherwise been required to pay by reason
of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) shall be
entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.
5.3.2 Contribution
Procedure. Within fifteen (15)
days after receipt by any party to this Agreement (or its
representative) of notice of the commencement of any action, suit
or proceeding, such party will, if a claim for contribution in
respect thereof is to be made against another party
(“contributing party”), notify the contributing party
of the commencement thereof, but the failure to so notify the
contributing party will not relieve it from any liability which it
may have to any other party other than for contribution hereunder.
In case any such action, suit or proceeding is brought against any
party, and such party notifies a contributing party or its
representative of the commencement thereof within the aforesaid 15
days, the contributing party will be entitled to participate
therein with the notifying party and any other contributing party
similarly notified. Any such contributing party shall not be liable
to any party seeking contribution on account of any settlement of
any claim, action or proceeding affected by such party seeking
contribution on account of any settlement of any claim, action or
proceeding affected by such party seeking contribution without the
written consent of such contributing party. The contribution
provisions contained in this Section 5.3.2
are intended to supersede, to the
extent permitted by law, any right to contribution under the
Securities Act, the Exchange Act or otherwise available. Each
Underwriter’s obligations to contribute pursuant to this
Section 5.3 are
several and not joint.
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6.1 Default
Not Exceeding 10% of Firm Shares or Option
Shares. If any Underwriter or
Underwriters shall default in its or their obligations to purchase
the Firm Shares or the Option Shares, if the Over-allotment Option
is exercised hereunder, and if the number of the Firm Shares or
Option Shares with respect to which such default relates does not
exceed in the aggregate 10% of the number of Firm Shares or Option
Shares that all Underwriters have agreed to purchase hereunder,
then such Firm Shares or Option Shares to which the default relates
shall be purchased by the non-defaulting Underwriters in proportion
to their respective commitments hereunder.
6.2 Default
Exceeding 10% of Firm Shares or Option Shares. In the event that the default addressed in
Section 6.1 relates to more than 10% of the Firm Shares or
Option Shares, the Representatives may in their discretion arrange
for themselves or for another party or parties to purchase such
Firm Shares or Option Shares to which such default relates on the
terms contained herein. If, within one (1) Business Day after such
default relating to more than 10% of the Firm Shares or Option
Shares, the Representatives do not arrange for the purchase of such
Firm Shares or Option Shares, then the Company shall be entitled to
a further period of one (1) Business Day within which to procure
another party or parties reasonably satisfactory to the
Representatives to purchase said Firm Shares or Option Shares on
such terms. In the event that neither the Representatives nor the
Company arrange for the purchase of the Firm Shares or Option
Shares to which a default relates as provided in this Section 6,
this Agreement will automatically be terminated by the
Representatives or the Company without liability on the part of the
Company (except as provided in Sections 3.8
and 5
hereof) or the several Underwriters
(except as provided in Section 5
hereof); provided, however, that if
such default occurs with respect to the Option Shares, this
Agreement will not terminate as to the Firm Shares; and provided,
further, that nothing herein shall relieve a defaulting Underwriter
of its liability, if any, to the other Underwriters and to the
Company for damages occasioned by its default
hereunder.
6.3 Postponement
of Closing Date. In the event
that the Firm Shares or Option Shares to which the default relates
are to be purchased by the non-defaulting Underwriters, or are to
be purchased by another party or parties as aforesaid, the
Representatives or the Company shall have the right to postpone the
Closing Date or Option Closing Date for a reasonable period, but
not in any event exceeding five (5) Business Days, in order to
effect whatever changes may thereby be made necessary in the
Registration Statement, the Pricing Disclosure Package or the
Prospectus or in any other documents and arrangements, and the
Company agrees to file promptly any amendment to the Registration
Statement, the Pricing Disclosure Package or the Prospectus that in
the opinion of counsel for the Underwriter may thereby be made
necessary. The term “Underwriter” as used in this
Agreement shall include any party substituted under this
Section 6 with
like effect as if it had originally been a party to this Agreement
with respect to such shares of Common Stock.
7. Additional
Covenants.
