INTELLIPHARMACEUTICS INTERNATIONAL INC. UNDERWRITING AGREEMENT
EXHIBIT
1.1
October
●, 2018
▇.▇.
▇▇▇▇▇▇▇▇▇▇ & Co., LLC
▇▇▇
▇▇▇▇ ▇▇▇▇▇▇
▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies
and Gentlemen:
The
undersigned, Intellipharmaceutics International Inc., a corporation
formed under the laws of Canada (collectively with its subsidiaries
and affiliates, including, without limitation, all entities
disclosed or described in the Registration Statement (as
hereinafter defined) as being subsidiaries or affiliates of
Intellipharmaceutics International Inc. (the “Company”)), hereby confirms its
agreement (this “Agreement”) with ▇.▇. ▇▇▇▇▇▇▇▇▇▇
& Co., LLC (hereinafter referred to as “you”
(including its correlatives) or the “Underwriter”) as
follows:
|
1.
|
Purchase
and Sale of Securities.
|
1.1
Firm
Securities.
1.1.1
Nature and Purchase of
Firm Securities.
(i) On
the basis of the representations and warranties herein contained,
but subject to the terms and conditions herein set forth, the
Company agrees to issue and sell to the Underwriter, an aggregate
of [ ] shares (“Firm
Shares”) of the Company’s common shares, no par
value (the “Common
Shares”), and an aggregate of [ ] pre-funded warrants
(the “Pre-Funded
Warrants”) in the form filed as an exhibit to the
Registration Statement (as hereinafter defined) (the
“Pre-Funded Warrant
Agreement”) exercisable into an aggregate of [ ]
shares of Common Shares (the “Warrant Shares”), together with
Common Share purchase warrants to purchase up to an aggregate of [
] shares of Common Shares (the “Firm Warrants”) which shall have
an exercise price of $[ ], subject to adjustment as provided in the
warrant agreement in the form filed as an exhibit to the
Registration Statement (the “Warrant Agreement”). The Firm
Shares, the Firm Warrants and the Pre-Funded Warrants are referred
to herein as the “Firm
Securities.”
(ii)
The Underwriter agrees to purchase from the Company the Firm
Securities at a purchase price of $[ ] per share of Common Share ([
]% of the per Firm Share offering price), $[ ] per Pre-Funded
Warrant ([ ]% of the per Pre-Funded Warrant offering price) and $[
] per Firm Warrant. The Firm Securities are to be offered initially
to the public at the offering price set forth on the cover page of
the Prospectus (as defined in Section 2.1.1 hereof).
1.1.2
Securities Payment and
Delivery.
(i)
Delivery and payment for the Firm Securities shall be made at 10:00
a.m., Eastern time, on the second (2nd) Business Day following the
effective date (the “Effective Date”) of the
Registration Statement (as defined in Section 2.1.1 below) under
the Securities Act of 1933, as amended (the “Securities Act”) (or the third
(3rd) Business Day following the Effective Date if the pricing for
the Offering (as defined in Section 2.1.1 below) occurs after 4:01
p.m., Eastern time on the Effective Date) or at such earlier time
as shall be agreed upon by the Underwriter and the Company, at the
offices of ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP, ▇▇
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (“Underwriter
Counsel”), or at such other place (or remotely by
facsimile or other electronic transmission) as shall be agreed upon
by the Underwriter and the Company. The hour and date of delivery
and payment for the Firm Securities is called the
“Closing
Date.”
1
(ii)
Payment for the Firm Securities shall be made on the Closing Date
by wire transfer in Federal (same day) funds, payable to the order
of the Company upon delivery of the Firm Securities, of which the
Firm Shares shall be delivered via the Depository Trust Company
(“DTC”) and the
Firm Warrants and the Pre-Funded Warrants shall be delivered in
certificated form, for the account of the Underwriter. The Firm
Securities shall be registered in such name or names and in such
authorized denominations as the Underwriter may request in writing
at least two (2) full Business Days prior to the Closing Date. The
Company shall not be obligated to sell or deliver the Firm
Securities except upon tender of payment by the Underwriter for all
of the Firm Securities. The term “Business Day” means any day other
than a Saturday, a Sunday or a legal holiday or a day on which
banking institutions are authorized or obligated by law to close in
New York, New York.
1.2
Over-allotment
Option.
1.2.1
Option Securities.
