CELLULAR BIOMEDICINE GROUP, INC. 1,029,412 Shares of Common Stock (par value $0.001 per share) Underwriting Agreement
Exhibit 1.1
1,029,412 Shares of Common Stock
(par value $0.001 per share)
March
21, 2019
Cantor
▇▇▇▇▇▇▇▇▇▇ & Co.
▇▇▇▇▇▇
▇. ▇▇▇▇▇ & Co. Incorporated
As
Representatives of the several Underwriters listed in Schedule A hereto
c/o
Cantor ▇▇▇▇▇▇▇▇▇▇ & Co.
▇▇▇
▇▇▇▇ ▇▇▇▇▇▇
▇▇▇
▇▇▇▇, ▇▇ ▇▇▇▇▇
c/o
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & Co. Incorporated
▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Ladies
and Gentlemen:
Cellular
Biomedicine Group, Inc., a Delaware corporation (the
“Company”),
proposes to issue and sell to the several underwriters named in
Schedule A (the
“Underwriters”)
an aggregate of 1,029,412 shares of its common stock, par value
$0.001 per share (the “Shares”). The 1,029,412 Shares to
be sold by the Company are called the “Firm Shares.” In addition, the
Company has granted to the Underwriters an option to purchase up to
an additional 154,411 Shares pursuant to such option are
collectively called the “Option Shares.” The Firm Shares
and, if and to the extent such option is exercised, the Option
Shares, are collectively called the “Offered Shares.” Cantor ▇▇▇▇▇▇▇▇▇▇
& Co. (“Cantor”) and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ &
Co. Incorporated (“Baird”) have agreed to act as
representatives of the several Underwriters (in such capacity, the
“Representatives”) in connection
with the offering and sale of the Offered Shares. To the extent
there are no additional underwriters listed on Schedule A, the term
“Representatives” as used herein shall mean Cantor and
Baird as Underwriters, and the term “Underwriters”
shall mean either the singular or the plural, as the context
requires.
The
Company has prepared and filed with the Securities and Exchange
Commission (the “Commission”) a shelf registration
statement on Form S-3, File No. 333-210337, including a
base prospectus (the “Base
Prospectus”) to be used in connection with the public
offering and sale of the Offered Shares. Such registration
statement, as amended, including the financial statements, exhibits
and schedules thereto, in the form in which it became effective
under the Securities Act of 1933, and the rules and regulations
promulgated thereunder (collectively, the “Securities Act”), including all
documents incorporated or deemed to be incorporated by reference
therein and any information deemed to be a part thereof at the time
of effectiveness pursuant to Rule 430A or 430B under the
Securities Act, is called the “Registration Statement.” Any
registration statement filed by the Company pursuant to Rule 462(b)
under the Securities Act in connection with the offer and sale of
the Offered Shares is called the “Rule 462(b) Registration
Statement,” and from and after the date and time of
filing of any such Rule 462(b) Registration Statement the term
“Registration Statement” shall include the Rule 462(b)
Registration Statement. The preliminary prospectus supplement dated
March 20, 2019 describing the Offered Shares and the offering
thereof (the “Preliminary
Prospectus Supplement”), together with the Base
Prospectus, is called the “Preliminary Prospectus,” and the
Preliminary Prospectus and any other prospectus supplement to the
Base Prospectus in preliminary form that describes the Offered
Shares and the offering thereof and is used prior to the filing of
the Prospectus (as defined below), together with the Base
Prospectus, is called a “preliminary prospectus.” As used
herein, the term “Prospectus” shall mean the final
prospectus supplement to the Base Prospectus that describes the
Offered Shares and the offering thereof (the “Final Prospectus Supplement”),
together with the Base Prospectus, in the form first used by the
Underwriters to confirm sales of the Offered Shares or in the form first made
available to the Underwriters by the Company to meet requests of
purchasers pursuant to Rule 173 under the Securities
Act.
As used
herein, “Applicable
Time” is 8:30 a.m. (New York time) on March 21, 2019.
As used herein, “free writing
prospectus” has the meaning set forth in Rule 405
under the Securities Act, and “Time of Sale Prospectus” means the
Preliminary Prospectus, as amended or supplemented immediately
prior to the Applicable Time, together with the free writing
prospectuses, if any, identified on Schedule B hereto and the
pricing information set forth on Schedule C hereto. As used
herein, “Road
Show” means a “road show” (as defined in
Rule 433 under the Securities Act) relating to the offering of the
Offered Shares contemplated hereby that is a “written
communication” (as defined in Rule 405 under the Securities
Act). As used herein, “Marketing Materials” means any
materials or information provided to investors by, or with the
approval of, the Company in connection with the marketing of the
offering of the Offered Shares, including any Road Show or investor
presentations made to investors by the Company (whether in person
or electronically).
All
references in this Agreement to financial statements and schedules
and other information which are “contained,”
“included” or “stated” in, or “part
of” the Registration Statement, the Rule 462(b) Registration
Statement, the Preliminary Prospectus, any preliminary prospectus,
the Base Prospectus, the Time of Sale Prospectus or the Prospectus,
and all other references of like import, shall be deemed to mean
and include all such financial statements and schedules and other
information which is or is deemed to be incorporated by reference
in the Registration Statement, the Rule 462(b) Registration
Statement, the Preliminary Prospectus, any preliminary prospectus,
the Base Prospectus, the Time of Sale Prospectus or the Prospectus,
as the case may be.
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All
references in this Agreement to amendments or supplements to the
Registration Statement, the Preliminary Prospectus, any preliminary
prospectus, the Base Prospectus, the Time of Sale Prospectus or the
Prospectus shall be deemed to mean and include the filing of any
document under the Securities Exchange Act of 1934, and the rules
and regulations promulgated thereunder (collectively, the
“Exchange Act”)
that is or is deemed to be incorporated by reference in the
Registration Statement, the Preliminary Prospectus, any preliminary
prospectus, the Base Prospectus, or the Prospectus, as the case may
be.
All
references in this Agreement to (i) the Registration
Statement, the Preliminary Prospectus, any preliminary prospectus,
the Base Prospectus or the Prospectus, any amendments or
supplements to any of the foregoing, or any free writing
prospectus, shall include any copy thereof filed with the
Commission pursuant to its Electronic Data Gathering, Analysis and
Retrieval System (“▇▇▇▇▇”) and (ii) the
Prospectus shall be deemed to include any “electronic
Prospectus” provided for use in connection with the offering
of the Offered Shares as contemplated by Section 3(n).
In the
event that the Company has only one subsidiary, then all references
herein to “subsidiaries” of the Company shall be deemed
to refer to such single subsidiary, mutatis mutandis.
The
Company hereby confirms its agreements with the Underwriters as
follows:
1. Representations and Warranties of the
Company. The Company represents and warrants to each
Underwriter as of the date of this Agreement, the Applicable Time,
the First Closing Date (as hereinafter defined) and each Option
Closing Date (as hereinafter defined), if any, as
follows:
(a) Compliance with Registration
Requirements. The Registration Statement has become
effective under the Securities Act. The Company has complied, to
the Commission’s satisfaction, with all requests of the
Commission for additional or supplemental information, if any. No
stop order suspending the effectiveness of the Registration
Statement is in effect and no proceedings for such purpose have
been instituted or are pending or, to the best knowledge of the
Company, are contemplated or threatened by the Commission. At the
time the Company’s Annual Report on Form 10-K for the year
ended 2018 (the “Annual
Report”) was filed with the Commission, or, if later,
at the time the Registration Statement was originally filed with
the Commission, the Company met the then-applicable requirements
for use of Form S-3 under the Securities Act. The Company meets the
requirements for use of Form S-3 under the Securities Act specified
in FINRA Conduct Rule 5110(B)(7)(C)(i). The documents incorporated
or deemed to be incorporated by reference in the Registration
Statement, the Time of Sale Prospectus and the Prospectus, at the
time they were or hereafter are filed with the Commission, or
became effective under the Exchange Act, as the case may be,
complied and will comply in all material respects with the
requirements of the Exchange Act.
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(b) Disclosure. Each preliminary
prospectus and the Prospectus when filed complied in all material
respects with the Securities Act and, if filed by electronic
transmission pursuant to ▇▇▇▇▇, was identical (except as may be
permitted by Regulation S-T under the Securities Act) to the
copy thereof delivered to the Underwriters for use in connection
with the offer and sale of the Offered Shares. Each of the
Registration Statement and any post-effective amendment thereto, at
the time it became or becomes effective and at all subsequent
times, complied and will comply in all material respects with the
Securities Act and did not and will not contain any untrue
statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading. As of the Applicable Time, the Time of Sale
Prospectus did not, and at the time of each sale of the Offered
Shares and at the First Closing Date (as defined in Section 2), the
Time of Sale Prospectus, as then amended or supplemented by the
Company, if applicable, will not, contain any untrue statement of a
material fact or omit to state a material fact necessary to make
the statements therein, in the light of the circumstances under
which they were made, not misleading. The Prospectus, as of its
date and (as then amended or supplemented) at all subsequent times,
did not and will not contain any untrue statement of a material
fact or omit to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under
which they were made, not misleading. The representations and
warranties set forth in the three immediately preceding sentences
do not apply to statements in or omissions from the Registration
Statement or any post-effective amendment thereto, or the
Prospectus or the Time of Sale Prospectus, or any amendments or
supplements thereto, made in reliance upon and in conformity with
written information relating to any Underwriter furnished to the
Company in writing by the Representatives expressly for use
therein, it being understood and agreed that the only such
information consists of the information described in Section 9(b).
There are no contracts or other documents required to be described
in the Time of Sale Prospectus or the Prospectus or to be filed as
an exhibit to the Registration Statement which have not been
described or filed as required.
(c) Free Writing Prospectuses; Road
Show. As of the determination date referenced in Rule 164(h)
under the Securities Act, the Company was not, is not or will not
be (as applicable) an “ineligible issuer” in connection
with the offering of the Offered Shares pursuant to Rules 164, 405
and 433 under the Securities Act. Each free writing prospectus that
the Company is required to file pursuant to Rule 433(d) under the
Securities Act has been, or will be, filed with the Commission in
accordance with the requirements of the Securities Act. Each free
writing prospectus that the Company has filed, or is required to
file, pursuant to Rule 433(d) under the Securities Act or that was
prepared by or on behalf of or used or referred to by the Company
complies or will comply in all material respects with the
requirements of Rule 433 under the Securities Act, including timely
filing with the Commission or retention where required and
legending, and each such free writing prospectus, as of its issue
date and at all subsequent times through the completion of the
public offer and sale of the Offered Shares did not, does not and
will not include any information that conflicted, conflicts or will
conflict with the information contained in the Registration
Statement, the Prospectus or any preliminary prospectus and not
superseded or modified. Except for the free writing prospectuses,
if any, identified in Schedule B, and electronic road
shows, if any, furnished to the Representatives before first use,
the Company has not prepared, used or referred to, and will not,
without the Representatives’ prior written consent, prepare,
use or refer to, any free writing prospectus. Each Road Show, when
considered together with the Time of Sale Prospectus, does not
contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not
misleading.
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(d) Market Capitalization. At the
time the Registration Statement was originally declared effective,
and at the time the Company’s most recent Annual Report on
Form 10-K was filed with the Commission, the Company met the then
applicable requirements for the use of Form S-3 under the
Securities Act, including General Instruction I.B.1 of Form S-3.
The Company satisfies the pre-1992 eligibility requirements for the
use of a registration statement on Form S-3 in connection with this
offering (the pre-1992 eligibility requirements for the use of the
registration statement on Form S-3 include (i) having a
non-affiliate, public common equity float of at least $150 million
or a non-affiliate, public common equity float of at least $100
million and annual trading volume of at least three million shares
and (ii) having been subject to the Exchange Act reporting
requirements for a period of 36 months). The Company is not a shell
company (as defined in Rule 405 under the Securities Act) and has
not been a shell company for at least 12 calendar months previously
and if it has been a shell company at any time previously, has
filed current Form 10 information (as defined in Instruction I.B.6
of Form S-3) with the Commission at least 12 calendar months
previously reflecting its status as an entity that is not a shell
company.
(e) Distribution of Offering Material By
the Company. Prior to the later of (i) the expiration or
termination of the option granted to the several Underwriters in
Section 2 and (ii) the completion of the Underwriters’
distribution of the Offered Shares, the Company has not distributed
and will not distribute any offering material in connection with
the offering and sale of the Offered Shares other than the
Registration Statement, the Time of Sale Prospectus, the Prospectus
or any free writing prospectus reviewed and consented to by the
Representatives, and the free writing prospectuses, if any,
identified on Schedule
B.
(f) Financial Information. The
consolidated financial statements of the Company included or
incorporated by reference in the Registration Statement, the Time
of Sale Prospectus, the Prospectus, together with the related notes
and schedules, present fairly, in all material respects, the
consolidated financial position of the Company and the Subsidiaries
(as defined below) as of the dates indicated and the consolidated
results of operations, cash flows and changes in
stockholders’ equity of the Company for the periods specified
and have been prepared in compliance with the requirements of the
Securities Act and Exchange Act, as applicable, and in conformity
with GAAP (as defined below) applied on a consistent basis (except
(i) for such adjustments to accounting standards and practices as
are noted therein or (ii) in the case of unaudited interim
financial statements, to the extent that they may not include
certain footnotes or may be condensed or summary statements) during
the periods involved; the other financial and statistical data with
respect to the Company and the Subsidiaries (as defined below)
contained or incorporated by reference in the Registration
Statement, the Time of Sale Prospectus and the Prospectus, if any,
are accurately and fairly presented and prepared on a basis
consistent with the financial statements and books and records of
the Company; there are no financial statements (historical or pro
forma) that are required to be included or incorporated by
reference in the Registration Statement, the Time of Sale
Prospectus, or the Prospectus that are not included or incorporated
by reference as required; the Company and the Subsidiaries (as
defined below) do not have any material liabilities or obligations,
direct or contingent (including any off-balance sheet obligations),
not described in the Registration Statement (excluding the exhibits
thereto), the Time of Sale Prospectus and the Prospectus; and all
disclosures contained or incorporated by reference in the
Registration Statement, the Time of Sale Prospectus and the
Prospectus, if any, regarding “non-GAAP financial
measures” (as such term is defined by the rules and
regulations of the Commission) comply with Regulation G of the
Exchange Act and Item 10 of Regulation S-K under the Securities
Act, to the extent applicable. The financial data set forth in each
of the Registration Statement, the Time of Sale Prospectus and the
Prospectus under the captions “Prospectus Supplement
Summary—Summary Selected Financial Data,”
“Selected Financial Data” and
“Capitalization” fairly present the information set
forth therein on a basis consistent with that of the audited
financial statements contained in the Registration Statement, the
Time of Sale Prospectus and the Prospectus. The interactive data in
eXtensible Business Reporting Language included or incorporated by
reference in the Registration Statement and the Prospectus fairly
presents the information called for in all material respects and
has been prepared in accordance with the Commission’s rules
and guidelines applicable thereto.
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(g) Conformity with ▇▇▇▇▇ Filing.
The Preliminary Prospectus and Final Prospectus delivered to the
Underwriters for use in connection with the sale of the Offered
Shares pursuant to this Agreement will be identical to the versions
of the Preliminary Prospectus and Final Prospectus created to be
transmitted to the Commission for filing via ▇▇▇▇▇, except to the
extent permitted by Regulation S-T.