7.1 Board
Composition and Board Designations. The Company shall ensure that: (i) the
qualifications of the persons serving as members of the Board of
Directors and the overall composition of the Board comply with the
▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act, with the Exchange Act and with the listing
rules of the Exchange or any other national securities exchange, as
the case may be, in the event the Company seeks to have its Public
Securities listed on another exchange or quoted on an automated
quotation system, and (ii) if applicable, at least one member of
the Audit Committee of the Board of Directors qualifies as an
“audit committee financial expert,” as such term is
defined under Regulation S-K and the listing rules of the
Exchange.
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7.2 Prohibition
on Press Releases and Public Announcements. The Company shall not issue press releases or
engage in any other publicity, without the Representatives’
prior written consent (which consent shall not be unreasonably
withheld), for a period ending at 5:00 p.m., Eastern time, on the
first (1st)
Business Day following the forty-fifth (45th)
day after the Closing Date, other than normal and customary
releases issued in the ordinary course of the Company’s
business.
8. Effective
Date of this Agreement and Termination Thereof.
8.1 Effective
Date. This Agreement shall
become effective when both the Company and the Representatives have
executed the same and delivered counterparts of such signatures to
the other party.
8.2 Termination.
The Representatives shall have the right to terminate this
Agreement at any time prior to any Closing Date, (i) if any
domestic or international event or act or occurrence has materially
disrupted, or in your reasonable opinion will in the immediate
future materially disrupt, general securities markets in the United
States; or (ii) if trading on the New York Stock Exchange or the
Nasdaq Stock Market LLC shall have been suspended or materially
limited, or minimum or maximum prices for trading shall have been
fixed, or maximum ranges for prices for securities shall have been
required by FINRA or by order of the Commission or any other
government authority having jurisdiction; or (iii) if the United
States shall have become involved in a new war or an increase in
major hostilities; or (iv) if a banking moratorium has been
declared by a New York State or federal authority; or (v) if a
moratorium on foreign exchange trading has been declared which
materially adversely impacts the United States securities markets;
or (vi) if the Company shall have sustained a material loss by
fire, flood, accident, hurricane, earthquake, theft, sabotage or
other calamity or malicious act which, whether or not such loss
shall have been insured, will, in your reasonable opinion, make it
inadvisable to proceed with the delivery of the Firm Shares or
Option Shares; or (vii) if the Company is in material breach of any
of its representations, warranties or covenants hereunder; or
(viii) if the Representatives shall have become aware after the
date hereof of such a material adverse change in the conditions or
prospects of the Company, or such adverse material change in
general market conditions as in the Representatives’
reasonable judgment would make it impracticable to proceed with the
offering, sale and/or delivery of the Public Securities or to
enforce contracts made by the Underwriters for the sale of the
Public Securities.
8.3 Expenses.
Notwithstanding anything to the contrary in this Agreement, except
in the case of a default by the Underwriters, pursuant to
Section 6.2 above,
in the event that this Agreement shall not be carried out for any
reason whatsoever, within the time specified herein or any
extensions thereof pursuant to the terms herein, the Company shall
be obligated to pay to the Underwriters their actual and
accountable out-of-pocket expenses related to the transactions
contemplated herein then due and payable (including the fees and
disbursements of Representative Counsel) up to $75,000, inclusive
of any advance for non-accountable expenses previously paid by the
Company to the Representatives (the “Advance”) and upon
demand the Company shall pay the full amount thereof to the
Representatives on behalf of the Underwriters; provided, however,
that such expense cap in no way limits or impairs the
indemnification and contribution provisions of this Agreement.
Notwithstanding the foregoing, any advance received by the
Representatives will be reimbursed to the Company to the extent not
actually incurred in compliance with FINRA Rule
5110(f)(2)(C).
-33-
8.4 Indemnification.
Notwithstanding any contrary provision contained in this Agreement,
any election hereunder or any termination of this Agreement, and
whether or not this Agreement is otherwise carried out, the
provisions of Section 5 shall
remain in full force and effect and shall not be in any way
affected by, such election or termination or failure to carry out
the terms of this Agreement or any part hereof.