For the purposes of covering any over-allotments in connection with
the distribution and sale of the Firm Securities, the Company
hereby grants to the Underwriter an option (the “Over-allotment Option”) to
purchase up to (a) [ ] additional Common Shares, representing
fifteen percent ([ ]%) of the Firm Shares sold in the offering,
from the Company (the “Option
Shares”), and/or (b) warrants to purchase up to [ ]
Common Shares, representing fifteen percent ([ ]%) of the Firm
Warrants sold in the offering (the “Option Warrants” and, collectively
with the Option Shares, the “Option Securities”). The purchase
price to be paid per Option Security shall be equal to the price
per Firm Share or Firm Warrant, as applicable, which are set forth
in Section 1.1.1 hereof. The Common Shares underlying the Firm
Warrants and the Option Warrants are hereinafter referred to as the
“Registered Warrant
Shares”. The Firm Securities, the Warrant Shares, the
Registered Warrant Shares and the Option Securities are hereinafter
referred to together as the “Public Securities.” The offering
and sale of the Public Securities is hereinafter referred to as the
“Offering.”
1.2.2
Exercise of Option.
The Over-allotment Option granted pursuant to Section 1.2.1 hereof
may be exercised by the Underwriter as to all (at any time) or any
part (from time to time) of the Option Securities within thirty
(30) days after the Effective Date. The Underwriter shall not be
under any obligation to purchase any Option Securities prior to the
exercise of the Over-allotment Option. The Over-allotment Option
granted hereby may be exercised by the giving of oral notice to the
Company from the Underwriter, which must be confirmed in writing by
overnight mail or facsimile or other electronic transmission
setting forth the number of Option Securities to be purchased and
the date and time for delivery of and payment for the Option
Securities (the “Option
Closing Date”), which shall not be earlier than two
(2) Business Days nor later than three (3) full Business Days after
the date of the notice or such other time as shall be agreed upon
by the Company and the Underwriter, at the offices of
Underwriter’s Counsel or at such other place (including
remotely by facsimile or other electronic transmission) as shall be
agreed upon by the Company and the Underwriter. If such delivery
and payment for the Option Securities does not occur on the Closing
Date, the Option Closing Date will be as set forth in the notice.
Upon exercise of the Over-allotment Option with respect to all or
any portion of the Option Securities, subject to the terms and
conditions set forth herein, (i) the Company shall become obligated
to sell to the Underwriter the number of Option Securities
specified in such notice and (ii) the Underwriter shall purchase
the total number of Option Securities specified in such
notice.
1.2.3
Payment and
Delivery. Payment for the Option Securities shall be made on
the Option Closing Date by wire transfer in Federal (same day)
funds, payable to the order of the Company upon delivery to you of
certificates (in form and substance satisfactory to the
Underwriter) representing the Option Securities (or through the
facilities of DTC) for the account of the Underwriter. The Option
Securities shall be registered in such name or names and in such
authorized denominations as the Underwriter may request in writing
at least two (2) full Business Days prior to the Option Closing
Date. The Company shall not be obligated to sell or deliver the
Option Securities except upon tender of payment by the Underwriter
for applicable Option Securities.
1.3
Underwriter’s
Warrants.
1.3.1
Purchase Warrants.
The Company hereby agrees to issue and sell to the Underwriter
(and/or its designees) on the Closing Date a warrant
(“Underwriter’s
Warrant” and collectively with the Pre-Funded Warrants and Firm
Warrants, the “Warrants”) for the purchase of an
aggregate of [ ] Common Shares, representing 6.0% of the Firm
Shares and Common Share equivalents (including the Option Shares if
they are purchased). The Underwriter’s Warrant agreement, in
the form filed as an exhibit to the Registration Statement (the
“Underwriter’s Warrant
Agreement”), shall be exercisable, in whole or in
part, commencing on a date which is [ ( )] months after the
Effective Date and expiring on the five-year anniversary of the
Effective Date at an initial exercise price of $[ ] per Common
Share, which is equal to 125% of the initial public offering price
of the Firm Shares. The Underwriter’s Warrant Agreement and
the Common Shares issuable upon exercise thereof are hereinafter
referred to together as the “Underwriter’s Securities.”