(h) Organization. The Company and
each of its Subsidiaries are duly organized, validly existing as a
corporation and in good standing under the Laws of their respective
jurisdictions of organization. The Company and each of its
Subsidiaries are duly licensed or qualified as a foreign
corporation for transaction of business and in good standing under
the Laws of each other jurisdiction in which their respective
ownership or lease of property or the conduct of their respective
businesses requires such license or qualification, and have all
corporate power and authority necessary to own or hold their
respective properties and to conduct their respective businesses as
described in the Registration Statement, the Time of Sale
Prospectus and the Prospectus, except where the failure to be so
qualified or in good standing or have such power or authority would
not, individually or in the aggregate, have a material adverse
effect or would reasonably be expected to have a material adverse
effect on the assets, business, operations, earnings, properties,
condition (financial or otherwise), prospects, stockholders’
equity or results of operations of the Company and the Subsidiaries
taken as a whole, or prevent or materially interfere with the
consummation of the transactions contemplated hereby (a
“Material Adverse
Effect”).
(i) Subsidiaries. The subsidiaries
set forth on Schedule
4 (collectively, the “Subsidiaries”),
are the Company’s only significant subsidiaries (as such term
is defined in Rule 1-02 of Regulation S-X promulgated by the
Commission). Except as set forth in the Registration Statement, the
Time of Sale Prospectus and the Prospectus, the Company owns,
directly or indirectly, all of the equity interests of the
Subsidiaries free and clear of any lien, charge, security interest,
encumbrance, right of first refusal or other restriction, and all
the equity interests of the Subsidiaries are validly issued and are
fully paid, nonassessable and free of preemptive and similar
rights. Other than as disclosed in the Registration Statement, the
Time of Sale Prospectus or Prospectus, no Subsidiary is currently
prohibited, directly or indirectly, from paying any dividends to
the Company, from making any other distribution on such
Subsidiary’s capital stock, from repaying to the Company any
loans or advances to such Subsidiary from the Company or from
transferring any of such Subsidiary’s property or assets to
the Company or any other Subsidiary of the Company.
(j) VIE Agreements. All material
agreements relating to our corporate structure have been disclosed
as the VIE agreements in the Registration Statement, the Time of
Sale Prospectus and the Prospectus. Each of the VIE agreements
described in the Registration Statement, the Time of Sale
Prospectus and the Prospectus constitutes
a legal, valid and binding obligation of the parties thereto,
enforceable in accordance with its terms, except as enforceability
may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws of general applicability
affecting creditors’ rights or by equitable principles
relating to enforceability.
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(k) No Violation or Default.
Neither the Company nor any of its Subsidiaries is (i) in
violation of its charter or by-laws or similar organizational
documents; (ii) in default, and no event has occurred that,
with notice or lapse of time or both, would constitute such a
default, in the due performance or observance of any term, covenant
or condition contained in any indenture, mortgage, deed of trust,
loan agreement or other agreement or instrument to which the
Company or any of its Subsidiaries is a party or by which the
Company or any of its Subsidiaries is bound or to which any of the
property or assets of the Company or any of its Subsidiaries are
subject; or (iii) in violation of any Law of any Governmental
Authority, except, in the case of each of clauses (ii) and (iii)
above, for any such violation or default that would not,
individually or in the aggregate, have a Material Adverse Effect.
To the Company’s knowledge, no other party under any material
contract or other agreement to which it or any of its Subsidiaries
is a party is in default in any respect thereunder where such
default would have a Material Adverse Effect.
(l) No Material Adverse Change.
Subsequent to the respective dates as of which information is given
in the Registration Statement, the Time of Sale Prospectus, the
Prospectus and the Free Writing Prospectuses, if any (including any
document deemed incorporated by reference therein), there has not
been (i) any Material Adverse Effect or the occurrence of any
development that the Company reasonably expects will result in a
Material Adverse Effect, (ii) any transaction which is material to
the Company and the Subsidiaries taken as a whole, (iii) any
obligation or liability, direct or contingent (including any
off-balance sheet obligations), incurred by the Company or any
Subsidiary, which is material to the Company and the Subsidiaries
taken as a whole, (iv) any material change in the capital stock or
outstanding long-term indebtedness of the Company or any of its
Subsidiaries or (v) any dividend or distribution of any kind
declared, paid or made on the capital stock of the Company or any
Subsidiary, other than in each case above in the ordinary course of
business or as otherwise disclosed in the Registration Statement or
Prospectus (including any document deemed incorporated by reference
therein).
(m) Capitalization. The issued and
outstanding shares of capital stock of the Company have been
validly issued, are fully paid and nonassessable and, other than as
disclosed in the Registration Statement, the Time of Sale
Prospectus or the Prospectus, are not subject to any preemptive
rights, rights of first refusal or similar rights. The Company has
an authorized, issued and outstanding capitalization as set forth
in the Registration Statement, the Time of Sale Prospectus and the
Prospectus as of the dates referred to therein (other than the
grant of additional options under the Company’s existing
stock option plans, or changes in the number of outstanding shares
of Common Stock of the Company due to the issuance of shares upon
the exercise or conversion of securities exercisable for, or
convertible into, Common Stock outstanding on the date hereof) and
such authorized capital stock conforms to the description thereof
set forth in the Registration Statement, the Time of Sale
Prospectus and the Prospectus. The description of the securities of
the Company in the Registration Statement, the Time of Sale
Prospectus and the Prospectus is complete and accurate in all
material respects. Except as disclosed in or contemplated by the
Registration Statement, the Time of Sale Prospectus or the
Prospectus, as of the date referred to therein, the Company does
not have outstanding any options to purchase, or any rights or
warrants to subscribe for, or any securities or obligations
convertible into, or exchangeable for, or any contracts or
commitments to issue or sell, any shares of capital stock or other
securities.
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(n) Authorization; Enforceability.
The Company has full legal right, power and authority to enter into
this Agreement and perform the transactions contemplated hereby.
This Agreement has been duly authorized, executed and delivered by
the Company and is a legal, valid and binding agreement of the
Company enforceable in accordance with its terms, except to the
extent that (i) enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar Laws affecting
creditors’ rights generally and by general equitable
principles and (ii) the indemnification and contribution provisions
of Section 11 hereof may be limited by federal or state securities
laws and public policy considerations in respect
thereof.
(o) Authorization of the Offered
Shares. The Offered Shares have been duly authorized for
issuance and sale pursuant to this Agreement and, when issued and
delivered by the Company against payment therefor pursuant to this
Agreement, will be duly and validly issued, fully paid and
nonassessable, free and clear of any pledge, lien, encumbrance,
security interest or other claim, including any statutory or
contractual preemptive rights, resale rights, rights of first
refusal or other similar rights, and will be registered pursuant to
Section 12 of the Exchange Act. The Offered Shares, when issued,
will conform to the description thereof set forth in or
incorporated into the Registration Statement, the Time of Sale
Prospectus and the Prospectus.
(p) No Consents Required. No
consent, approval, authorization, order, registration or
qualification of or with any Governmental Authority is required for
the execution, delivery and performance by the Company of this
Agreement, and the issuance and sale by the Company of the Offered
Shares as contemplated hereby, except for such consents, approvals,
authorizations, orders and registrations or qualifications as may
be required under applicable state securities Laws or by the
by-laws and rules of the Financial Industry Regulatory Authority
(“FINRA”) or
Nasdaq in connection with the sale of the Offered
Shares.
(q) No Preferential Rights. Except
as set forth in the Registration Statement, the Time of Sale
Prospectus and the Prospectus, (i) no person, as such term is
defined in Rule 1-02 of Regulation S-X promulgated under the
Securities Act (each, a “Person”), has the right,
contractual or otherwise, to cause the Company to issue or sell to
such Person any Common Stock or shares of any other capital stock
or other securities of the Company (other than upon the exercise of
options or warrants to purchase Common Stock or upon the exercise
of options that may be granted from time to time under the
Company’s stock option plans), (ii) no Person has any
preemptive rights, resale rights, rights of first refusal, rights
of co-sale, or any other rights (whether pursuant to a
“poison pill” provision or otherwise) to purchase any
Common Stock or shares of any other capital stock or other
securities of the Company from the Company which have not been duly
waived with respect to the offering contemplated hereby,
(iii) no Person has the right to act as an underwriter or as
a financial advisor to the Company in connection with the offer and
sale of the Common Stock, and (iv) no Person has the right,
contractual or otherwise, to require the Company to register under
the Securities Act any Common Stock or shares of any other capital
stock or other securities of the Company, or to include any such
shares or other securities in the Registration Statement or the
offering contemplated thereby, whether as a result of the filing or
effectiveness of the Registration Statement or the sale of the
Offered Shares as contemplated thereby or otherwise.
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(r) Independent Public Accounting
Firm. BDO China Shu Lun Pan Certified Public Accountants LLP
(the “Accountant”), whose report on the
consolidated financial statements of the Company is filed with the
Commission as part of the Company’s most recent Annual Report
on Form 10-K filed with the Commission and incorporated by
reference into the Registration Statement and the Prospectus, are
and, during the periods covered by their report, were an
independent registered public accounting firm within the meaning of
the Securities Act and the Public Company Accounting Oversight
Board (United States). To the Company’s knowledge, the
Accountant is not in violation of the auditor independence
requirements of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002 (the
“▇▇▇▇▇▇▇▇-▇▇▇▇▇
Act”) with respect to the Company.
(s) Enforceability of Agreements.
All agreements between the Company and third parties expressly
referenced in the Prospectus, other than such agreements that have
expired by their terms or whose termination is disclosed in
documents filed by the Company on ▇▇▇▇▇, are legal, valid and
binding obligations of the Company enforceable in accordance with
their respective terms, except to the extent that
(i) enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar Laws affecting
creditors’ rights generally and by general equitable
principles, (ii) the indemnification provisions of certain
agreements may be limited by federal or state securities Laws or
public policy considerations in respect thereof, or (iii) any
unenforceability that, individually or in the aggregate, would not
reasonably be expected to have a Material Adverse
Effect.
(t) No Litigation. Except as
otherwise set forth in the Registration Statement, the Time of Sale
Prospectus or the Prospectus, (i) there are no pending actions,
suits or proceedings by or before any Governmental Authority and
(ii) the Company has not received any notice of any pending audits
or investigations by or before any Governmental Authority, in each
of clause (i) and (ii), to which the Company or a Subsidiary is a
party or to which any property of the Company or any of its
Subsidiaries is the subject that, individually or in the aggregate,
if determined adversely to the Company or any of its Subsidiaries,
would reasonably be expected to have a Material Adverse Effect;
and, to the Company’s knowledge, no such actions, suits,
proceedings, audits or investigations are threatened or
contemplated by any Governmental Authority or threatened by others
that individually or in the aggregate, if determined adversely to
the Company or any of its Subsidiaries, would reasonably be
expected to have a Material Adverse Effect; and (i) there are
no current or pending audits or investigations, actions, suits or
proceedings by or before any Governmental Authority that are
required under the Securities Act to be described in the Time of
Sale Prospectus or the Prospectus that are not so described; and
(ii) there are no contracts or other documents that are
required under the Securities Act to be filed as exhibits to the
Registration Statement that are not so filed.
-9-
(u) Consents and Permits. Except as
disclosed in the Registration Statement, the Time of Sale
Prospectus and the Prospectus, the Company and its Subsidiaries
have made all filings, applications and submissions required by,
possesses and is operating in compliance with, all approvals,
licenses, certificates, certifications, clearances, consents,
grants, exemptions, marks, notifications, orders, permits and other
authorizations issued by, the appropriate federal, state or foreign
Governmental Authority (including, without limitation, the United
States Food and Drug Administration (the “FDA”), the United States Drug
Enforcement Administration or any other foreign, federal, state,
provincial or local Governmental Authorities engaged in the
regulation of clinical trials, pharmaceuticals, biologics or
biohazardous substances or materials) necessary for the ownership
or lease of their respective properties or to conduct its
businesses as described in the Registration Statement, the Time of
Sale Prospectus and the Prospectus (collectively,
“Permits”),
except for such Permits the failure of which to possess, obtain or
make the same would not have a Material Adverse Effect; the Company
and its Subsidiaries are in compliance with the terms and
conditions of all such Permits, except where the failure to be in
compliance would not have a Material Adverse Effect; all of the
Permits are valid and in full force and effect, except where any
invalidity, individually or in the aggregate, would not be
reasonably expected to have a Material Adverse Effect; and neither
the Company nor any of its Subsidiaries has received any written
notice relating to the limitation, revocation, cancellation,
suspension, modification or non-renewal of any such Permit which,
singly or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, would have a Material Adverse Effect,
or has any reason to believe that any such license, certificate,
permit or authorization will not be renewed in the ordinary course.
To the extent required by applicable Laws of the FDA, the Company
or the applicable Subsidiary has submitted to the FDA an
Investigational New Drug Application or amendment or supplement
thereto for each clinical trial it has conducted or sponsored or is
conducting or sponsoring; all such submissions were in material
compliance with applicable Laws when submitted and no material
deficiencies have been asserted by the FDA with respect to any such
submissions. The Company or the applicable Subsidiary has completed
the registration with, or obtained the approval from, the National
Medical Products Administration (formerly known as the China Food
and Drug Administration) or the National Health Commission of the
PRC (formerly known as the Ministry of Health of the PRC) for each
clinical trial it has conducted or sponsored or is conducting or
sponsoring.
(v) Regulatory Filings. Except as
disclosed in the Registration Statement, the Time of Sale
Prospectus and the Prospectus, neither the Company nor any of its
Subsidiaries has failed to file with the applicable Governmental
Authority (including, without limitation, the FDA, or any foreign,
federal, state, provincial or local Governmental Authority
performing functions similar to those performed by the FDA) any
required filing, declaration, listing, registration, report or
submission, except for such failures that, individually or in the
aggregate, would not have a Material Adverse Effect; except as
disclosed in the Registration Statement, the Time of Sale
Prospectus and the Prospectus, all such filings, declarations,
listings, registrations, reports or submissions were in compliance
with applicable Laws when filed and no deficiencies have been
asserted by any applicable regulatory authority with respect to any
such filings, declarations, listings, registrations, reports or
submissions, except for any deficiencies that, individually or in
the aggregate, would not have a Material Adverse Effect. The
Company has operated and currently is, in all material respects, in
compliance with the United States Federal Food, Drug, and Cosmetic
Act, all applicable rules and regulations of the FDA and other
federal, state, local and foreign Governmental Authority exercising
comparable authority. The Company has no knowledge of any studies,
tests or trials not described in the Registration Statement, the
Time of Sale Prospectus and the Prospectus the results of which
reasonably call into question in any material respect the results
of the studies, tests and trials described in the Registration
Statement, the Time of Sale Prospectus and the
Prospectus.
-10-
(w) Intellectual Property. Except
as disclosed in the Registration Statement, the Time of Sale
Prospectus and the Prospectus, the Company and its Subsidiaries
own, possess, license or have other rights to use all foreign and
domestic patents, patent applications, trade and service marks,
trade and service ▇▇▇▇ registrations, trade names, copyrights,
licenses, inventions, trade secrets, technology, Internet domain
names, know-how and other intellectual property (collectively, the
“Intellectual
Property”), necessary for the conduct of their
respective businesses as now conducted except to the extent that
the failure to own, possess, license or otherwise hold adequate
rights to use such Intellectual Property would not, individually or
in the aggregate, have a Material Adverse Effect. Except as
disclosed in the Registration Statement, the Time of Sale
Prospectus and the Prospectus (i) there are no rights of third
parties to any such Intellectual Property owned by the Company and
its Subsidiaries; (ii) to the Company’s knowledge, there is
no infringement by third parties of any such Intellectual Property;
(iii) there is no pending or, to the Company’s knowledge,
threatened action, suit, proceeding or claim by others challenging
the Company’s and its Subsidiaries’ rights in or to any
such Intellectual Property, and the Company is unaware of any facts
which could form a reasonable basis for any such action, suit,
proceeding or claim; (iv) 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; (v) there is no pending or, to the
Company’s knowledge, threatened action, suit, proceeding or
claim by others that the Company and its Subsidiaries infringe or
otherwise violate any patent, trademark, copyright, trade secret or
other proprietary rights of others; (vi) to the Company’s
knowledge, there is no third-party U.S. patent or published U.S.
patent application which contains claims for which an Interference
Proceeding (as defined in 35 U.S.C. §135) has been commenced
against any patent or patent application described in the
Registration Statement, the Time of Sale Prospectus and the
Prospectus as being owned by or licensed to the Company; and (vii)
the Company and its Subsidiaries have complied with the terms of
each agreement pursuant to which Intellectual Property has been
licensed to the Company or such Subsidiary, and all such agreements
are in full force and effect, except, in the case of any of clauses
(i)-(vii) above, for any such infringement by third parties or any
such pending or threatened suit, action, proceeding or claim as
would not, individually or in the aggregate, result in a Material
Adverse Effect.