8.5 Representations,
Warranties, Agreements to Survive. All representations, warranties and agreements
contained in this Agreement or in certificates of officers of the
Company submitted pursuant hereto, shall remain operative and in
full force and effect regardless of (i) any investigation made by
or on behalf of any Underwriter or its Affiliates or selling
agents, any person controlling any Underwriter, its officers or
directors or any person controlling the Company or (ii) delivery of
and payment for the Public Securities.
9. Miscellaneous.
9.1 Notices.
All communications hereunder, except as herein otherwise
specifically provided, shall be in writing and shall be mailed
(registered or certified mail, return receipt requested),
personally delivered or sent by facsimile transmission and
confirmed and shall be deemed given when so delivered or faxed and
confirmed or if mailed, two (2) days after such
mailing.
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If to the
Representatives:
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WallachBeth
Capital, LLC
▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇
▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn:
Fax No.:
[●]
and
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Network 1 Financial
Securities, Inc.
▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇
▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn:
Fax
No.: [●]
with a
copy (which shall not constitute notice) to:
Cozen
▇’▇▇▇▇▇▇
▇▇▇ ▇.
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq. and ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
Esq.
Fax
No.: (▇▇▇) ▇▇▇-▇▇▇▇
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-34-
If to
the Company:
▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇
Biotechnology Incubator
▇▇▇▇▇
▇▇▇
▇▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇
Attention: Johan M.
(Thijs) ▇▇▇▇▇, President
Fax No:
[●]
with a
copy (which shall not constitute notice) to:
Loeb
& Loeb LLP
▇▇▇
▇▇▇▇ ▇▇▇▇▇▇
▇▇▇
▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇
▇▇▇▇▇▇▇, Esq. and ▇▇▇▇▇ ▇▇▇▇▇▇ , Esq.
Fax No:
(▇▇▇) ▇▇▇-▇▇▇▇
9.2 Headings.
The headings contained herein are for the sole purpose of
convenience of reference, and shall not in any way limit or affect
the meaning or interpretation of any of the terms or provisions of
this Agreement.
9.3 Amendment.
This Agreement may only be amended by a written instrument executed
by each of the parties hereto.
9.4 Entire
Agreement. This Agreement
(together with the other agreements and documents being delivered
pursuant to or in connection with this Agreement) constitutes the
entire agreement of the parties hereto with respect to the subject
matter hereof and thereof, and supersedes all prior agreements and
understandings of the parties, oral and written, with respect to
the subject matter hereof. Notwithstanding anything to the contrary
set forth herein, it is understood and agreed by the parties hereto
that all other terms and conditions of that certain engagement
letter among the Company, WallachBeth Capital, LLC and Network 1
Financial Securities, Inc., dated July 11, 2016, shall remain in
full force and effect.
9.5 Binding
Effect. This Agreement shall
inure solely to the benefit of and shall be binding upon the
Representatives, the Underwriters, the Company and the controlling
persons, directors and officers referred to in Section
5
hereof, and their respective
successors, legal representatives, heirs and assigns, and no other
person shall have or be construed to have any legal or equitable
right, remedy or claim under or in respect of or by virtue of this
Agreement or any provisions herein contained. The term
“successors and assigns” shall not include a purchaser,
in its capacity as such, of securities from any of the
Underwriters.
-35-
9.6 Governing
Law; Consent to Jurisdiction; Trial by Jury. This Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of
New York, without giving effect to conflict of laws principles
thereof. The Company hereby agrees that any action, proceeding or
claim against it arising out of, or relating in any way to this
Agreement shall be brought and enforced in the New York Supreme
Court, County of New York, or in the United States District Court
for the Southern District of New York, and irrevocably submits to
such jurisdiction, which jurisdiction shall be exclusive. The
Company hereby waives any objection to such exclusive jurisdiction
and that such courts represent an inconvenient forum. Any such
process or summons to be served upon the Company may be served by
transmitting a copy thereof by registered or certified mail, return
receipt requested, postage prepaid, addressed to it at the address
set forth in Section 9.1 hereof. Such mailing shall be deemed personal
service and shall be legal and binding upon the Company in any
action, proceeding or claim. The Company agrees that the prevailing
party(ies) in any such action shall be entitled to recover from the
other party(ies) all of its reasonable attorneys’ fees and
expenses relating to such action or proceeding and/or incurred in
connection with the preparation therefor. The Company (on its
behalf and, to the extent permitted by applicable law, on behalf of
its stockholders and affiliates) and each of the Underwriters
hereby irrevocably waives, to the fullest extent permitted by
applicable law, any and all right to trial by jury in any legal
proceeding arising out of or relating to this Agreement or the
transactions contemplated hereby.