The Underwriter understands and agrees that there are significant
restrictions pursuant to FINRA Rule 5110 against transferring the
Underwriter’s Warrant Agreement and the underlying Common
Shares during the one hundred eighty (180) days after the Effective
Date and by its acceptance thereof shall agree that it will not
sell, transfer, assign, pledge or hypothecate the
Underwriter’s Warrant Agreement, or any portion thereof, or
be the subject of any hedging, short sale, derivative, put or call
transaction that would result in the effective economic disposition
of such securities for a period of one hundred eighty (180) days
following the Effective Date to anyone other than (i) an
Underwriter or a selected dealer in connection with the Offering,
or (ii) a bona fide officer or partner of the Underwriter or of any
such Underwriter or selected dealer; and only if any such
transferee agrees to the foregoing lock-up
restrictions.
2
1.3.2
Delivery. Delivery
of the Underwriter’s Warrant Agreement shall be made on the
Closing Date and shall be issued in the name or names and in such
authorized denominations as the Underwriter may
request.
|
2.
|
Representations
and Warranties of the Company. The Company represents and warrants
to the Underwriter as of the Applicable Time (as defined below), as
of the Closing Date and as of the Option Closing Date, if any, as
follows:
|
2.1
Filing of Registration
Statement.
2.1.1
Pursuant to the Securities
Act. The Company has filed with the U.S. Securities and
Exchange Commission (the “Commission”) a registration
statement, and an amendment or amendments thereto, on Form F-1
(File No. 333-227448), including any related prospectus or
prospectuses, for the registration of the Public Securities under
the Securities Act, which registration statement and amendment or
amendments have been prepared by the Company in all material
respects in conformity with the requirements of the Securities Act
and the rules and regulations of the Commission under the
Securities Act (the “Securities Act Regulations”) and
will contain all material statements that are required to be stated
therein in accordance with the Securities Act and the Securities
Act Regulations. Except as the context may otherwise require, such
registration statement, as amended, on file with the Commission at
the time the registration statement became effective (including the
Preliminary Prospectus included in the registration statement,
financial statements, schedules, exhibits and all other documents
filed as a part thereof or incorporated therein and all information
deemed to be a part thereof as of the Effective Date pursuant to
paragraph (b) of Rule 430A of the Securities Act Regulations (the
“Rule 430A
Information”)), is referred to herein as the
“Registration
Statement.” If the Company files any registration
statement pursuant to Rule 462(b) of the Securities Act
Regulations, then after such filing, the term “Registration Statement” shall
include such registration statement filed pursuant to Rule 462(b).
The Registration Statement has been declared effective by the
Commission on the date hereof.
Each
prospectus used prior to the effectiveness of the Registration
Statement, and each prospectus that omitted the Rule 430A
Information that was used after such effectiveness and prior to the
execution and delivery of this Agreement, is herein called a
“Preliminary
Prospectus.” The Preliminary Prospectus, subject to
completion, dated October ●, 2018, that was included in the
Registration Statement immediately prior to the Applicable Time is
hereinafter called the “Pricing Prospectus.” The final
prospectus in the form first furnished to the Underwriter for use
in the Offering is hereinafter called the “Prospectus.” Any reference to the
“most recent Preliminary
Prospectus” shall be deemed to refer to the latest
Preliminary Prospectus included in the Registration
Statement.
All
references in this agreement (this “Agreement”) to the
Registration Statement, the Rule 462(b) Registration Statement, any
Preliminary Prospectus or the Prospectus, or any amendments or
supplements to any of the foregoing, shall be deemed to include any
copy thereof filed with the Commission pursuant to its Electronic
Data Gathering, Analysis and Retrieval System (“▇▇▇▇▇”).
“Applicable Time” means [ p.m.],
Eastern time, on the date of this Agreement.
3
“Issuer Free Writing Prospectus”
means any “issuer free writing prospectus,” as defined
in Rule 433 of the Securities Act Regulations (“Rule 433”), including without
limitation any “free writing prospectus” (as defined in
Rule 405 of the Securities Act Regulations) relating to the Public
Securities that is (i) required to be filed with the Commission by
the Company, (ii) a “road show that is a written
communication” within the meaning of Rule 433(d)(8)(i),
whether or not required to be filed with the Commission, or (iii)
exempt from filing with the Commission pursuant to Rule
433(d)(5)(i) because it contains a description of the Public
Securities or of the Offering that does not reflect the final
terms, in each case in the form filed or required to be filed with
the Commission or, if not required to be filed, in the form
retained in the Company’s records pursuant to Rule
433(g).