(x) Clinical Studies. To the
Company’s knowledge, the preclinical studies and tests and
clinical trials described in the Registration Statement, the Time
of Sale Prospectus and the Prospectus were, and, if still pending,
are being, to the Company’s knowledge, conducted in all
material respects in accordance with the experimental protocols,
procedures and controls pursuant to, where applicable, accepted
professional and scientific standards for products or product
candidates comparable to those being developed by the Company; the
descriptions of such studies, tests and trials, and the results
thereof, contained in the Registration Statement, the Time of Sale
Prospectus and the Prospectus are accurate and complete in all
material respects; the Company is not aware of any tests, studies
or trials not described in the Registration Statement, the Time of
Sale Prospectus and the Prospectus, the results of which reasonably
call into question the results of the tests, studies and trials
described in the Registration Statement, the Time of Sale
Prospectus and the Prospectus; and the Company has not received any
written notice or correspondence from the FDA or any foreign, state
or local Governmental Authority exercising comparable authority or
any institutional review board or comparable authority requiring
the termination, suspension, clinical hold or material modification
of any tests, studies or trials.
-11-
(y) No Material Defaults. Neither
the Company nor any of the Subsidiaries has defaulted on any
installment on indebtedness for borrowed money or on any rental on
one or more long-term leases, which defaults, individually or in
the aggregate, would have a Material Adverse Effect. The Company
has not filed a report pursuant to Section 13(a) or 15(d) of the
Exchange Act since the filing of its last Annual Report on Form
10-K, indicating that it (i) has failed to pay any dividend or
sinking fund installment on preferred stock or (ii) has
defaulted on any installment on indebtedness for borrowed money or
on any rental on one or more long-term leases, which defaults,
individually or in the aggregate, would have a Material Adverse
Effect.
(z) Certain Market Activities.
Neither the Company, nor any of the Subsidiaries, nor any of their
respective directors, officers or controlling persons has taken,
directly or indirectly, any action designed, or that has
constituted or might reasonably be expected to cause or result in,
under the Exchange Act or otherwise, the stabilization or
manipulation of the price of any security of the Company to
facilitate the sale or resale of the Offered Shares.
(aa) Broker/Dealer
Relationships. Neither the Company nor any of the
Subsidiaries (i) is required to register as a
“broker” or “dealer” in accordance with the
provisions of the Exchange Act or (ii) directly or indirectly
through one or more intermediaries, controls or is a “person
associated with a member” or “associated person of a
member” (within the meaning set forth in the FINRA
Manual).
(bb) No
Reliance. The Company has not relied upon the Underwriters
or legal counsel for the Underwriters for any legal, tax or
accounting advice in connection with the offering and sale of the
Offered Shares.
(cc) Taxes.
The Company and each of its Subsidiaries have filed all federal,
state, local and foreign tax returns which have been required to be
filed and paid all taxes shown thereon through the date hereof, to
the extent that such taxes have become due and are not being
contested in good faith, except where the failure to so file or pay
would not have a Material Adverse Effect. Except as otherwise
disclosed in or contemplated by the Registration Statement, the
Time of Sale Prospectus or the Prospectus, no tax deficiency has
been determined adversely to the Company or any of its Subsidiaries
which has had, or would have, individually or in the aggregate, a
Material Adverse Effect. The Company has no knowledge of any
federal, state or other governmental tax deficiency, penalty or
assessment which has been or might be asserted or threatened
against it which would have a Material Adverse Effect.
-12-
(dd) Title
to Real and Personal Property. Except as set forth in the
Registration Statement, the Time of Sale Prospectus or the
Prospectus, the Company and its Subsidiaries have good and
marketable title in fee simple to all items of real property owned
by them, good and valid title to all personal property described in
the Registration Statement, the Time of Sale Prospectus or the
Prospectus as being owned by them that are material to the
businesses of the Company or such Subsidiary, in each case free and
clear of all liens, encumbrances and claims, except those matters
that (i) do not materially interfere with the use made and proposed
to be made of such property by the Company and any of its
Subsidiaries or (ii) would not, individually or in the aggregate,
have a Material Adverse Effect. Any real or personal property
described in the Registration Statement, the Time of Sale
Prospectus or Prospectus as being leased by the Company and any of
its Subsidiaries is held by them under valid, existing and
enforceable leases, except those that (A) do not materially
interfere with the use made or proposed to be made of such property
by the Company or any of its Subsidiaries or (B) would not be
reasonably expected, individually or in the aggregate, to have a
Material Adverse Effect. Each of the properties of the Company and
its Subsidiaries complies with all applicable Laws (including,
without limitation, building and zoning Laws and Laws relating to
access to such properties), except if and to the extent disclosed
in the Registration Statement, the Time of Sale Prospectus or the
Prospectus or except for such failures to comply that would not,
individually or in the aggregate, reasonably be expected to
interfere in any material respect with the use made and proposed to
be made of such property by the Company and its Subsidiaries or
otherwise have a Material Adverse Effect. None of the Company or
its subsidiaries has received from any Governmental Authorities any
notice of any condemnation of, or zoning change affecting, the
properties of the Company and its Subsidiaries, and the Company
knows of no such condemnation or zoning change which is threatened,
except for such that would not reasonably be expected to interfere
in any material respect with the use made and proposed to be made
of such property by the Company and its Subsidiaries or otherwise
have a Material Adverse Effect, individually or in the
aggregate.
(ee) Environmental
Laws. Except as set forth in the Registration Statement, the
Time of Sale Prospectus or the Prospectus, the Company and its
Subsidiaries (i) are in compliance with any and all applicable
federal, state, local and foreign Laws relating to the protection
of human health and safety, the environment or hazardous or toxic
substances or wastes, pollutants or contaminants (collectively,
“Environmental
Laws”); (ii) have received and are in compliance
with all permits, licenses or other approvals required of them
under applicable Environmental Laws to conduct their respective
businesses as described in the Registration Statement, the Time of
Sale Prospectus and the Prospectus; and (iii) have not
received notice of any actual or potential liability for the
investigation or remediation of any disposal or release of
hazardous or toxic substances or wastes, pollutants or
contaminants, except, in the case of any of clauses (i), (ii) or
(iii) above, for any such failure to comply or failure to receive
required permits, licenses, other approvals or liability as would
not, individually or in the aggregate, have a Material Adverse
Effect.
-13-
(ff) Disclosure
Controls. The Company and each of its Subsidiaries maintain
systems of 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
generally accepted accounting principles 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. The
Company’s internal control over financial reporting is
effective and the Company is not aware of any material weaknesses
in its internal control over financial reporting (other than as set
forth in the Registration Statement, Time of Sale Prospectus or
Prospectus). Since the date of the latest audited financial
statements of the Company included in the Prospectus, there has
been no change in the Company’s internal control over
financial reporting that has materially affected, or is reasonably
likely to materially affect, the Company’s internal control
over financial reporting (other than as set forth in the
Registration Statement, Time of Sale Prospectus or Prospectus). The
Company has established disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15 and 15d-15) for the Company
and designed such disclosure controls and procedures to ensure that
material information relating to the Company and each of its
Subsidiaries is made known to the certifying officers by others
within those entities, particularly during the period in which the
Company’s Annual Report on Form 10-K or Quarterly Report on
Form 10-Q, as the case may be, is being prepared. The
Company’s certifying officers have evaluated the
effectiveness of the Company’s disclosure controls and
procedures as of a date within 90 days prior to the filing date of
the Form 10-K for the fiscal year most recently ended (such date,
the “Evaluation
Date”). The Company presented in its Form 10-K for the
fiscal year most recently ended the conclusions of the certifying
officers about the effectiveness of the disclosure controls and
procedures based on their evaluations as of the Evaluation Date and
the disclosure controls and procedures are effective. Since the
Evaluation Date, there have been no significant changes in the
Company’s internal controls (as such term is defined in Item
307(b) of Regulation S-K under the Securities Act) or, to the
Company’s knowledge, in other factors that could
significantly affect the Company’s internal
controls.
(gg) ▇▇▇▇▇▇▇▇-▇▇▇▇▇.
There is and has been no failure on the part of the Company or, to
the knowledge of the Company, any of the Company’s directors
or officers, in their capacities as such, to comply in all material
respects with any applicable provisions of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act
and the rules and regulations promulgated thereunder. Each of the
principal executive officer and the principal financial officer of
the Company (or each former principal executive officer of the
Company and each former principal financial officer of the Company
as applicable) has made all certifications required by Sections 302
and 906 of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act with respect to all reports,
schedules, forms, statements and other documents required to be
filed by it or furnished by it to the Commission. For purposes of
the preceding sentence, “principal executive officer”
and “principal financial officer” shall have the
meanings given to such terms in the ▇▇▇▇▇▇▇▇-▇▇▇▇▇
Act.
(hh) Finder’s
Fees. Neither the Company nor any of the Subsidiaries has
incurred any liability for any finder’s fees, brokerage
commissions or similar payments in connection with the transactions
herein contemplated, except as may otherwise exist with respect to
or pursuant to this Agreement.
-14-
(ii) Labor
Disputes. No labor disturbance by or dispute with employees
of the Company or any of its Subsidiaries exists or, to the
knowledge of the Company, is threatened which would result in a
Material Adverse Effect.
(jj) Investment
Company Act. Neither the Company nor any of the Subsidiaries
is, or will be, either after receipt of payment for the Offered
Shares or after the application of the proceeds therefrom as
described under “Use of Proceeds” in the Registration
Statement, the Time of Sale Prospectus or the Prospectus, required
to register as an “investment company” or an entity
“controlled” by an “investment company,” as
such terms are defined in the Investment Company Act of 1940 (the
“Investment Company
Act”).
(kk) Operations.
The operations of the Company and its Subsidiaries are and have
been conducted at all times in compliance with applicable financial
record keeping and reporting requirements of the Currency and
Foreign Transactions Reporting Act of 1970, the money laundering
Laws of all jurisdictions to which the Company or its Subsidiaries
are subject, the rules and regulations thereunder and any related
or similar rules, regulations or guidelines, issued, administered
or enforced by any Governmental Authority (collectively, the
“Money Laundering
Laws”); and no action, suit or proceeding by or before
any Governmental Authority involving the Company or any of its
Subsidiaries with respect to the Money Laundering Laws is pending
or, to the knowledge of the Company, threatened.
(ll) Off-Balance
Sheet Arrangements. There are no transactions, arrangements
and other relationships between and/or among the Company, and/or,
to the knowledge of the Company, any of its affiliates and any
unconsolidated entity, including, but not limited to, any
structural finance, special purpose or limited purpose entity
(each, an “Off-Balance Sheet
Transaction”) that could reasonably be expected to
affect materially the Company’s liquidity or the availability
of or requirements for its capital resources, including those
Off-Balance Sheet Transactions described in the Commission’s
Statement about Management’s Discussion and Analysis of
Financial Conditions and Results of Operations (Release Nos.
33-8056; 34-45321; FR-61), required to be described in the
Prospectus which have not been described as required.
(mm) ERISA.
To the knowledge of the Company, each material employee benefit
plan, within the meaning of Section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended (“ERISA”), that is maintained,
administered or contributed to by the Company or any of its
affiliates for employees or former employees of the Company and any
of its Subsidiaries has been maintained in material compliance with
its terms and the requirements of any applicable statutes, orders,
rules and regulations, including but not limited to ERISA and the
Internal Revenue Code of 1986, as amended (the “Code”); no prohibited transaction,
within the meaning of Section 406 of ERISA or Section 4975 of the
Code, has occurred which would result in a material liability to
the Company with respect to any such plan excluding transactions
effected pursuant to a statutory or administrative exemption; and
for each such plan that is subject to the funding rules of Section
412 of the Code or Section 302 of ERISA, no “accumulated
funding deficiency” as defined in Section 412 of the Code has
been incurred, whether or not waived, and the fair market value of
the assets of each such plan (excluding for these purposes accrued
but unpaid contributions) exceeds the present value of all benefits
accrued under such plan determined using reasonable actuarial
assumptions.
-15-
(nn) Forward-Looking
Statements. No forward-looking statement (within the meaning
of Section 27A of the Securities Act and Section 21E of the
Exchange Act) (a “Forward-Looking Statement”)
contained in the Registration Statement, the Time of Sale
Prospectus and the Prospectus has been made or reaffirmed without a
reasonable basis or has been disclosed other than in good faith.
The Forward-Looking Statements incorporated by reference in the
Registration Statement and the Prospectus from the Company’s
Annual Report on Form 10-K for the fiscal year most recently ended
(i) are within the coverage of the safe harbor for
forward-looking statements set forth in Section 27A of the
Securities Act, Rule 175(b) under the Securities Act or Rule 3b-6
under the Exchange Act, as applicable, (ii) were made by the
Company with a reasonable basis and in good faith and reflect the
Company’s good faith commercially reasonable best estimate of
the matters described therein, and (iii) have been prepared in
accordance with Item 10 of Regulation S-K under the Securities
Act.
(oo) Margin
Rules. Neither the issuance, sale and delivery of the
Offered Shares nor the application of the proceeds thereof by the
Company as described in the Registration Statement, the Time of
Sale Prospectus and the Prospectus will violate Regulation T, U or
X of the Board of Governors of the Federal Reserve System or any
other regulation of such Board of Governors.
(pp) Insurance.
The Company and each of its Subsidiaries carry, or are covered by,
insurance in such amounts and covering such risks as the Company
and each of its Subsidiaries reasonably believe are adequate for
the conduct of their properties and as is customary for companies
engaged in similar businesses in similar industries.
(qq) No
Improper Practices. (i) Neither the Company nor the
Subsidiaries, nor any director, officer, or employee of the Company
or any Subsidiary nor, to the Company’s knowledge, any agent,
affiliate or other person acting on behalf of the Company or any
Subsidiary has, in the past five years, made any unlawful
contributions to any candidate for any political office (or failed
fully to disclose any contribution in violation of applicable Law)
or made any contribution or other payment to any official of, or
candidate for, any federal, state, municipal, or foreign office or
other person charged with similar public or quasi-public duty in
violation of any applicable Law or of the character required to be
disclosed in the Prospectus; (ii) no relationship, direct or
indirect, exists between or among the Company or any Subsidiary or
any affiliate of any of them, on the one hand, and the directors,
officers and stockholders of the Company or any Subsidiary, on the
other hand, that is required by the Securities Act to be described
in the Registration Statement, the Time of Sale Prospectus and the
Prospectus that is not so described; (iii) no relationship,
direct or indirect, exists between or among the Company or any
Subsidiary or any affiliate of them, on the one hand, and the
directors, officers, or stockholders of the Company or any
Subsidiary, on the other hand, that is required by the rules of
FINRA to be described in the Registration Statement, the Time of
Sale Prospectus and the Prospectus that is not so described;
(iv) except as described in the Registration Statement, the
Time of Sale Prospectus and the Prospectus, there are no material
outstanding loans or advances or material guarantees of
indebtedness by the Company or any Subsidiary to or for the benefit
of any of their respective officers or directors or any of the
members of the families of any of them; and (v) the Company has not
offered, or caused any placement agent to offer, Common Stock to
any person with the intent to influence unlawfully (A) a
customer or supplier of the Company or any Subsidiary to alter the
customer’s or supplier’s level or type of business with
the Company or any Subsidiary or (B) a trade journalist or
publication to write or publish favorable information about the
Company or any Subsidiary or any of their respective products or
services, and, (vi) neither the Company nor any Subsidiary nor any
director, officer or employee of the Company or any Subsidiary nor,
to the Company’s knowledge, any agent, affiliate or other
person acting on behalf of the Company or any Subsidiary has (A)
violated or is in violation of any applicable provision of the U.S.