9.7 Execution
in Counterparts. This Agreement
may be executed in one or more counterparts, and by the different
parties hereto in separate counterparts, each of which shall be
deemed to be an original, but all of which taken together shall
constitute one and the same agreement, and shall become effective
when one or more counterparts has been signed by each of the
parties hereto and delivered to each of the other parties hereto.
Delivery of a signed counterpart of this Agreement by facsimile or
email/pdf transmission shall constitute valid and sufficient
delivery thereof.
9.8 Waiver,
etc. The failure of any of the
parties hereto to at any time enforce any of the provisions of this
Agreement shall not be deemed or construed to be a waiver of any
such provision, nor to in any way effect the validity of this
Agreement or any provision hereof or the right of any of the
parties hereto to thereafter enforce each and every provision of
this Agreement. No waiver of any breach, non-compliance or
non-fulfillment of any of the provisions of this Agreement shall be
effective unless set forth in a written instrument executed by the
party or parties against whom or which enforcement of such waiver
is sought; and no waiver of any such breach, non-compliance or
non-fulfillment shall be construed or deemed to be a waiver of any
other or subsequent breach, non-compliance or
non-fulfillment.
[Signature Page
Follows]
-36-
If the
foregoing correctly sets forth the understanding between the
Underwriters and the Company, please so indicate in the space
provided below for that purpose, whereupon this letter shall
constitute a binding agreement between us.
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Very truly
yours,
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By:
Name:
Title:
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Confirmed
as of the date first written above mentioned,
on
behalf of itself and as Representatives of the several
Underwriters
named on Schedule 1
hereto:
WALLACHBETH
CAPITAL, LLC
By:
Name:
Name:
Title:
NETWORK
1 FINANCIAL SECURITIES, INC.
By:
Name:
Title:
[SIGNATURE
PAGE]
-37-
SCHEDULE 1
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Underwriter
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Total Number of
Firm Shares to be
Purchased
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Number of Additional Shares to be Purchased if the Over-Allotment
Option is Fully Exercised
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WallachBeth
Capital, LLC
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Network
1 Financial Securities, Inc.
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TOTAL
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SCHEDULE 2-A
Pricing Information
Number
of Firm Shares: [●]
Number
of Option Shares: [●]
Public
Offering Price per Share: $[●]
Underwriting
Discount per Share: $[●]
Underwriting
Non-accountable expense allowance per Share:
$[●]
Proceeds to Company
per Share (before expenses): $[●]
SCHEDULE 2-B
Issuer General Use Free Writing Prospectuses
[None.]
SCHEDULE 2-C
Written Testing-the-Waters Communications
None.
SCHEDULE 3
List of Lock-Up Parties
Johan
M. (Thijs) ▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇▇▇
Pelican
Partners LLC
▇▇▇▇▇
▇▇▇▇▇▇▇
▇▇▇▇▇▇▇
▇▇▇▇▇▇▇
ADEC
Private Equity Investment, LLC
EBR
Ventures, LLC
SCHEDULE 4
Subsidiaries and Affiliates
AzurRx
BioPharma SAS
EXHIBIT A
Form of Representatives’ Warrant Agreement
EXHIBIT B
Form
of Lock-Up Agreement
[●],
2016
WallachBeth
Capital, LLC
Network
1 Financial Securities, Inc.
As
Representatives of the several Underwriters named on Schedule 1
attached hereto
c/o
WallachBeth Capital, LLC
▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇
▇▇▇▇, ▇▇ ▇▇▇▇▇
c/o
Network 1 Financial Securities, Inc.
▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇
▇▇▇▇, ▇▇ ▇▇▇▇▇
Ladies
and Gentlemen:
The
undersigned understands that you, as representatives (the
“Representatives”), propose to
enter into an Underwriting Agreement (the “Underwriting Agreement”) with
AzurRx BioPharma, Inc., a Delaware corporation (the
“Company”),
providing for the public offering (the “Public Offering”) of shares of
common stock, par value $0.0001 per share, of the Company (the
“Shares”).
To
induce the Representatives to continue its efforts in connection
with the Public Offering, the undersigned hereby agrees that,
without the prior written consent of the Representatives, the
undersigned will not, during the period commencing on the date
hereof and ending 180 days after the date of the final prospectus
(the “Prospectus”) relating to the
Public Offering (the “Lock-Up
Period”), (1) offer, pledge, sell, contract to sell,
grant, lend, or otherwise transfer or dispose of, directly or
indirectly, any Shares or any securities convertible into or
exercisable or exchangeable for Shares, whether now owned or
hereafter acquired by the undersigned or with respect to which the
undersigned has or hereafter acquires the power of disposition
(collectively, the “Lock-Up
Securities”); (2) enter into any swap or other
arrangement that transfers to another, in whole or in part, any of
the economic consequences of ownership of the Lock-Up Securities,
whether any such transaction described in clause (1) or (2) above
is to be settled by delivery of Lock-Up Securities, in cash or
otherwise; (3) make any demand for or exercise any right with
respect to the registration of any Lock-Up Securities; or (4)
publicly disclose the intention to make any offer, sale, pledge or
disposition, or to enter into any transaction, swap, hedge or other
arrangement relating to any Lock-Up Securities. Notwithstanding the
foregoing, and subject to the conditions below, the undersigned may
transfer Lock-Up Securities without the prior written consent of
the Representatives in connection with (a) transactions relating to
Lock-Up Securities acquired in open market transactions after the
completion of the Public Offering; provided that no filing under
Section 16(a) of the Securities Exchange Act of 1934, as amended
(the “Exchange
Act”), shall be required or shall be voluntarily made
in connection with subsequent sales of Lock-Up Securities acquired
in such open market transactions; (b) transfers of Lock-Up
Securities as a bona fide
gift, by will or intestacy or to a family member or trust for the
benefit of a family member (for purposes of this lock-up agreement,
“family member” means any relationship by blood,
marriage or adoption, not more remote than first cousin); (c)
transfers of Lock-Up Securities to a charity or educational
institution; (d) if the undersigned, directly or indirectly,
controls a corporation, partnership, limited liability company or
other business entity, any transfers of Lock-Up Securities to any
shareholder, partner or member of, or owner of similar equity
interests in, the undersigned, as the case may be, (e) if required
by the terms of a qualified domestic relations order; provided that in the case of
any transfer pursuant to the foregoing clauses (b), (c) or (d), (i)
any such transfer shall not involve a disposition for value, (ii)
each transferee shall sign and deliver to the Representatives a
lock-up agreement substantially in the form of this lock-up
agreement and (iii) no filing under Section 16(a) of the Exchange
Act shall be required or shall be voluntarily made. The undersigned
also agrees and consents to the entry of stop transfer instructions
with the Company’s transfer agent and registrar against the
transfer of the undersigned’s Lock-Up Securities except in
compliance with this lock-up agreement.
If (i)
during the last 17 days of the Lock-Up Period, the Company issues
an earnings release or material news or a material event relating
to the Company occurs, or (ii) prior to the expiration of the
Lock-Up Period, the Company announces that it will release earnings
results or becomes aware that material news or a material event
will occur during the 16-day period beginning on the last day of
the Lock-Up Period, the restrictions imposed by this lock-up
agreement shall continue to apply until the expiration of the
18-day period beginning on the issuance of the earnings release or
the occurrence of such material news or material event, as
applicable, unless the Representatives waive, in writing, such
extension; provided, however, that this extension of the Lock-Up
Period shall not apply to the extent that FINRA has amended or
repealed NASD Rule 2711(f)(4), or has otherwise provided written
interpretive guidance regarding such rule, in each case, so as to
eliminate the prohibition of any broker, dealer, or member of a
national securities association from publishing or distributing any
research report, with respect to the securities of an Emerging
Growth Company prior to or after the expiration of any agreement
between the broker, dealer, or member of a national securities
association and the Emerging Growth Company or its shareholders
that restricts or prohibits the sale of securities held by the
Emerging Growth Company or its shareholders after the initial
public offering date.