“Issuer General Use Free Writing
Prospectus” means any Issuer Free Writing Prospectus
that is intended for general distribution to prospective investors
(other than a “bona
fide electronic road show,” as defined in Rule 433(the
“Bona Fide Electronic Road Show”)), as evidenced by its
being specified in Schedule 1-B
hereto.
“Issuer Limited Use Free Writing
Prospectus” means any Issuer Free Writing Prospectus
that is not an Issuer General Use Free Writing
Prospectus.
“Pricing Disclosure Package” means
any Issuer General Use Free Writing Prospectus issued at or prior
to the Applicable Time, the Pricing Prospectus and the information
included on Schedule 1-A hereto, all considered
together.
2.1.2
Pursuant to the Exchange
Act. The Common Shares are deemed registered pursuant to
Section 12(b) under the Securities Exchange Act of 1934, as amended
(the “Exchange
Act”). The Company has taken no action designed to, or
likely to have the effect of, terminating the registration of the
Common Shares under the Exchange Act, nor has the Company received
any notification that the Commission is contemplating terminating
such registration.
2.2
Stock Exchange
Listing. The Common Shares are listed on The Nasdaq Capital
Market and the Toronto Stock Exchange (collectively, the
“Exchange”), and
the Company has taken no action designed to, or likely to have the
effect of, delisting the Common Shares from the Exchange, nor has
the Company received any notification that the Exchange is
contemplating terminating such listing except as described in the
Registration Statement, the Pricing Disclosure Package or the
Prospectus. The Company has (a) submitted the Listing of Additional
Shares Notification Form with The Nasdaq Capital Market and (b)
made a listing application to the Toronto Stock Exchange; in each
case, with respect with respect to the Offering of the Public
Securities (including the Warrant Shares and the Registered Warrant
Shares).
2.3
No Stop Orders,
etc. Neither the Commission nor, to the Company’s
knowledge, any state regulatory authority has issued any order
preventing or suspending the use of the Registration Statement, any
Preliminary Prospectus or the Prospectus or has instituted or, to
the Company’s knowledge, threatened to institute, any
proceedings with respect to such an order. The Company has complied
with each request (if any) from the Commission for additional
information.
2.4
Disclosures in
Registration Statement.
2.4.1
Compliance with Securities
Act and 10b-5 Representation.
(i)
Each of the Registration Statement and any post-effective amendment
thereto, at the time it became effective, complied in all material
respects with the requirements of the Securities Act and the
Securities Act Regulations. Each Preliminary Prospectus, including
the prospectus filed as part of the Registration Statement as
originally filed or as part of any amendment or supplement thereto,
and the Prospectus, at the time each was filed with the Commission,
complied in all material respects with the requirements of the
Securities Act and the Securities Act Regulations. Each Preliminary
Prospectus delivered to the Underwriter for use in connection with
this Offering and the Prospectus was or will be identical to the
electronically transmitted copies thereof filed with the Commission
pursuant to ▇▇▇▇▇, except to the extent permitted by Regulation
S-T.
4
(ii)
Neither the Registration Statement nor any amendment thereto, at
its effective time, as of the Applicable Time, at the Closing Date
or at any Option Closing Date (if any), contained, contains or will
contain an untrue statement of a material fact or omitted, omits or
will omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; provided,
however, that this representation and warranty shall not apply to
the Underwriters’ Information (as such term is defined in
Section 2.4.1(iii) below).