Foreign Corrupt Practices Act of 1977, or any other applicable
anti-bribery or anti-corruption Law (collectively,
“Anti-Corruption
Laws”), (B) promised, offered, provided, attempted to
provide or authorized the provision of anything of value, directly
or indirectly, to any person for the purpose of obtaining or
retaining business, influencing any act or decision of the
recipient or securing any improper advantage, or (C) made any
payment of funds of the Company or any Subsidiary or received or
retained any funds in violation of any Anti-Corruption
Laws.
-16-
(rr) Status
Under the Securities Act. The Company was not and is not an
ineligible issuer as defined in Rule 405 under the Securities Act
at the times specified in Rules 164 and 433 under the Securities
Act in connection with the offering of the Offered
Shares.
(ss) No
Conflicts. Neither the execution of this Agreement, nor the
issuance, offering or sale of the Offered Shares, nor the
consummation of any of the transactions contemplated herein and
therein, nor the compliance by the Company with the terms and
provisions hereof and thereof will conflict with, or will result in
a breach of, any of the terms and provisions of, or has constituted
or will constitute a default under, or has resulted in or will
result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company pursuant to
the terms of any contract or other agreement to which the Company
may be bound or to which any of the property or assets of the
Company is subject, except (i) such conflicts, breaches or defaults
as may have been waived and (ii) such conflicts, breaches and
defaults that would not reasonably be expected to have a Material
Adverse Effect; nor will such action result (x) in any violation of
the provisions of the organizational or governing documents of the
Company, or (y) in any violation of the provisions of any statute
or any order, rule or regulation applicable to the Company or of
any Governmental Authority having jurisdiction over the Company,
except, with respect to clause (y) only, where such violation would
not reasonably be expected to have a Material Adverse
Effect.
(tt) Sanctions.
(i) The Company
represents that, neither the Company nor any of its Subsidiaries
(collectively, the “Entity”) or any director, officer,
employee, agent, affiliate or representative of the Entity, is a
government, individual, or entity (in this paragraph (tt),
“Person”) that
is, or is owned or controlled by a Person that is:
(A) the
subject of any sanctions administered or enforced by the U.S.
Department of Treasury’s Office of Foreign Assets Control
(“OFAC”), the
United Nations Security Council, the European Union, Her
Majesty’s Treasury, or other relevant sanctions authorities,
including designation on OFAC’s Specially Designated
Nationals and Blocked Persons List or OFAC’s Foreign
Sanctions Evaders List (as amended, collectively,
“Sanctions”),
nor
(B) located,
organized or resident in a country or territory that is the subject
of Sanctions that broadly prohibit dealings with that country or
territory (including Cuba, Iran, North Korea, Sudan, Syria and the
Crimea Region of the Ukraine) (the “Sanctioned
Countries”).
(ii) The
Entity represents and covenants that it will not, directly or
indirectly, use the proceeds of the offering, or lend, contribute
or otherwise make available such proceeds to any subsidiary, joint
venture partner or other Person:
(A) to
fund or facilitate any activities or business of or with any Person
or in any country or territory that, at the time of such funding or
facilitation, is the subject of Sanctions or is a Sanctioned
Country; or
-17-
(B) in
any other manner that will result in a violation of Sanctions by
any Person (including any Person participating in the offering,
whether as underwriter, advisor, investor or
otherwise).
(iii) The
Entity represents and covenants that, except as detailed in the
Registration Statement and the Prospectus, for the past 5 years, it
has not engaged in, is not now engaging in, and will not engage in,
any dealings or transactions with any Person, or in any country or
territory, that at the time of the dealing or transaction is or was
the subject of Sanctions or is or was a Sanctioned
Country.
(uu) Compliance
with Laws. Each of the Company and its Subsidiaries: (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 or its Subsidiaries (“Applicable Laws”), except as could
not, individually or in the aggregate, reasonably be expected to
result in a Material Adverse Effect; (B) has not received any FDA
Form 483, notice of adverse finding, warning letter, untitled
letter or other correspondence or notice from the FDA or any other
Governmental Authority alleging or asserting noncompliance with any
Applicable Laws or any licenses, certificates, approvals,
clearances, authorizations, permits and supplements or amendments
thereto required by any such Applicable Laws (“Authorizations”); (C) possesses
all material Authorizations and such Authorizations are valid and
in full force and effect and are not in material violation of any
term of any such Authorizations; (D) has not received notice of any
claim, action, suit, proceeding, hearing, enforcement,
investigation, arbitration or other action from any Governmental
Authority or third party alleging that any product operation or
activity is in violation of any Applicable Laws or Authorizations
and has no knowledge that any such Governmental Authority or third
party is considering any such claim, litigation, arbitration,
action, suit, investigation or proceeding; (E) has not received
notice that any Governmental Authority has taken, is taking or
intends to take action to limit, suspend, modify or revoke any
Authorizations and has no knowledge that any such Governmental
Authority is considering such action; (F) has filed, obtained,
maintained or submitted all material reports, documents, forms,
notices, applications, records, claims, submissions and supplements
or amendments as required by any Applicable Laws or Authorizations
and that all such reports, documents, forms, notices, applications,
records, claims, submissions and supplements or amendments were
complete and correct on the date filed (or were corrected or
supplemented by a subsequent submission); 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,
“dear healthcare provider” letter, or other notice or
action relating to the alleged lack of safety or efficacy of any
product 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.
(vv) Statistical
and Market-Related Data. All statistical, demographic and
market-related data included in the Registration Statement, the
Time of Sale Prospectus or the Prospectus are based on or derived
from sources that the Company believes to be reliable and accurate
or represent the Company’s good faith estimates that are made
on the basis of data derived from such sources.
-18-
(ww) Stock
Exchange Listing. The Shares are registered pursuant to
Section 12(b) or 12(g) of the Exchange Act and are listed on The
Nasdaq Global Market (the “Nasdaq”), and the Company has
taken no action designed to, or likely to have the effect of,
terminating the registration of the Shares under the Exchange Act
or delisting the Shares from Nasdaq, nor has the Company received
any notification that the Commission or Nasdaq is contemplating
terminating such registration or listing. To the Company’s
knowledge, it is in compliance with all applicable listing
requirements of Nasdaq.
(xx) Parties
to Lock-Up Agreements. The Company has furnished to the
Underwriters a letter agreement in the form attached hereto as
Exhibit A (the
“Lock-up
Agreement”) from each of the persons listed on
Exhibit B.
Such Exhibit B
lists under an appropriate caption the directors and executive
officers of the Company. If any
additional persons shall become directors or executive
officers of the Company prior to the
end of the Company Lock-up Period (as defined below), the Company
shall cause each such person, prior to or contemporaneously
with their appointment or election as a director or executive
officer of the Company, to execute and
deliver to Cantor and ▇▇▇▇▇ a Lock-up
Agreement.
(yy) Cybersecurity.
(i) Except as may be included or incorporated by reference in the
Registration Statement, the Time of Sale Prospectus and the
Prospectus, (x) to the Company’s knowledge, there has been no
material security breach or other material compromise of or
relating to any of the Company’s information technology and
computer systems, networks, hardware, software, data (including the
data of their respective customers, employees, suppliers, vendors
and any third party data maintained by or on behalf of them),
equipment or technology (collectively, “IT Systems and Data”) and (y) the
Company has not been notified of, and have no knowledge of any
event or condition that would reasonably be expected to result in,
any material security breach or other material compromise to their
IT Systems and Data; (ii) the Company is presently in compliance
with all applicable laws or statutes and all judgments, orders,
rules and regulations of any court or arbitrator or governmental or
regulatory authority, internal policies and contractual obligations
relating to the privacy and security of IT Systems and Data and to
the protection of such IT Systems and Data from unauthorized use,
access, misappropriation or modification, except as would not, in
the case of this clause (ii), individually or in the aggregate,
result in a Material Adverse Effect; and (iii) the Company has
implemented backup and disaster recovery technology consistent with
industry standards and practices.
Any
certificate signed by any officer of the Company or any of its
subsidiaries and delivered to any Underwriter or to counsel for the
Underwriters in connection with the offering, or the purchase and
sale, of the Offered Shares shall be deemed a representation and
warranty by the Company to each Underwriter as to the matters
covered thereby.
The
Company has a reasonable basis for making each of the
representations set forth in this Section 1. The Company
acknowledges that the Underwriters and, for purposes of the
opinions to be delivered pursuant to Section 6, counsel to the
Company and counsel to the Underwriters, will rely upon the
accuracy and truthfulness of the foregoing representations and
hereby consents to such reliance.
-19-
2. Purchase, Sale and Delivery of the
Offered Shares.
(a) The Firm Shares. Upon the terms
herein set forth, the Company agrees to issue and sell to the
several Underwriters an aggregate of 1,029,412 Firm Shares. On the
basis of the representations, warranties and agreements herein
contained, and upon the terms but subject to the conditions herein
set forth, the Underwriters agree, severally and not jointly, to
purchase from the Company the respective number of Firm Shares set
forth opposite their names on Schedule A. The purchase price
per Firm Share to be paid by the several Underwriters to the
Company shall be $15.81 per share (the “Firm Share Purchase
Price”).
(b) The First Closing Date.
Delivery of certificates for the Firm Shares to be purchased by the
Underwriters and payment therefor shall be made at the offices of
▇▇▇▇▇▇ LLP, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ (or
such other place as may be agreed to by the Company and the
Representatives) at 9:00 a.m. Eastern time, on March 25, 2019, or
such other time and date not later than 1:30 p.m. Eastern time, on
April 8, 2019 as the Representatives shall designate by notice to
the Company (the time and date of such closing are called the
“First Closing
Date”). The Company hereby acknowledges that
circumstances under which the Representatives may provide notice to
postpone the First Closing Date as originally scheduled include,
but are not limited to, any determination by the Company or the
Representatives to recirculate to the public copies of an amended
or supplemented Prospectus or a delay as contemplated by the
provisions of Section 11.
(c) The Option Shares; Option Closing
Date. In addition, on the basis of the representations,
warranties and agreements herein contained, and upon the terms but
subject to the conditions herein set forth, the Company hereby
grants an option to the several Underwriters to purchase, severally
and not jointly, up to an aggregate of 154,411 Option Shares from
the Company at the Firm Share Purchase Price. The option granted
hereunder may be exercised at any time and from time to time in
whole or in part upon notice by the Representatives to the Company,
which notice may be given at any time within 30 days from the date
of this Agreement. Such notice shall set forth (i) the aggregate
number of Option Shares as to which the Underwriters are exercising
the option and (ii) the time, date and place at which certificates
for the Option Shares will be delivered (which time and date may be
simultaneous with, but not earlier than, the First Closing Date;
and in the event that such time and date are simultaneous with the
First Closing Date, the term “First Closing Date” shall refer to
the time and date of delivery of certificates for the Firm Shares
and such Option Shares). Any such time and date of delivery, if
subsequent to the First Closing Date, is called an
“Option Closing
Date,” shall be determined by the Representatives and
shall not be earlier than three or later than five full Business
Days after delivery of such notice of exercise. If any Option
Shares are to be purchased, (a) each Underwriter agrees, severally
and not jointly, to purchase the number of Option Shares (subject
to such adjustments to eliminate fractional shares as the
Representatives may determine) that bears the same proportion to
the total number of Option Shares to be purchased as the number of
Firm Shares set forth on Schedule A opposite the name of
such Underwriter bears to the total number of Firm Shares and (b)
the Company agrees to sell the number of Option Shares set forth in
the paragraph “Introductory” of this Agreement (subject
to such adjustments to eliminate fractional shares as the
Representatives may determine). The Representatives may cancel the
option at any time prior to its expiration by giving written notice
of such cancellation to the Company.
-20-
(d) Public Offering of the Offered
Shares. The Representatives hereby advise the Company that
the Underwriters intend to offer for sale to the public, initially
on the terms set forth in the Registration Statement, the Time of
Sale Prospectus and the Prospectus, their respective portions of
the Offered Shares as soon after this Agreement has been executed
as the Representatives, in their sole judgment, have determined is
advisable and practicable.
(e) Payment for the Offered Shares.
(i) Payment for the Offered Shares shall be made at the First
Closing Date (and, if applicable, at each Option Closing Date) by
wire transfer of immediately available funds to the order of the
Company. (ii) It is understood that the Representatives have been
authorized, for their own account and the accounts of the several
Underwriters, to accept delivery of and receipt for, and make
payment of the purchase price for, the Firm Shares and any Option
Shares the Underwriters have agreed to purchase. Cantor and ▇▇▇▇▇, individually and not as
the Representatives of the Underwriters, may (but shall not be
obligated to) make payment for any Offered Shares to be purchased
by any Underwriter whose funds shall not have been received by the
Representatives by the First Closing Date or the applicable Option
Closing Date, as the case may be, for the account of such
Underwriter, but any such payment shall not relieve such
Underwriter from any of its obligations under this
Agreement.
(f) Delivery of the Offered Shares.
The Company shall deliver, or cause to be delivered, or cause to be
delivered through the facilities of DTC or DWAC unless the
Representatives shall otherwise instruct, to the Representatives
for the accounts of the several Underwriters certificates for the
Firm Shares at the First Closing Date, against the irrevocable
release of a wire transfer of immediately available funds for the
amount of the purchase price therefor. The Company shall also
deliver, or cause to be delivered through the facilities of DTC or
DWAC unless the Representatives shall otherwise instruct, to the
Representatives for the accounts of the several Underwriters,
certificates for the Option Shares the Underwriters have agreed to
purchase at the First Closing Date or the applicable Option Closing
Date, as the case may be, against the release of a wire transfer of
immediately available funds for the amount of the purchase price
therefor. The certificates for the Offered Shares shall be
registered in such names and denominations as the Representatives
may request in writing at least two full Business Days prior to the
First Closing Date (or the applicable Option Closing Date, as the
case may be), and if delivery is not made through the facilities of
DTC or DWAC, the Company shall permit the Representatives to
examine and package the Offered Shares for delivery be made
available for inspection on the Business Day preceding the First
Closing Date (or the applicable Option Closing Date, as the case
may be) at a location in New York City as the Representatives may
designate. Time shall be of the essence, and delivery at the time
and place specified in this Agreement is a further condition to the
obligations of the Underwriters.
3. Additional Covenants
of the
Company.
The
Company further covenants and agrees with each Underwriter as
follows:
(a) Delivery of Registration Statement,
Time of Sale Prospectus and Prospectus. The Company shall furnish to the
Representatives in New York City, without charge, prior to 10:00
a.m. New York City time on the Business Day next succeeding the
date of this Agreement and during the period when a prospectus
relating to the Offered Shares is required by the Securities Act to
be delivered (whether physically or through compliance with Rule
172 under the Securities Act or any similar rule) in connection
with sales of the Offered Shares, as many copies of the Time of
Sale Prospectus, the Prospectus and any supplements and amendments
thereto or to the Registration Statement as the Representatives may
reasonably request.