The
undersigned agrees that, prior to engaging in any transaction or
taking any other action that is subject to the terms of this
lock-up agreement during the period from the date hereof to and
including the 34th day following the expiration of the initial
Lock-Up Period, the undersigned will give notice thereof to the
Company and will not consummate any such transaction or take any
such action unless it has received written confirmation from the
Company that the Lock-Up Period (as may have been extended pursuant
to the previous paragraph) has expired.
The
Representatives agree that, at least three (3) business days before
the effective date of any release or waiver of the foregoing
restrictions in connection with a transfer of Lock-Up Securities,
the Representatives will notify the Company of the impending
release or waiver; and the Company has agreed in the Underwriting
Agreement to announce the impending release or waiver by press
release through a major news service at least two (2) business days
before the effective date of the release or waiver. Any release or
waiver granted by the Representatives hereunder to any such officer
or director shall only be effective two (2) business days after the
publication date of such press release. The provisions of this
paragraph will not apply if (a) the release or waiver is effected
solely to permit a transfer of Lock-Up Securities not for
consideration and (b) the transferee has agreed in writing to be
bound by the same terms described in this lock-up agreement to the
extent and for the duration that such terms remain in effect at the
time of such transfer.
No
provision in this agreement shall be deemed to restrict or prohibit
the exercise, exchange or conversion by the undersigned of any
securities exercisable or exchangeable for or convertible into
Shares, as applicable; provided that the undersigned does not
transfer the Shares acquired on such exercise, exchange or
conversion during the Lock-Up Period, unless otherwise permitted
pursuant to the terms of this lock-up agreement. In addition, no
provision herein shall be deemed to restrict or prohibit the entry
into or modification of a so-called “10b5-1” plan at
any time (other than the entry into or modification of such a plan
in such a manner as to cause the sale of any Lock-Up Securities
within the Lock-Up Period).
The
undersigned understands that the Company and the Representatives
are relying upon this lock-up agreement in proceeding toward
consummation of the Public Offering. The undersigned further
understands that this lock-up agreement is irrevocable and shall be
binding upon the undersigned’s heirs, legal representatives,
successors and assigns.
The
undersigned understands that, if the Underwriting Agreement is not
executed by [●], 2016, or if the Underwriting Agreement
(other than the provisions thereof which survive termination) shall
terminate or be terminated prior to payment for and delivery of the
Shares to be sold thereunder, then this lock-up agreement shall be
void and of no further force or effect.
Whether
or not the Public Offering actually occurs depends on a number of
factors, including market conditions. Any Public Offering will only
be made pursuant to an Underwriting Agreement, the terms of which
are subject to negotiation between the Company and the
Representatives.
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Very truly
yours,
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(Name - Please
Print)
(Signature)
(Name
of Signatory, in the case of entities - Please Print)
(Title
of Signatory, in the case of entities - Please Print)
Address:
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EXHIBIT C
Form
of Press Release
[COMPANY]
[Date]
[COMPANY] (the
“Company”) announced today that WallachBeth Capital,
LLC and Network 1 Financial Securities, Inc., acting as
representatives for the underwriters in the Company’s recent
public offering of _______ shares of the Company’s common
stock, is [waiving] [releasing] a lock-up restriction with respect
to _________ shares of the Company’s common stock held by
[certain officers or directors] [an officer or director] of the
Company. The [waiver] [release] will take effect on _________,
20___, and the shares may be sold on or after such
date.
This press release is not an offer or sale of
the securities in the United States or in any other jurisdiction
where such offer or sale is prohibited, and such securities may not
be offered or sold in the United States absent registration or an
exemption from registration under the Securities Act of 1933, as
amended.
EXHIBIT D
Form
of Opinion of Counsel