(iii)
The Pricing Disclosure Package, as of the Applicable Time,
at the Closing Date or at any Option Closing Date (if any), did
not, does not and will not include an untrue statement of a
material fact or omit to state a material fact necessary in order
to make the statements therein, in the light of the circumstances
under which they were made, not misleading; and each Issuer Limited
Use Free Writing Prospectus hereto does not conflict with the
information contained in the Registration Statement, any
Preliminary Prospectus, the Pricing Prospectus or the Prospectus,
and each such Issuer Limited Use Free Writing Prospectus, as
supplemented by and taken together with the Pricing Prospectus as
of the Applicable Time, did not include an untrue statement of a
material fact or omit to state a material fact necessary in order
to make the statements therein, in light of the circumstances under
which they were made, not misleading; provided, however, that this representation and
warranty shall not apply to statements made or statements omitted
in reliance upon and in conformity with written information
furnished to the Company with respect to the Underwriter expressly
for use in the Registration Statement, the Pricing Prospectus, the
Pricing Disclosure Package or the Prospectus or any amendment
thereof or supplement thereto. The parties acknowledge and agree
that such information provided by or on behalf of any Underwriter
consists solely of the following disclosure contained in the
“Underwriting” section of the Prospectus: (i) the third
paragraph under the heading “Underwriting”; (ii) the
information under the heading “Underwriting Discounts,
Commissions and Expenses,” and (iii) the first three
paragraphs under the heading “Stabilization, Short Positions
and Penalty Bids” (the “Underwriter’s Information”);
and
(iv)
Neither the Prospectus nor any amendment or supplement thereto
(including any prospectus wrapper), as of its issue date, at the
time of any filing with the Commission pursuant to Rule 424(b), at
the Closing Date or at any Option Closing Date, included, includes
or will include an untrue statement of a material fact or omitted,
omits or will omit to state a material fact necessary in order to
make the statements therein, in the light of the circumstances
under which they were made, not misleading; provided, however, that this representation and
warranty shall not apply to the Underwriter’s
Information.
(v)
The documents incorporated by reference in the Registration
Statement, the Pricing Prospectus, the Pricing Disclosure Package
and the Prospectus, when they became effective or were filed with
the Commission, as the case may be, conformed in all material
respects to the requirements of the Securities Act or the Exchange
Act, as applicable, and the rules and regulations of the Commission
thereunder and none of such documents contained any untrue
statement of a material fact or omitted to state any material fact
required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were
made, not misleading; and any further documents so filed and
incorporated by reference in the Registration Statement, the
Pricing Prospectus, the Pricing Disclosure Package and the
Prospectus, when such documents become effective or are filed with
the Commission, as the case may be, will conform in all material
respects to the requirements of the Securities Act or the Exchange
Act, as applicable, and the rules and regulations of the Commission
thereunder, and will not contain any untrue statement of a material
fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein, in the light
of the circumstances under which they were made, not
misleading.
2.4.2
Disclosure of
Agreements. The agreements and documents described in the
Registration Statement, the Pricing Disclosure Package and the
Prospectus conform in all material respects to the descriptions
thereof contained or incorporated by reference therein and there
are no agreements or other documents required by the Securities Act
and the Securities Act Regulations to be described in the
Registration Statement, the Pricing Disclosure Package and the
Prospectus or to be filed with the Commission as exhibits to the
Registration Statement or to be incorporated by reference in the
Registration Statement, the Pricing Disclosure Package or the
Prospectus, that have not been so described or filed or
incorporated by reference. Each agreement or other instrument
(however characterized or described) to which the Company is a
party or by which it is or may be bound or affected and (i) that is
referred to or incorporated by reference in the Registration
Statement, the Pricing Disclosure Package and the Prospectus, or
(ii) is material to the Company’s business, has been duly
authorized and validly executed by the Company, is in full force
and effect in all material respects and is enforceable against the
Company and, to the Company’s knowledge, the other parties
thereto, in accordance with its terms, except (x) as such
enforceability may be limited by bankruptcy, insolvency,
reorganization or similar laws affecting creditors’ rights
generally, (y) as enforceability of any indemnification or
contribution provision may be limited under the federal and state
securities laws, and (z) that the remedy of specific performance
and injunctive and other forms of equitable relief may be subject
to the equitable defenses and to the discretion of the court before
which any proceeding therefor may be brought. None of such
agreements or instruments has been assigned by the Company, and
neither the Company nor, to the Company’s knowledge, any
other party is in default thereunder and, to the Company’s
knowledge, no event has occurred that, with the lapse of time or
the giving of notice, or both, would constitute a default
thereunder, except for a default or event which would not
reasonably be expected to result in a Material Adverse Change (as
such term is defined in Section 2.5.1 below). To the
Company’s knowledge, performance by the Company of the
material provisions of such agreements or instruments will not
result in a violation of any existing applicable law, rule,
regulation, judgment, order or decree of any governmental agency or
court, domestic or foreign, having jurisdiction over the Company or
any of its assets or businesses (each, a “Governmental Entity”), including,
without limitation, those relating to environmental laws and
regulations, except for
any such violation that would not have or reasonably be expected to
result in a Material Adverse Change.