-21-
(b) Representatives’ Review of
Proposed Amendments and Supplements. During the period when
a prospectus relating to the Offered Shares is required by the
Securities Act to be delivered (whether physically or through
compliance with Rule 172 under the Securities Act or any similar
rule), the Company (i) will furnish to the Representatives for
review, a reasonable period of time prior to the proposed time of
filing of any proposed amendment or supplement to the Registration
Statement, a copy of each such amendment or supplement and (ii)
will not amend or supplement the Registration Statement (including
any amendment or supplement through incorporation of any report
filed under the Exchange Act) without the Representatives’
prior written consent. Prior to amending or supplementing any
preliminary prospectus, the Time of Sale Prospectus or the
Prospectus (including any amendment or supplement through
incorporation of any report filed under the Exchange Act), the
Company shall furnish to the Representatives for review, a
reasonable amount of time prior to the time of filing or use of the
proposed amendment or supplement, a copy of each such proposed
amendment or supplement. The Company shall not file or use any such
proposed amendment or supplement without the Representatives’
prior written consent. The Company shall file with the Commission
within the applicable period specified in Rule 424(b) under the
Securities Act any prospectus required to be filed pursuant to such
Rule.
(c) Free Writing Prospectuses. The
Company shall furnish to the Representatives for review, a
reasonable amount of time prior to the proposed time of filing or
use thereof, a copy of each proposed free writing prospectus or any
amendment or supplement thereto prepared by or on behalf of, used
by, or referred to by the Company, and the Company shall not file,
use or refer to any proposed free writing prospectus or any
amendment or supplement thereto without the Representatives’
prior written consent. The Company shall furnish to each
Underwriter, without charge, as many copies of any free writing
prospectus prepared by or on behalf of, used by or referred to by
the Company as such Underwriter may reasonably request. If at any
time when a prospectus is required by the Securities Act to be
delivered (whether physically or through compliance with Rule 172
under the Securities Act or any similar rule) in connection with
sales of the Offered Shares (but in any event if at any time
through and including the First Closing Date) there occurred or
occurs an event or development as a result of which any free
writing prospectus prepared by or on behalf of, used by, or
referred to by the Company 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 prevailing at
such time, not misleading, the Company shall promptly amend or
supplement such free writing prospectus to eliminate or correct
such conflict so that the statements in such free writing
prospectus as so amended or supplemented 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 prevailing at such time, not misleading, as the
case may be; provided, however, that prior to amending
or supplementing any such free writing prospectus, the Company
shall furnish to the Representatives for review, a reasonable
amount of time prior to the proposed time of filing or use thereof,
a copy of such proposed amended or supplemented free writing
prospectus, and the Company shall not file, use or refer to any
such amended or supplemented free writing prospectus without the
Representatives’ prior written consent.
-22-
(d) Filing of Underwriter Free Writing
Prospectuses.
The Company shall not take any action that would result in an
Underwriter or the Company being required to file with the
Commission pursuant to Rule 433(d) under the Securities Act a free
writing prospectus prepared by or on behalf of such Underwriter
that such Underwriter otherwise would not have been required to
file thereunder.
(e) Amendments and Supplements to Time of
Sale Prospectus. If the Time of Sale Prospectus
is being used to solicit offers to buy the Offered Shares at a time
when the Prospectus is not yet available to prospective purchasers,
and any event shall occur or condition exist as a result of which
it is necessary to amend or supplement the Time of Sale Prospectus
so that the Time of Sale Prospectus does 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 when delivered to a prospective purchaser, not
misleading, or if any event shall occur or condition exist as a
result of which the Time of Sale Prospectus conflicts with the
information contained in the Registration Statement, or if, in the
opinion of counsel for the Underwriters, it is necessary to amend
or supplement the Time of Sale Prospectus to comply with applicable
Law, the Company shall (subject to Section 3(b) and Section 3(c))
promptly prepare, file with the Commission and furnish, at its own
expense, to the Underwriters and to any dealer upon request, either
amendments or supplements to the Time of Sale Prospectus so that
the statements in the Time of Sale Prospectus as so amended or
supplemented 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 when
delivered to a prospective purchaser, not misleading or so that the
Time of Sale Prospectus, as amended or supplemented, will no longer
conflict with the information contained in the Registration
Statement, or so that the Time of Sale Prospectus, as amended or
supplemented, will comply with applicable Law.
(f) Certain
Notifications and Required Actions. After the date of this
Agreement, the Company shall promptly advise the Representatives in
writing of: (i) the receipt of any comments of, or requests for
additional or supplemental information from, the Commission;
(ii) the time and date of any filing of any post-effective
amendment to the Registration Statement or any amendment or
supplement to any preliminary prospectus, the Time of Sale
Prospectus, any free writing prospectus or the Prospectus; (iii)
the time and date that any post-effective amendment to the
Registration Statement becomes effective; and (iv) the issuance by
the Commission of any stop order suspending the effectiveness of
the Registration Statement or any post-effective amendment thereto
or any amendment or supplement to any preliminary prospectus, the
Time of Sale Prospectus or the Prospectus or of any order
preventing or suspending the use of any preliminary prospectus, the
Time of Sale Prospectus, any free writing prospectus or the
Prospectus, or of any proceedings to remove, suspend or terminate
from listing or quotation the Shares from any securities exchange
upon which they are listed for trading or included or designated
for quotation, or of the threatening or initiation of any
proceedings for any of such purposes. If the Commission shall enter
any such stop order at any time, the Company will use its best
efforts to obtain the lifting of such order at the earliest
possible moment. Additionally, the Company agrees that it shall
comply with all applicable provisions of Rule 424(b), Rule 433
and Rule 430B under the Securities Act and will use its reasonable
efforts to confirm that any filings made by the Company under Rule
424(b) or Rule 433 were received in a timely manner by the
Commission.
-23-
(g) Amendments and Supplements to the
Prospectus and Other Securities Act Matters. If any event
shall occur or condition exist as a result of which it is necessary
to amend or supplement the Prospectus so that the Prospectus does
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 when the Prospectus is delivered
(whether physically or through compliance with Rule 172 under the
Securities Act or any similar rule) to a purchaser, not misleading,
or if in the opinion of the Representatives or counsel for the
Underwriters it is otherwise necessary to amend or supplement the
Prospectus to comply with applicable Law, the Company agrees
(subject to Section 3(b) and Section 3(c)) to promptly prepare,
file with the Commission and furnish, at its own expense, to the
Underwriters and to any dealer upon request, amendments or
supplements to the Prospectus so that the statements in the
Prospectus as so amended or supplemented 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 when the Prospectus is delivered (whether
physically or through compliance with Rule 172 under the Securities
Act or any similar rule) to a purchaser, not misleading or so that
the Prospectus, as amended or supplemented, will comply with
applicable Law. Neither the Representatives’ consent to, nor
delivery of, any such amendment or supplement shall constitute a
waiver of any of the Company’s obligations under Section 3(b)
or Section 3(c).
(a) Blue Sky Compliance. The
Company shall cooperate with the Representatives and counsel for
the Underwriters to qualify or register the Offered Shares for sale
under (or obtain exemptions from the application of) the state
securities or blue sky Laws or Canadian provincial securities Laws
(or other foreign Laws) of those jurisdictions designated by the
Representatives, shall comply with such Laws and shall continue
such qualifications, registrations and exemptions in effect so long
as required for the distribution of the Offered Shares. The Company
shall not be required to qualify as a foreign corporation or to
take any action that would subject it to general service of process
in any such jurisdiction where it is not presently qualified or
where it would be subject to taxation as a foreign corporation. The
Company will advise the Representatives promptly of the suspension
of the qualification or registration of (or any such exemption
relating to) the Offered Shares for offering, sale or trading in
any jurisdiction or any initiation or threat of any proceeding for
any such purpose, and in the event of the issuance of any order
suspending such qualification, registration or exemption, the
Company shall use its best efforts to obtain the withdrawal thereof
at the earliest possible moment.
(b) Use of Proceeds. The Company
shall apply the net proceeds from the sale of the Offered Shares
sold by it in the manner described under the caption “Use of
Proceeds” in the Registration Statement, the Time of Sale
Prospectus and the Prospectus.
(c) Transfer Agent. For a period of
three years after the date of this Agreement, the Company shall
engage and maintain, at its expense, a registrar and transfer agent
for the Shares.
(d) Earnings Statement. The Company
will make generally available to its security holders and to the
Representatives as soon as practicable an earnings statement (which
need not be audited) covering a period of at least twelve months
beginning with the first fiscal quarter of the Company commencing
after the date of this Agreement that will satisfy the provisions
of Section 11(a) of the Securities Act and the rules and
regulations of the Commission thereunder.
-24-
(e) Continued Compliance with Securities
Laws. The Company will comply with the Securities Act and
the Exchange Act so as to permit the completion of the distribution
of the Offered Shares as contemplated by this Agreement, the Registration Statement, the Time
of Sale Prospectus and the Prospectus. Without limiting the
generality of the foregoing, the Company will, during the period
when a prospectus relating to the Offered Shares is required by the
Securities Act to be delivered (whether physically or through
compliance with Rule 172 under the Securities Act or any similar
rule), file on a timely basis with the Commission and Nasdaq all
reports and documents required to be filed under the Exchange
Act.
(f) Listing. The Company will use
its best efforts to list, subject to notice of issuance, the
Offered Shares on Nasdaq.
(g) Company to Provide Copy of the
Prospectus in Form That May be Downloaded from the Internet.
If requested by the Representatives, the Company shall cause to be
prepared and delivered, at its expense, within one Business Day
from the effective date of this Agreement, to Cantor and ▇▇▇▇▇, an “electronic Prospectus” to be used
by the Underwriters in connection with the offering and sale of the
Offered Shares. As used herein, the term “electronic Prospectus” means a
form of Time of Sale Prospectus, and any amendment or supplement
thereto, that meets each of the following conditions: (i) it shall
be encoded in an electronic format, satisfactory to Cantor and ▇▇▇▇▇, that may be transmitted
electronically by the other Underwriters to offerees and purchasers
of the Offered Shares; (ii) it shall disclose the same
information as the paper Time of Sale Prospectus, except to the
extent that graphic and image material cannot be disseminated
electronically, in which case such graphic and image material shall
be replaced in the electronic Prospectus with a fair and accurate
narrative description or tabular representation of such material,
as appropriate; and (iii) it shall be in or convertible into a
paper format or an electronic format, satisfactory to Cantor and ▇▇▇▇▇, that will allow investors
to store and have continuously ready access to the Time of Sale
Prospectus at any future time, without charge to investors (other
than any fee charged for subscription to the Internet as a whole
and for on-line time). The Company hereby confirms that it has
included or will include in the Prospectus filed pursuant to ▇▇▇▇▇
or otherwise with the Commission and in the Registration Statement
at the time it was declared effective an undertaking that, upon
receipt of a request by an investor or his or her representative,
the Company shall transmit or cause to be transmitted promptly,
without charge, a paper copy of the Time of Sale
Prospectus.
-25-
(h) Agreement Not to Offer or Sell
Additional Shares. During the period commencing on and
including the date hereof and continuing through and including the
sixtieth (60th) day following the
date of the Prospectus (such period, as extended as described
below, being referred to herein as the “Lock-up Period”), the Company will
not, without the prior written consent of Cantor and ▇▇▇▇▇ (which consent may be
withheld in its sole discretion), directly or indirectly: (i) sell,
offer to sell, contract to sell or lend any Shares or Related
Securities (as defined below); (ii) effect any short sale, or
establish or increase any “put equivalent position” (as
defined in Rule 16a-1(h) under the Exchange Act) or liquidate or
decrease any “call equivalent position “ (as defined in
Rule 16a-1(b) under the Exchange Act) of any Shares or Related
Securities; (iii) pledge, hypothecate or grant any security
interest in; (iv) in any other way transfer or dispose of any
Shares or Related Securities; (v) enter into any swap, hedge
or similar arrangement or agreement that transfers, in whole or in
part, the economic risk of ownership of any Shares or Related
Securities, regardless of whether any such transaction is to be
settled in securities, in cash or otherwise; (vi) announce the
offering of any Shares or Related Securities; (vii) file any
registration statement under the Securities Act in respect of any
Shares or Related Securities (other than as contemplated by this
Agreement with respect to the Offered Shares); or (viii) publicly
announce the intention to do any of the foregoing; provided, however, that the Company may:
(A) effect the transactions contemplated hereby; (B) issue Shares
or options to purchase Shares, or issue Shares upon exercise of
options, pursuant to any stock option, stock bonus or other stock
plan or arrangement described in the Registration Statement, the
Time of Sale Prospectus and the Prospectus; (C) sell, offer to
sell, or contract to sell any debt securities that are convertible
into Shares or Related Securities, provided, that such debt
securities shall not be convertible earlier than six (6) months
following the date hereof at an effective conversion price that is
less than 120% of the Firm Share Purchase Price; (D) register
securities issuable pursuant to any stock option, stock bonus or
other arrangement on a Registration Statement on Form S-8; and (E)
register securities on a shelf registration on a Form S-3, provided
that no securities are actually offered or sold pursuant to such
registration statement during the Lock-up Period. For purposes of
the foregoing, “Related
Securities” shall mean any options or warrants or
other rights to acquire Shares or any securities exchangeable or
exercisable for or convertible into Shares, or to acquire other
securities or rights ultimately exchangeable or exercisable for, or
convertible into, Shares.
(i) Future Reports to the
Representatives. During the period of three years
hereafter, the Company will furnish to the Representatives, c/o
Cantor ▇▇▇▇▇▇▇▇▇▇ & Co., at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇, Attention: Equity Capital Markets, with copies to Cantor
▇▇▇▇▇▇▇▇▇▇ & Co., ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
Attention: General Counsel and ▇/▇ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & ▇▇.
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, Attention: Equity Capital Markets, with copies to ▇▇▇▇▇▇ ▇.
▇▇▇▇▇ & Co. Incorporated: (i) as soon as practicable after the
end of each fiscal year, copies of the Annual Report of the Company
containing the balance sheet of the Company as of the close of such
fiscal year and statements of income,
stockholders’ equity and cash flows for the
year then ended and the opinion thereon of the Company’s
independent public or certified public accountants; (ii) as soon as
practicable after the filing thereof, copies of each proxy
statement, Annual Report on Form 10-K, Quarterly Report on Form
10-Q, Current Report on Form 8-K or other report filed by the
Company with the Commission, FINRA or any securities exchange; and
(iii) as soon as available, copies of any report or communication
of the Company furnished or made available generally to holders of
its capital stock; provided, however, that the requirements
of this Section 3(p) shall be satisfied to the extent that such
reports, statement, communications, financial statements or other
documents are available on ▇▇▇▇▇.
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(j) Investment Limitation. The
Company shall not invest or otherwise use the proceeds received by
the Company from its sale of the Offered Shares in such a manner as
would require the Company or any of its subsidiaries to register as
an investment company under the Investment Company
Act.
(k) No Stabilization or Manipulation;
Compliance with Regulation M. Neither the Company, nor, to
its knowledge, any of its controlled affiliates (without the
consent of the Representatives) has taken or will take, directly or
indirectly, without giving effect to activities by the
Underwriters, any action designed to or that might cause or result
in stabilization or manipulation of the price of the Shares or any
reference security with respect to the Shares, whether to
facilitate the sale or resale of the Offered Shares or otherwise,
and the Company will, and shall use its best efforts to cause each
of its controlled affiliates to, comply with all applicable
provisions of Regulation M.
(l) Enforce Lock-Up Agreements.
During the Lock-up Period, the Company will enforce all agreements
between the Company and any of its security holders that restrict
or prohibit, expressly or in operation, the offer, sale or transfer
of Shares or Related Securities or any of the other actions
restricted or prohibited under the terms of the form of Lock-up
Agreement. In addition, the Company will direct the transfer agent
to place stop transfer restrictions upon any such securities of the
Company that are bound by such “lock-up” agreements for
the duration of the periods contemplated in such agreements,
including “lock-up” agreements entered into by the
Company’s officers and directors pursuant to Section 1(ww)
hereof.
(m) Company to Provide Interim Financial
Statements. Prior to the First Closing Date and each
applicable Option Closing Date, the Company will furnish the
Underwriters, as soon as they have been prepared by or are
available to the Company, a copy of any unaudited interim financial
statements of the Company for any period subsequent to the period
covered by the most recent financial statements appearing in the
Registration Statement and the Prospectus.
The
Representatives, on behalf of the several Underwriters, may, in its
sole discretion, waive in writing the performance by the Company of
any one or more of the foregoing covenants or extend the time for
their performance.
-27-
4. Payment of Expenses. The
Company agrees to pay all costs, fees and expenses incurred in
connection with the performance of its obligations hereunder and in
connection with the transactions contemplated hereby, including (i)
all expenses incident to the issuance and delivery of the Offered
Shares (including all printing and engraving costs), (ii) all fees
and expenses of the registrar and transfer agent of the Shares,
(iii) all necessary issue, transfer and other stamp taxes in
connection with the issuance and sale of the Offered Shares to the
Underwriters, (iv) all fees and expenses of the Company’s
counsel, independent public or certified public accountants and
other advisors, (v) all costs and expenses incurred in connection
with the preparation, printing, filing, shipping and distribution
of the Registration Statement (including financial statements,
exhibits, schedules, consents and certificates of experts), the
Time of Sale Prospectus, the Prospectus, each free writing
prospectus prepared by or on behalf of, used by, or referred to by
the Company, and each preliminary prospectus, and all amendments
and supplements thereto, and this Agreement, (vi) all filing fees,
attorneys’ fees and expenses incurred by the Company or the
Underwriters in connection with qualifying or registering (or
obtaining exemptions from the qualification or registration of) all
or any part of the Offered Shares for offer and sale under the
state securities or blue sky Laws or the provincial securities Laws
of Canada, and, if requested by the Representatives, preparing and
printing a “Blue Sky Survey” or memorandum and a
“Canadian wrapper”, and any supplements thereto,
advising the Underwriters of such qualifications, registrations and
exemptions, in an amount not to exceed $7,500, (vii) the costs and
expenses of the Company relating to investor presentations on any
“road show”, including expenses associated with the
preparation or dissemination of any electronic road show, expenses
associated with the production of road show slides and graphics,
fees and expenses of any consultants engaged in connection with the
road show presentations with the prior approval of the Company,
travel and lodging expenses of the Representatives, employees and
officers of the Company and any such consultants, (viii) the fees
and expenses associated with listing the Offered Shares on Nasdaq,
and (ix) all other fees, costs and expenses of the nature referred
to in Item 13 of Part II of the Registration Statement. Any such
amount payable to the Underwriters may be deducted from the
purchase price for the Offered Shares. Except as provided in this
Section 4 or in Section 7, Section 9 or Section 10, the
Underwriters shall pay their own expenses, including the fees and
disbursements of their counsel.
5. Covenant of the Underwriters.
Each Underwriter severally and not jointly covenants with the
Company not to take any action that would result in the Company
being required to file with the Commission pursuant to Rule 433(d)
under the Securities Act a free writing prospectus prepared by or
on behalf of such Underwriter that otherwise would not, but for
such actions, be required to be filed by the Company under Rule
433(d).
6. Conditions of the Obligations of the
Underwriters. The respective obligations of the several
Underwriters hereunder to purchase and pay for the Offered Shares
as provided herein on the First Closing Date and, with respect to
the Option Shares, each Option Closing Date, shall be subject to
the accuracy of the representations and warranties on the part of
the Company set forth in Section 1 as of the date hereof and as of
the First Closing Date as though then made and, with respect to the
Option Shares, as of each Option Closing Date as though then made,
to the timely performance by the Company of its covenants and other
obligations hereunder, and to each of the following additional
conditions:
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(a) Comfort Letter. On the date
hereof, the Representatives shall have received from BDO China Shu
Lun Pan Certified Public Accountants LLP, independent registered
public accountants for the Company, a letter dated the date hereof
addressed to the Underwriters, in form and substance satisfactory
to the Representatives, containing statements and information of
the type ordinarily included in accountant’s “comfort
letters” to underwriters, delivered according to Statement of
Auditing Standards No. 72 (or any successor bulletin), with respect
to the audited and unaudited financial statements and certain
financial information contained in the Registration Statement, the
Time of Sale Prospectus, and each free writing prospectus, if
any.
(b) Compliance with Registration
Requirements; No Stop Order; No Objection from FINRA. For a
period from and after the date of this Agreement and through and
including the First Closing Date and, with respect to any Option
Shares purchased after the First Closing Date, each Option Closing
Date:
(i) The Company shall
have filed the Prospectus with the Commission (including the
information required by Rule 430B under the Securities Act) in the
manner and within the time period required by Rule 424(b) under the
Securities Act; or the Company shall have filed a post-effective
amendment to the Registration Statement containing the information
required by such Rule 430B, and such post-effective amendment shall
have become effective.
(ii) No
stop order suspending the effectiveness of the Registration
Statement or any post-effective amendment to the Registration
Statement shall be in effect, and no proceedings for such purpose
shall have been instituted or threatened by the
Commission.
(iii) FINRA
shall have raised no objection to the fairness and reasonableness
of the underwriting terms and arrangements.
(c) No Material Adverse Effect or Ratings
Agency Change. For the period from and after the date of
this Agreement and through and including the First Closing Date
and, with respect to any Option Shares purchased after the First
Closing Date, each Option Closing Date, in the judgment of the
Representatives there shall not have occurred any material adverse
change in the authorized capital stock of the Company or any
Material Adverse Effect or any development that would cause a
Material Adverse Effect, or a downgrading in or withdrawal of the
rating assigned to any of the Company’s securities (other
than asset backed securities) by any rating organization or a
public announcement by any rating organization that it has under
surveillance or review its rating of any of the Company’s
securities (other than asset backed securities), the effect of
which, in the case of any such action by a rating organization
described above.
(d) Opinion of Counsel for the
Company. On each of the First Closing Date and each Option
Closing Date the Representatives shall have received the opinion
and negative assurance letter of Ellenoff ▇▇▇▇▇▇▇▇ & Schole
LLP, counsel for the Company, and a written opinion of ▇▇▇▇▇▇ ▇▇
& Partners Attorneys at Law, PRC counsel for the Company, dated
as of such date, in form and substance satisfactory to the
Representatives.
(e) Opinion of Intellectual Property
Counsel. On each of the First Closing Date and each Option
Closing Date, the Representatives shall have received the opinion
of Fangda Partners, counsel for the Company with respect to
intellectual property matters, dated as of such date, in form and
substance satisfactory to the Representatives.
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(f) Opinion of Counsel for the
Underwriters. On each of the First Closing Date and each
Option Closing Date the Representatives shall have received the
opinion of ▇▇▇▇▇▇ LLP, counsel for the Underwriters in connection
with the offer and sale of the Offered Shares, in form and
substance satisfactory to the Representatives, dated as of such
date.
(g) Officers’ Certificate. On
each of the First Closing Date and each Option Closing Date, the
Representatives shall have received a certificate executed by the
Chief Executive Officer or President of the Company and the Chief
Financial Officer of the Company, dated as of such date, to the
effect set forth in Section 6(b)(ii) and further to the effect
that:
(i) for the period from
and including the date of this Agreement through and including such
date, there has not occurred any Material Adverse
Effect;
(ii) the
representations, warranties and covenants of the Company set forth
in Section 1 are true and correct with the same force and
effect as though expressly made on and as of such date;
and
(iii) the
Company has complied with all the agreements hereunder and
satisfied all the conditions on its part to be performed or
satisfied hereunder at or prior to such date.
(h) Regulatory Certificate. The
Company shall have furnished to the Representatives a certificate,
dated such Closing Date, of its Chief Executive Officer with
respect to regulatory matters, in form and substance reasonably
satisfactory to the Representatives.
(i) Bring-down Comfort Letter. On
each of the First Closing Date and each Option Closing Date the
Representatives shall have received from BDO China Shu Lun Pan
Certified Public Accountants LLP, independent registered public
accountants for the Company, a letter dated such date, in form and
substance satisfactory to the Representatives, which letter shall:
(i) reaffirm the statements made in the letter furnished by them
pursuant to Section 6(a), except that the specified date referred
to therein for the carrying out of procedures shall be no more than
three Business Days prior to the First Closing Date or the
applicable Option Closing Date, as the case may be; and (ii) cover
certain financial information contained in the
Prospectus.
(j) Lock-Up Agreements. On or prior
to the date hereof, the Company shall have furnished to the
Representatives an agreement in the form of Exhibit A hereto from the
directors and officers (as defined in Rule 16a-1(f) under the
Exchange Act), and each such agreement shall be in full force and
effect on each of the First Closing Date and each Option Closing
Date.
(k) Rule 462(b) Registration
Statement. In the event that a Rule 462(b) Registration
Statement is filed in connection with the offering contemplated by
this Agreement, such Rule 462(b) Registration Statement shall have
been filed with the Commission on the date of this Agreement and
shall have become effective automatically upon such
filing.
(l) Nasdaq. The Company shall have
submitted a listing of additional shares notification form to
Nasdaq with respect to the Offered Shares and shall have received
no objection thereto from Nasdaq.
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(m) Additional Documents. On or
before each of the First Closing Date and each Option Closing Date,
the Representatives and counsel for the Underwriters shall have
received such information, documents and opinions as they may
reasonably request for the purposes of enabling them to pass upon
the issuance and sale of the Offered Shares as contemplated herein,
or in order to evidence the accuracy of any of the representations
and warranties, or the satisfaction of any of the conditions or
agreements, herein contained; and all proceedings taken by the
Company in connection with the issuance and sale of the Offered
Shares as contemplated herein and in connection with the other
transactions contemplated by this Agreement shall be satisfactory
in form and substance to the Representatives and counsel for the
Underwriters.
If any
condition specified in this Section 6 is not satisfied when and as
required to be satisfied, this Agreement may be terminated by the
Representatives by notice from the Representatives to the Company
at any time on or prior to the First Closing Date and, with respect
to the Option Shares, at any time on or prior to the applicable
Option Closing Date, which termination shall be without liability
on the part of any party to any other party, except that Section 4,
Section 7, Section 9 and Section 10 shall at all times be effective
and shall survive such termination.
7. Reimbursement of Underwriters’
Expenses. If this Agreement is terminated by the
Representatives pursuant to Section 6, Section 11 or Section 12, or
if the sale to the Underwriters of the Offered Shares on the First
Closing Date is not consummated because of any refusal, inability
or failure on the part of the Company to perform any agreement
herein or to comply with any provision hereof, the Company agrees
to reimburse the Representatives and the other Underwriters (or
such Underwriters as have terminated this Agreement with respect to
themselves), severally, upon demand for all out-of-pocket expenses
that shall have been reasonably incurred by the Representatives and
the Underwriters in connection with the proposed purchase and the
offering and sale of the Offered Shares, including fees and
disbursements of counsel, printing expenses, travel expenses,
postage, facsimile and telephone charges.
8. Effectiveness of this
Agreement. This Agreement shall become effective upon the
execution and delivery hereof by the parties hereto.
9. Indemnification.
(a) Indemnification of the
Underwriters. The Company agrees to indemnify and hold
harmless each Underwriter, its affiliates and their respective
partners, members, directors, officers, employees and agents, and
each person, if any, who controls each Underwriter or any affiliate
within the meaning of Section 15 of the Securities Act or Section
20 of the Exchange Act as follows:
(i) against any and all
loss, liability, claim, damage and expense whatsoever, as incurred,
joint or several, arising out of or based upon any untrue statement
or alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment thereto), or the omission
or alleged omission therefrom of a material fact required to be
stated therein or necessary to make the statements therein not
misleading, or arising out of any untrue statement or alleged
untrue statement of a material fact included in any preliminary
prospectus, Time of Sale Prospectus, any free writing prospectus,
any Marketing Material or the Prospectus (or any amendment or
supplement to the foregoing), or the omission or alleged omission
therefrom of a material fact necessary in order to make the
statements therein, in the light of the circumstances under which
they were made, not misleading;
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(ii) against
any and all loss, liability, claim, damage and expense whatsoever,
as incurred, joint or several, to the extent of the aggregate
amount paid in settlement of any litigation, or any investigation
or proceeding by any Governmental Authority, commenced or
threatened, or of any claim whatsoever based upon any such untrue
statement or omission, or any such alleged untrue statement or
omission; provided
that (subject to Section 9(d)) any such settlement is effected
with the written consent of the Company, which consent shall not
unreasonably be delayed, conditioned or withheld; and
(iii) against
any and all expense whatsoever, as incurred (including the fees and
disbursements of counsel), reasonably incurred in investigating,
preparing or defending against any litigation, or any investigation
or proceeding by any Governmental Authority, commenced or
threatened, or any claim whatsoever based upon any such untrue
statement or omission, or any such alleged untrue statement or
omission (whether or not a party), to the extent that any such
expense is not paid under (i) or (ii) above;
provided, however, that this indemnity
agreement shall not apply to any loss, liability, claim, damage or
expense to the extent arising out of any untrue statement or
omission or alleged untrue statement or omission made solely in
reliance upon and in conformity with the Underwriter Information
(as defined below).
(a) Indemnification of the Company, its
Directors and Officers. Each Underwriter agrees, severally
and not jointly, to indemnify and hold harmless the Company, and
its directors, each officer of the Company who signed the
Registration Statement and each person, if any, who controls 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 indemnity
contained in Section 9(a), 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 Time of Sale Prospectus, any free writing
prospectus or the Prospectus (or any amendment or supplement to the
foregoing), in reliance upon and in conformity with information
relating to such Underwriter and furnished to the Company in
writing by such Underwriter or Underwriters expressly for use
therein. The Company hereby acknowledges that the only information
that the Underwriter or Underwriters has furnished to the Company
expressly for use in the Registration Statement, any preliminary
prospectus, the Time of Sale Prospectus, any free writing
prospectus, are the statements set forth in the (i) the first
paragraph under the caption “Commission and Expenses,” (ii)
the first sentence of each of the first and second paragraphs under
the caption “Market Making
Stabilization and Other Transactions,” (iii) the first
sentence of the first paragraph under the caption
“Passive Market
Making,” in each case in the
“Underwriting” section of the Preliminary Prospectus
and Prospectus (the “Underwriter
Information”).