5
2.4.3
Prior Securities
Transactions. Subsequent to the respective dates as of which
information is given in the Registration Statement, the Pricing
Disclosure Package and the Prospectus, no securities of the Company
have been sold by the Company or by or on behalf of, or for the
benefit of, any person or persons controlling, controlled by or
under common control with the Company, except as disclosed in the
Registration Statement, the Pricing Disclosure Package and the
Prospectus.
2.4.4
Regulations. The
disclosures in the Registration Statement, the Pricing Disclosure
Package and the Prospectus concerning the effects of federal,
state, local and all foreign regulation on the Offering and the
Company’s business as currently contemplated are correct in
all material respects and no other such regulations are required to
be disclosed in the Registration Statement, the Pricing Disclosure
Package and the Prospectus which are not so disclosed.
2.4.5
No Other Distribution of
Offering Materials. The Company has not, directly or
indirectly, distributed and will not distribute any offering
material in connection with the Offering other than any Preliminary
Prospectus, the Pricing Prospectus, the Pricing Disclosure Package,
the Prospectus and other materials, if any, permitted under the
Securities Act and consistent with Section 3.2 below.
2.5
Changes After Dates in
Registration Statement.
2.5.1
No Material Adverse
Change. Since the respective dates as of which information
is given in the Registration Statement, the Pricing Disclosure
Package and the Prospectus, except as otherwise specifically stated
therein and except in accordance with its ordinary operations: (i)
there has been no material adverse change in the financial position
or results of operations of the Company, nor any change or
development that, singularly or in the aggregate, would reasonably
be expected to involve a material adverse change, in or affecting
the condition (financial or otherwise), results of operations,
business, assets or prospects of the Company (a “Material Adverse Change”); (ii)
there have been no material transactions entered into by the
Company, other than as contemplated pursuant to this Agreement; and
(iii) no officer or director of the Company has resigned from any
position with the Company.
2.5.2
Recent Securities
Transactions, etc. Subsequent to the respective dates as of
which information is given in the Registration Statement, the
Pricing Disclosure Package and the Prospectus, and except as may
otherwise be indicated or contemplated herein or disclosed in the
Registration Statement, the Pricing Disclosure Package and the
Prospectus, the Company has not: (i) issued any securities, other
than (i) grants under any stock compensation plan and (ii) Common
Shares issued upon the exercise or conversion of then outstanding
options, warrants and/or convertible securities, or incurred any
liability or obligation, direct or contingent, for borrowed money;
or (ii) declared or paid any dividend or made any other
distribution on or in respect to its capital stock.
2.6
Disclosures in Commission
Filings. Since November 30, 2015, (i) none of the
Company’s filings with the Commission contained any untrue
statement of a material fact or omitted to state any material fact
necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading; and
(ii) the Company has made all filings with the Commission required
under the Exchange Act and the rules and regulations of the
Commission promulgated thereunder (the “Exchange Act
Regulations”).
6
2.7
Independent
Accountants. To the knowledge of the Company, each of MNP
LLP and Deloitte LLP (collectively, the “Auditor”), whose report is filed
with the Commission and included or incorporated by reference in
the Registration Statement, the Pricing Disclosure Package and the
Prospectus, is an independent registered public accounting firm as
required by the Securities Act and the Securities Act Regulations
and the Public Company Accounting Oversight Board. The
Auditor has not, during
the periods covered by the financial statements included or
incorporated by reference in the Registration Statement, the
Pricing Disclosure Package and the Prospectus, provided to the
Company any non-audit services, as such term is used in Section
10A(g) of the Exchange Act.
2.8
Financial Statements,
etc. The financial statements, including the notes thereto
and supporting schedules included or incorporated by reference in
the Registration Statement, the Pricing Disclosure Package and the
Prospectus, fairly present in all material respects the
financial position and the results of operations of the Company at
the dates and for the periods to which they apply; and such
financial statements have been prepared in conformity with U.S.
generally accepted accounting principles (“GAAP”), consistently applied
throughout the periods involved (provided that unaudited interim
financial statements are subject to year-end audit adjustments that
are not expected to be material in the aggregate and do not contain
all footnotes required by GAAP); and the supporting schedules
included or incorporated by reference in the Registration Statement
present fairly in all
material respects the information required to be stated therein.