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(b) Notifications and Other
Indemnification Procedures. Any party that proposes to
assert the right to be indemnified under this Section 9 will,
promptly after receipt of notice of commencement of any action
against such party in respect of which a claim is to be made
against an indemnifying party or parties under this Section 9,
notify each such indemnifying party of the commencement of such
action, enclosing a copy of all papers served, but the omission so
to notify such indemnifying party will not relieve the indemnifying
party from (i) any liability that it might have to any
indemnified party otherwise than under this Section 9 and
(ii) any liability that it may have to any indemnified party
under the foregoing provision of this Section 9 unless, and only to
the extent that, such omission results in the forfeiture of
substantive rights or defenses by the indemnifying party. If any
such action is brought against any indemnified party and it
notifies the indemnifying party of its commencement, the
indemnifying party will be entitled to participate in and, to the
extent that it elects by delivering written notice to the
indemnified party promptly after receiving notice of the
commencement of the action from the indemnified party, jointly with
any other indemnifying party similarly notified, to assume the
defense of the action, with counsel reasonably satisfactory to the
indemnified party, and after notice from the indemnifying party to
the indemnified party of its election to assume the defense, the
indemnifying party will not be liable to the indemnified party for
any other legal expenses except as provided below and except for
the reasonable costs of investigation subsequently incurred by the
indemnified party in connection with the defense. The indemnified
party will have the right to employ its own counsel in any such
action, but the fees, expenses and other charges of such counsel
will be at the expense of such indemnified party unless
(1) the employment of counsel by the indemnified party has
been authorized in writing by the indemnifying party, (2) the
indemnified party has reasonably concluded (based on advice of
counsel) that there may be legal defenses available to it or other
indemnified parties that are different from or in addition to those
available to the indemnifying party, (3) a conflict or
potential conflict exists (based on advice of counsel to the
indemnified party) between the indemnified party and the
indemnifying party (in which case the indemnifying party will not
have the right to direct the defense of such action on behalf of
the indemnified party) or (4) the indemnifying party has not
in fact employed counsel to assume the defense of such action or
counsel reasonably satisfactory to the indemnified party, in each
case, within a reasonable time after receiving notice of the
commencement of the action; in each of which cases the reasonable
fees, disbursements and other charges of counsel will be at the
expense of the indemnifying party or parties. It is understood that
the indemnifying party or parties shall not, in connection with any
proceeding or related proceedings in the same jurisdiction, be
liable for the reasonable fees, disbursements and other charges of
more than one separate firm admitted to practice in such
jurisdiction (plus one local counsel in each relevant jurisdiction)
at any one time for all such indemnified party or parties. All such
fees, disbursements and other charges will be reimbursed by the
indemnifying party promptly as they are incurred. An indemnifying
party will not, in any event, be liable for any settlement of any
action or claim effected without its written consent. No
indemnifying party shall, without the prior written consent of each
indemnified party, settle or compromise or consent to the entry of
any judgment in any pending or threatened claim, action or
proceeding relating to the matters contemplated by this Section 9
(whether or not any indemnified party is a party thereto), unless
such settlement, compromise or consent (1) includes an express
and unconditional release of each indemnified party, in form and
substance reasonably satisfactory to such indemnified party, from
all liability arising out of such litigation, investigation,
proceeding or claim and (2) does not include a statement as to
or an admission of fault, culpability or a failure to act by or on
behalf of any indemnified party.
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(c) Settlement Without Consent if Failure
to Reimburse. If an indemnified party shall have requested
an indemnifying party to reimburse the indemnified party for
reasonable fees and expenses of counsel, such indemnifying party
agrees that it shall be liable for any settlement of the nature
contemplated by Section 9(a)(ii) effected without its written
consent if (1) such settlement is entered into more than 45
days after receipt by such indemnifying party of the aforesaid
request, (2) such indemnifying party shall have received
notice of the terms of such settlement at least 30 days prior to
such settlement being entered into and (3) such indemnifying
party shall not have reimbursed such indemnified party in
accordance with such request prior to the date of such
settlement.
10. Contribution. In order to
provide for just and equitable contribution in circumstances in
which the indemnification provided for in the foregoing paragraphs
of Section 9 is applicable in accordance with its terms but for any
reason is held to be unavailable or insufficient from the Company
or the Underwriters, the Company and the Underwriters will
contribute to the total losses, claims, liabilities, expenses and
damages (including any investigative, legal and other expenses
reasonably incurred in connection with, and any amount paid in
settlement of, any action, suit or proceeding or any claim
asserted) to which any indemnified party may be subject 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 hand. The relative benefits received by the Company on the
one hand and the Underwriters on the other hand shall be deemed to
be in the same proportion as the total net proceeds from the sale
of the Offered Shares (before deducting expenses) received by the
Company bear to the total compensation received by the Underwriters
(before deducting expenses) from the sale of Offered Shares on
behalf of the Company. If, but only if, the allocation provided by
the foregoing sentence is not permitted by applicable Law, the
allocation of contribution shall be made in such proportion as is
appropriate to reflect not only the relative benefits referred to
in the foregoing sentence but also the relative fault of the
Company, on the one hand, and the Underwriters, on the other hand,
with respect to the statements or omission that resulted in such
loss, claim, liability, expense or damage, or action in respect
thereof, as well as any other relevant equitable considerations
with respect to such offering. Such relative fault shall be
determined by reference to, among other things, 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 10 were to be
determined by pro rata allocation 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, liability,
expense, or damage, or action in respect thereof, referred to above
in this Section 10 shall be deemed to include, for the purpose of
this Section 10, any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating or
defending any such action or claim to the extent consistent with
Section 9(c). Notwithstanding the foregoing provisions of Section 9
and this Section 10, the Underwriters shall not be required to
contribute any amount in excess of the commissions actually
received by it under this Agreement and no person found guilty of
fraudulent misrepresentation (within the meaning of Section 11(f)
of the Securities Act) will be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. For
purposes of this Section 10, any person who controls a party to
this Agreement within the meaning of the Securities Act, any
affiliates of the respective Underwriters and any officers,
directors, partners, employees or agents of the Underwriters or
their respective affiliates, will have the same rights to
contribution as that party, and each director of the Company and
each officer of the Company who signed the Registration Statement
will have the same rights to contribution as the Company, subject
in each case to the provisions hereof. Any party entitled to
contribution, promptly after receipt of notice of commencement of
any action against such party in respect of which a claim for
contribution may be made under this Section 10, will notify any
such party or parties from whom contribution may be sought, but the
omission to so notify will not relieve that party or parties from
whom contribution may be sought from any other obligation it or
they may have under this Section 10 except to the extent that the
failure to so notify such other party materially prejudiced the
substantive rights or defenses of the party from whom contribution
is sought. Except for a settlement entered into pursuant to the
last sentence of Section 9(c), no party will be liable for
contribution with respect to any action or claim settled without
its written consent if such consent is required pursuant to Section
9(c).
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11. Default of One or More of the Several
Underwriters. If, on the First Closing Date or any Option
Closing Date, any one or more of the several Underwriters shall
fail or refuse to purchase Offered Shares that it or they have
agreed to purchase hereunder on such date, and the aggregate number
of Offered Shares which such defaulting Underwriter or Underwriters
agreed but failed or refused to purchase does not exceed 10% of the
aggregate number of the Offered Shares to be purchased on such
date, the Representatives may make arrangements satisfactory to the
Company for the purchase of such Offered Shares by other persons,
including any of the Underwriters, but if no such arrangements are
made by such date, the other Underwriters shall be obligated,
severally and not jointly, in the proportions that the number of
Firm Shares set forth opposite their respective names on
Schedule A bears to
the aggregate number of Firm Shares set forth opposite the names of
all such non-defaulting Underwriters, or in such other proportions
as may be specified by the Representatives with the consent of the
non-defaulting Underwriters, to purchase the Offered Shares which
such defaulting Underwriter or Underwriters agreed but failed or
refused to purchase on such date. If, on the First Closing Date or
any Option Closing Date, any one or more of the several
Underwriters shall fail or refuse to purchase Offered Shares that
it or they have agreed to purchase hereunder on such date, and the
aggregate number of Offered Shares which such defaulting
Underwriter or Underwriters agreed but failed or refused to
purchase exceeds 10% of the aggregate number of Offered Shares to
be purchased on such date, and arrangements satisfactory to the
Representatives and the Company for the purchase of such Offered
Shares are not made within 48 hours after such default, this
Agreement shall terminate without liability of any party to any
other party except that the provisions of Section 4, Section 7,
Section 9 and Section 10 shall at all times be effective and shall
survive such termination. In any such case either the
Representatives or the Company shall have the right to postpone the
First Closing Date or the applicable Option Closing Date, as the
case may be, but in no event for longer than seven days in order
that the required changes, if any, to the Registration Statement
and the Prospectus or any other documents or arrangements may be
effected.
As used
in this Agreement, the term “Underwriter” shall be deemed to
include any person substituted for a defaulting Underwriter under
this Section 11. Any action taken under this Section 11 shall not
relieve any defaulting Underwriter from liability in respect of any
default of such Underwriter under this Agreement.
12. Termination of this Agreement.
Prior to the purchase of the Firm Shares by the Underwriters on the
First Closing Date, this Agreement may be terminated by the
Representatives by notice given to the Company if at any time: (i)
trading or quotation in any of the Company’s securities shall
have been suspended or limited by the Commission or by Nasdaq, or
trading in securities generally on either Nasdaq or the NYSE shall
have been suspended or limited, or minimum or maximum prices shall
have been generally established on any of such stock exchanges;
(ii) a general banking moratorium shall have been declared by any
of federal or New York authorities; (iii) there shall have occurred
any outbreak or escalation of national or international hostilities
or any crisis or calamity, or any change in the United States or
international financial markets, or any substantial change or
development involving a prospective substantial change in United
States’ or international political, financial or economic
conditions, as in the judgment of the Representatives is material
and adverse and makes it impracticable to market the Offered Shares
in the manner and on the terms described in the Time of Sale
Prospectus or the Prospectus or to enforce contracts for the sale
of securities; (iv) in the judgment of the Representatives there
shall have occurred any change, or any development or event
involving a prospective change, in the condition, financial or
otherwise, or in the business, properties, earnings, results of
operations or prospects of the Company and its Subsidiaries
considered as one enterprise, whether or not arising in the
ordinary course of business; or (v) the Company shall have
sustained a loss by strike, fire, flood, earthquake, accident or
other calamity of such character as in the judgment of the
Representatives may interfere materially with the conduct of the
business and operations of the Company regardless of whether or not
such loss shall have been insured. Any termination pursuant to this
Section 12 shall be without liability on the part of (a) the
Company to any Underwriter, except that the Company shall be
obligated to reimburse the expenses of the Representatives and the
Underwriters pursuant to Section 4 or Section 7 hereof or (b) any
Underwriter to the Company; provided, however, that the provisions of
Section 9 and Section 10 shall at all times be effective and shall
survive such termination.
-35-
13. No Advisory or Fiduciary
Relationship. The Company acknowledges and agrees that (a)
the purchase and sale of the Offered Shares pursuant to this
Agreement, including the determination of the public offering price
of the Offered Shares and any related discounts and commissions, is
an arm’s-length commercial transaction between the Company,
on the one hand, and the several Underwriters, on the other hand,
(b) in connection with the offering contemplated hereby and the
process leading to such transaction, each Underwriter is and has
been acting solely as a principal and is not the agent or fiduciary
of the Company, or its stockholders, or its creditors, employees or
any other party, (c) no Underwriter has assumed or will assume an
advisory or fiduciary responsibility in favor of the Company with
respect to the offering contemplated hereby or the process leading
thereto (irrespective of whether such Underwriter has advised or is
currently advising the Company on other matters) and no Underwriter
has any obligation to the Company with respect to the offering
contemplated hereby except the obligations expressly set forth in
this Agreement, (d) the Underwriters and their respective
affiliates may be engaged in a broad range of transactions that
involve interests that differ from those of the Company, and (e)
the Underwriters have not provided any legal, accounting,
regulatory or tax advice with respect to the offering contemplated
hereby and the Company has consulted its own legal, accounting,
regulatory and tax advisors to the extent it deemed
appropriate.
14. Representations and Agreements to
Survive Delivery. The respective indemnities, agreements,
representations, warranties and other statements of the Company,
its officers and the several Underwriters set forth in or made
pursuant to this Agreement will remain in full force and effect,
regardless of any investigation made by or on behalf of any
Underwriter or the Company or any of its or their partners,
affiliates, officers, directors or employees or any controlling
person, as the case may be, and, anything herein to the contrary
notwithstanding, will survive delivery of and payment for the
Offered Shares sold hereunder and any termination of this
Agreement.
15. Notices. All communications
hereunder shall be in writing and shall be mailed, hand delivered
or telecopied and confirmed to the parties hereto as
follows:
If to
the
Representatives:
Cantor ▇▇▇▇▇▇▇▇▇▇ & Co.
▇▇▇
▇▇▇▇ ▇▇▇▇▇▇
▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇)
▇▇▇-▇▇▇▇
Attention: General
Counsel
▇▇▇▇▇▇
▇. ▇▇▇▇▇ & Co. Incorporated
▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fascimile: (▇▇▇)
▇▇▇-▇▇▇▇
Attention: General
Counsel
with a
copy
to:
▇▇▇▇▇▇ LLP
▇▇▇▇
▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇▇, Esq.
Facsimile: (▇▇▇)
▇▇▇-▇▇▇▇
-36-
If to the
Company:
1345
Avenue of the ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Bizuo (▇▇▇▇) ▇▇▇,
Chief Executive Officer
E-mail:
▇▇▇▇.▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
with a copy
to:
Ellenoff ▇▇▇▇▇▇▇▇
& Schole LLP
▇▇▇▇
▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇, Esq.
Facsimile: (▇▇▇)
▇▇▇-▇▇▇▇
Each
party to this Agreement may change such address for notices by
sending to the parties to this Agreement written notice of a new
address for such purpose. Each such notice or other communication
shall be deemed given (i) when delivered personally or by
verifiable facsimile transmission (with an original to follow) on
or before 4:30 p.m., New York City time, on a Business Day or,
if such day is not a Business Day, on the next succeeding Business
Day, (ii) on the next Business Day after timely delivery to a
nationally-recognized overnight courier and (iii) on the
Business Day actually received if deposited in the U.S. mail
(certified or registered mail, return receipt requested, postage
prepaid).
16. Electronic Notice. An
electronic communication (“Electronic Notice”) shall be
deemed written notice for purposes of this Section 16 if sent to
the electronic mail address specified by the receiving party under
separate cover. Electronic Notice shall be deemed received at the
time the party sending Electronic Notice receives verification of
receipt by the receiving party. Any party receiving Electronic
Notice may request and shall be entitled to receive the notice on
paper, in a nonelectronic form (“Nonelectronic Notice”) which shall
be sent to the requesting party within ten (10) days of receipt of
the written request for Nonelectronic Notice.
17. Successors and Assigns. This
Agreement shall inure to the benefit of and be binding upon the
Company and the Underwriters and their respective successors and
the parties referred to in Section 11. References to any of the
parties contained in this Agreement shall be deemed to include the
successors and permitted assigns of such party. Nothing in this
Agreement, express or implied, is intended to confer upon any party
other than the parties hereto or their respective successors and
permitted assigns any rights, remedies, obligations or liabilities
under or by reason of this Agreement, except as expressly provided
in this Agreement. Neither party may assign its rights or
obligations under this Agreement without the prior written consent
of the other party; provided, however, that the
Representatives may assign their rights and obligations hereunder
to an affiliate thereof without obtaining the Company’s
consent.
18. Partial Unenforceability. The
invalidity or unenforceability of any section, paragraph or
provision of this Agreement shall not affect the validity or
enforceability of any other section, paragraph or provision hereof.
If any section, paragraph or provision of this Agreement is for any
reason determined to be invalid or unenforceable, there shall be
deemed to be made such minor changes (and only such minor changes)
as are necessary to make it valid and enforceable.
-37-
1. Entire Agreement; Amendment;
Severability; Waiver. This Agreement (including all
schedules and exhibits attached hereto issued pursuant hereto)
constitutes the entire agreement and supersedes all other prior and
contemporaneous agreements and undertakings, both written and oral,
among the parties hereto with regard to the subject matter hereof.
Neither this Agreement nor any term hereof may be amended except
pursuant to a written instrument executed by the Company and the
Representatives. In the event that any one or more of the
provisions contained herein, or the application thereof in any
circumstance, is held invalid, illegal or unenforceable as written
by a court of competent jurisdiction, then such provision shall be
given full force and effect to the fullest possible extent that it
is valid, legal and enforceable, and the remainder of the terms and
provisions herein shall be construed as if such invalid, illegal or
unenforceable term or provision was not contained herein, but only
to the extent that giving effect to such provision and the
remainder of the terms and provisions hereof shall be in accordance
with the intent of the parties as reflected in this Agreement. No
implied waiver by a party shall arise in the absence of a waiver in
writing signed by such party. No failure or delay in exercising any
right, power, or privilege hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise thereof preclude
any other or further exercise thereof or the exercise of any right,
power, or privilege hereunder.
2. GOVERNING
LAW AND TIME; WAIVER OF JURY TRIAL. THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE
OF NEW YORK WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAWS.
SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME. EACH PARTY 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.
3. CONSENT
TO JURISDICTION. EACH PARTY HEREBY IRREVOCABLY SUBMITS TO
THE EXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL COURTS SITTING
IN THE CITY OF NEW YORK, BOROUGH OF MANHATTAN, FOR THE ADJUDICATION
OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH ANY TRANSACTION
CONTEMPLATED HEREBY, AND HEREBY IRREVOCABLY WAIVES, AND AGREES NOT
TO ASSERT IN ANY SUIT, ACTION OR PROCEEDING, ANY CLAIM THAT IT IS
NOT PERSONALLY SUBJECT TO THE JURISDICTION OF ANY SUCH COURT, THAT
SUCH SUIT, ACTION OR PROCEEDING IS BROUGHT IN AN INCONVENIENT FORUM
OR THAT THE VENUE OF SUCH SUIT, ACTION OR PROCEEDING IS IMPROPER.
EACH PARTY HEREBY IRREVOCABLY WAIVES PERSONAL SERVICE OF PROCESS
AND CONSENTS TO PROCESS BEING SERVED IN ANY SUCH SUIT, ACTION OR
PROCEEDING BY MAILING A COPY THEREOF (CERTIFIED OR REGISTERED MAIL,
RETURN RECEIPT REQUESTED) TO SUCH PARTY AT THE ADDRESS IN EFFECT
FOR NOTICES TO IT UNDER THIS AGREEMENT AND AGREES THAT SUCH SERVICE
SHALL CONSTITUTE GOOD AND SUFFICIENT SERVICE OF PROCESS AND NOTICE
THEREOF. NOTHING CONTAINED HEREIN SHALL BE DEEMED TO LIMIT IN ANY
WAY ANY RIGHT TO SERVE PROCESS IN ANY MANNER PERMITTED BY
LAW.
-38-
4. Counterparts. This Agreement
may be executed in two or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute one
and the same instrument. Delivery of an executed Agreement by one
party to the other may be made by facsimile or electronic
transmission.
5. Construction.
(a) the section and
exhibit headings herein are for convenience only and shall not
affect the construction hereof;
(b) words defined in
the singular shall have a comparable meaning when used in the
plural, and vice versa;
(c) the words
“hereof,” “hereto,” “herein”
and “hereunder” and words of similar import, when used
in this Agreement, shall refer to this Agreement as a whole and not
to any particular provision of this Agreement;
(d) wherever the word
“include,” “includes” or
“including” is used in this Agreement, it shall be
deemed to be followed by the words “without
limitation”;
(e) references herein
to any gender shall include each other gender;
(f) references herein
to any law, statute, ordinance, code, regulation, rule or other
requirement of any Governmental Authority shall be deemed to refer
to such law, statute, ordinance, code, regulation, rule or other
requirement of any Governmental Authority as amended, reenacted,
supplemented or superseded in whole or in part and in effect from
time to time and also to all rules and regulations promulgated
thereunder;
(g) if the last day for
the giving of any notice or the performance of any act required or
permitted under this Agreement is a day that is not a Business Day,
then the time for the giving of such notice or the performance of
such action shall be extended to the next succeeding Business
Day;
(h) “knowledge” means, as it pertains
to the Company, the actual knowledge of the officers and directors
of the Company, together with the knowledge which they would have
had if they had conducted a reasonable inquiry of the relevant
persons into the relevant subject matter;
(i) “Governmental
Authority” means
(i) any federal, provincial, state, local, municipal, national or
international government or governmental authority, regulatory or
administrative agency, governmental commission, department, board,
bureau, agency or instrumentality, court, tribunal, arbitrator or
arbitral body (public or private); (ii) any self-regulatory
organization; or (iii) any political subdivision of any of the
foregoing;
(j) “Law” means any and all laws,
including all federal, state, local, municipal, national or foreign
statutes, codes, ordinances, guidelines, decrees, rules,
regulations and by-laws and all judicial, arbitral, administrative,
ministerial, departmental or regulatory judgments, orders,
directives, decisions, rulings or awards or other requirements of
any Governmental Authority, binding on or affecting the person
referred to in the context in which the term is used and rules,
regulations and policies of any stock exchange on which securities
of the Company are listed for trading; and
-39-
(k) “Business Day” means any day on
which Nasdaq and commercial banks in the City of New York are open
for business.
6. General
Provisions.
Each of
the parties hereto acknowledges that it is a sophisticated business
person who was adequately represented by counsel during
negotiations regarding the provisions hereof, including the
indemnification provisions of Section 9 and the contribution
provisions of Section 10, and is fully informed regarding said
provisions. Each of the parties hereto further acknowledges that
the provisions of Section 9 and Section 10 hereof fairly allocate
the risks in light of the ability of the parties to investigate the
Company, its affairs and its business in order to assure that
adequate disclosure has been made in the Registration Statement,
any preliminary prospectus, the Time of Sale Prospectus, each free
writing prospectus and the Prospectus (and any amendments and
supplements to the foregoing), as contemplated by the Securities
Act and the Exchange Act.
[Signature
Page Follows]
-40-
If the
foregoing correctly sets forth the understanding between the
Company and the Underwriters, please so indicate in the space
provided below for that purpose, whereupon this letter shall
constitute a binding agreement between the Company and the
Underwriters.
Very
truly yours,
|
|
|
|
By:
|
/s/
Bizuo (▇▇▇▇) ▇▇▇
|
|
|
Name:
Bizuo (▇▇▇▇) Liu
|
|
|
Title:
Chief Executive Officer
|
ACCEPTED as of the
date first-above written:
|
CANTOR
▇▇▇▇▇▇▇▇▇▇ & CO.
|
|
|
|
|
|
By:
|
/s/
▇▇▇▇ ▇▇▇▇▇▇
|
|
|
Name:
▇▇▇▇ ▇▇▇▇▇▇
|
|
|
Title:
Global Chief Operating Officer
|
|
▇▇▇▇▇▇
▇. ▇▇▇▇▇ & CO. INCORPORATED
|
|
|
|
|
|
By:
|
/s/
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
|
|
|
Name:
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
|
|
|
Title:
Managing Director
|
For
themselves and the other several Underwriters named in Schedule A to this
Agreement.
SCHEDULE A
|
Underwriters
|
Number
of
Firm
Shares
to
be Purchased
|
|
Cantor ▇▇▇▇▇▇▇▇▇▇
& Co.
|
669,118
|
|
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
& Co. Incorporated
|
360,294
|
|
Total
|
1,029,412
|
SCHEDULE B
Free Writing Prospectuses Included in the Time of Sale
Prospectus
None
SCHEDULE C
Pricing Information
Firm
Shares: 1,029,412
Option
Shares: 154,411
Price
to Public: $17.00
Underwriters’
Discount: $1.19
Exhibit A
Form of Lock-up Agreement
Cantor
▇▇▇▇▇▇▇▇▇▇ & Co.
▇▇▇
▇▇▇▇ ▇▇▇▇▇▇
▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn:
Equity Capital Markets
▇▇▇▇▇▇
▇. ▇▇▇▇▇ & Co. Incorporated
▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Re: Proposed Registered Follow-On Offering by Cellular Biomedicine
Group, Inc.
Ladies
and Gentlemen:
The
undersigned, an officer and/or a director of Cellular Biomedicine
Group, Inc., a Delaware corporation (the “Company”), understands
that Cantor ▇▇▇▇▇▇▇▇▇▇ & Co. (“CF&Co.”) and ▇▇▇▇▇▇
▇. ▇▇▇▇▇ & Co. Incorporated (“Baird”) propose to enter
into an Underwriting Agreement (the “Underwriting Agreement”)
with the Company relating to the proposed registered follow-on
offering to be conducted on or before April 3, 2019 (the
“Offering”) of shares of
the Company’s common stock, par value $0.001 per share (the
“Common
Stock”). The undersigned acknowledges that CF&Co.
and Baird are relying on the representations and agreements of the
undersigned contained in this lock-up agreement in conducting the
Offering and, at a subsequent date, in entering into the
Underwriting Agreement and other underwriting arrangements with the
Company with respect to the Offering.
In
recognition of the benefit that the Offering will confer upon the
undersigned as an officer and/or a director of the Company, and for
other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the undersigned agrees that,
during the period beginning on the date hereof and ending on the
date that is 90 days from the date of the Underwriting Agreement
(the “Lock-Up
Period”), the undersigned will not (and will not cause
any immediate family member sharing the same household to), without
the prior written consent of CF&Co. and Baird, which may
withhold its consent in its sole discretion, directly or
indirectly, (i) sell, offer to sell, contract to sell or lend,
effect any short sale or establish or increase a Put Equivalent
Position (as defined in Rule 16a-1(h) under the Securities Exchange
Act of 1934, as amended (the “Exchange Act”)) or
liquidate or decrease any Call Equivalent Position (as defined in
Rule 16a-1(b) under the Exchange Act), pledge, hypothecate or grant
any security interest in, or in any other way transfer or dispose
of, any Common Stock or any securities convertible into or
exchangeable or exercisable for Common Stock, in each case 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”),
(ii) make any demand for, or exercise any right with respect to the
registration of any of the Lock-Up Securities, or the filing of any
registration statement, prospectus or prospectus supplement (or an
amendment or supplement thereto) in connection therewith, under the
Securities Act of 1933, as amended, (iii) enter into any swap,
hedge or any other agreement or any transaction that transfers, in
whole or in part, the economic consequence of ownership of the
Lock-Up Securities, whether any such swap or transaction is to be
settled by delivery of Common Stock or other securities, in cash or
otherwise, or (iv) publicly announce the intention to do any of the
foregoing.
A-1
Notwithstanding the
foregoing, and subject to the conditions below, the undersigned may
transfer the Lock-Up Securities pursuant to clauses
(i) through (vii) below without the prior written consent
of CF&Co. and Baird, provided that, with respect to
clauses (i) through (iv) below, (1) prior to any such
transfer, CF&Co. and Baird receive a signed lock-up agreement,
substantially in the form of this lock-up agreement, for the
balance of the Lock-Up Period from each donee, trustee, distributee
or transferee, as the case may be, (2) any such transfer shall
not involve a disposition for value, (3) in the case of
clauses (i) through (iii) below, such transfers are not
required to be reported with the Securities and Exchange Commission
under the Exchange Act, and (4) the undersigned does not
otherwise voluntarily effect any public filing or report regarding
such transfers:
(i) as
a bona fide gift or gifts;
(ii)
to any trust for the direct or indirect benefit of the undersigned
or the immediate family of the undersigned (for purposes of this
lock-up agreement, “immediate family” shall mean any
relationship by blood, marriage or adoption, not more remote than
first cousin);
(iii)
pursuant to a qualified domestic order or in connection with a
divorce settlement;
(iv)
by will or intestate succession to the legal representative, heir,
beneficiary or immediate family of the undersigned upon the death
of the undersigned;
(v)
if the undersigned is a natural person, to the Company pursuant to
the Company’s right of repurchase upon termination of the
undersigned’s service with the Company;
(vi)
upon a vesting event of the Company’s securities or upon the
exercise of options issued pursuant to the Company’s equity
incentive plans in full or partial payment of taxes or tax
withholding obligations required to be paid or satisfied upon such
vesting or exercise, provided that if the undersigned is
required to make a filing under the Exchange Act, such filing shall
include a footnote describing the purpose of the transaction;
or
(vii)
pursuant to a trading plan established prior to March 1, 2019
pursuant to Rule 10b5-1 of the Exchange Act, provided that to the extent a public
announcement or filing under the Exchange Act, if any, is required
of or voluntarily made by or on behalf of the undersigned regarding
such sale, such announcement or filing shall include a statement to
the effect that such sale was made pursuant to a
Rule 10b5-1 trading plan.
The
undersigned further agrees that the foregoing provisions shall be
equally applicable to any Common Stock the undersigned may purchase
or otherwise receive in the Offering.
Nothing
in this lock-up agreement shall preclude the undersigned’s
ability to make elections under Section 83(b) of the Internal
Revenue Code of 1986, as amended, with respect to any Company
securities received as compensation for services rendered to the
Company, its subsidiaries or affiliates.
A-2
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 Lock-Up Securities except in compliance
with the foregoing restrictions.
With
respect to the Offering only, the undersigned waives any
registration rights relating to registration under the Securities
Act of the offer and sale of any shares of Common Stock and/or any
options or warrants or other rights to acquire Common Stock or any
securities exchangeable or exercisable for or convertible into
Common Stock, or to acquire other securities or rights ultimately
exchangeable or exercisable for or convertible into Common Stock,
owned either of record or beneficially by the undersigned,
including any rights to receive notice of the
Offering.
The
undersigned confirms that the undersigned has not, and has no
knowledge that any immediate family member sharing the same
household has, directly or indirectly, taken any action designed to
or that might reasonably be expected to cause or result in the
stabilization or manipulation of the price of any security of the
Company to facilitate the sale of the Common Stock The undersigned
will not, and will cause any immediate family member sharing the
same household not to take, directly or indirectly, any such
action.
As used
herein, “immediate family” shall mean the spouse,
domestic partner, lineal descendant, father, mother, brother,
sister, or any other person with whom the undersigned has a
relationship by blood, marriage or adoption not more remote than
first cousin.
The
undersigned represents and warrants that the undersigned has full
power, capacity and authority to enter into this letter agreement.
This letter agreement is irrevocable and will be binding on the
undersigned and the successors, heirs, personal representatives and
assigns of the undersigned.
This
lock-up agreement shall be governed by and construed in accordance
with the laws of the State of New York.
Whether
or not the Offering actually occurs depends on a number of factors,
including market conditions. Any Offering will only be made
pursuant to an Underwriting Agreement, the terms of which are
subject to negotiation between the Company, CF&Co. and
Baird.
This
lock-up agreement shall automatically terminate, and the
undersigned shall be released from its obligations hereunder, upon
the earliest to occur, if any, of (i) the Company advising
CF&Co. and Baird in writing, prior to the execution of the
Underwriting Agreement, that it has determined not to proceed with
the Offering, (ii) the executed Underwriting Agreement being
terminated prior to the closing of the Offering (other than the
provisions thereof that survive termination), and (iii) April 3,
2019, in the event
that the Underwriting Agreement has not been executed by such
date.
[Signature
Page Follows]
A-3
Very
truly yours,
___________________________________
Name of Director/Officer (Print exact
name)
By:
_________________________________
Signature
A-4
Exhibit B
Parties to Lock-up Agreement
1.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇– Independent Director
2.
▇▇▇▇▇
▇▇▇▇▇▇▇– Independent Director
3.
Bosun Hau –
Independent Director
4.
Gang Ji –
Independent Director
5.
▇▇▇ ▇▇▇ (▇▇▇▇▇)
▇▇▇– Independent Director
6.
▇▇▇▇▇ ▇▇▇▇▇ –
Independent Director
7.
▇▇▇▇▇▇▇▇
▇▇▇▇– Independent Director
8.
▇▇▇▇ (Bizuo) Liu
– Executive Director, CEO, CFO
9.
▇▇▇▇▇▇ ▇▇▇, PhD, BS
– Chief Scientific Officer
10.
Li (▇▇▇▇▇) ▇▇▇▇▇,
▇▇ – Chief Production Officer
11.
▇▇▇▇▇▇ ▇▇▇▇, JD,
MBA – Chief Legal Officer, Corporate Development &
Secretary
12.
▇▇▇▇▇▇ ▇▇▇▇▇
– VP Finance
13.
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– Head of Strategy and Investor Relations
B-1