The pro forma financial statements and the related notes, if any,
included or incorporated by reference in the Registration
Statement, the Pricing Disclosure Package and the Prospectus have
been properly compiled and prepared in accordance with the
applicable requirements of the Securities Act, the Securities Act
Regulations, the Exchange Act and/or the Exchange Act Regulations
and present fairly the information shown therein, and the
assumptions used in the preparation thereof are reasonable and the
adjustments used therein are appropriate to give effect to the
transactions and circumstances referred to therein. Except as
included or incorporated by reference therein, no historical or pro
forma financial statements are required to be included or
incorporated by reference in the Registration Statement, the
Pricing Disclosure Package or the Prospectus under the Securities
Act, the Securities Act Regulations, the Exchange Act or the
Exchange Act Regulations. The pro forma and pro forma as adjusted
financial information and the related notes, if any, included or
incorporated by reference in the Registration Statement, the
Pricing Disclosure Package and the Prospectus have been properly
compiled and prepared in accordance with the applicable
requirements of the Securities Act, the Securities Act Regulations,
the Exchange Act or the Exchange Act Regulations and present fairly
in all material respects the information shown therein, and the
assumptions used in the preparation thereof are reasonable and the
adjustments used therein are appropriate to give effect to the
transactions and circumstances referred to therein. All disclosures
contained in the Registration Statement, the Pricing Disclosure
Package or the Prospectus, or incorporated or deemed incorporated
by reference therein, regarding “non-GAAP financial
measures” (as such term is defined by the rules and
regulations of the Commission), if any, comply in all material
respects with Regulation G of the Exchange Act and Item 10 of
Regulation S-K of the Securities Act, to the extent applicable.
Each of the Registration Statement, the Pricing Disclosure Package
and the Prospectus discloses all material off-balance sheet
transactions, arrangements, obligations (including contingent
obligations), and other relationships of the Company with
unconsolidated entities or other persons that may have a material
current or future effect on the Company’s financial
condition, changes in financial condition, results of operations,
liquidity, capital expenditures, capital resources, or significant
components of revenues or expenses. Except as disclosed in the
Registration Statement, the Pricing Disclosure Package and the
Prospectus, since the
date of the latest financial statements of the Company included or
incorporated by reference in the Registration Statement, the
Pricing Disclosure Package or the Prospectus, (a) neither the
Company nor any of its direct and indirect subsidiaries, including
each entity disclosed or described in the Registration Statement,
the Pricing Disclosure Package and the Prospectus as being a
subsidiary of the Company (each, a “Subsidiary” and, collectively, the
“Subsidiaries”),
has incurred any material liabilities or obligations, direct or
contingent, or entered into any material transactions other than in
the ordinary course of business, (b) the Company has not declared
or paid any dividends or made any distribution of any kind with
respect to its capital stock, (c) there has not been any change in
the capital stock of the Company or any of its Subsidiaries, or,
other than in the ordinary course of business or any grants under
any stock compensation plan and Common Shares issued upon exercise
or conversion of options, warrants or convertible securities
described in the Registration Statement, the Pricing Disclosure
Package and the Prospectus, and (d) there has not been any Material
Adverse Change in the Company’s long-term or short-term
debt.
7
2.9
Authorized Capital;
Options, etc. The Company had, at the date or dates
indicated in the Registration Statement, the Pricing Disclosure
Package and the Prospectus, the duly authorized, issued and
outstanding capitalization as set forth therein. Based on the
assumptions stated in the Registration Statement, the Pricing
Disclosure Package and the Prospectus, the Company will have on the
Closing Date the adjusted stock capitalization set forth therein.
Except as set forth in, or contemplated by, the Registration
Statement, the Pricing Disclosure Package and the Prospectus, on
the Effective Date, as of the Applicable Time and on the Closing
Date and any Option Closing Date, there will be no stock options,
warrants, or other rights to purchase or otherwise acquire any
authorized, but unissued Common Shares of the Company or any
security convertible or exercisable into Common Shares of the
Company, or any contracts or commitments to issue or sell Common
Shares or any such options, warrants, rights or convertible
securities.
2.10
Valid Issuance of
Securities, etc.
2.10.1
Outstanding
Securities. Since November 30, 2015, all issued and
outstanding securities of the Company issued prior to the
transactions contemplated by this Agreement have been duly
authorized and validly issued and are fully paid and
non-assessable; the holders thereof have no rights of rescission
with respect thereto, and are not subject to personal liability by
reason of being such holders; and none of such securities were
issued in violation of the preemptive rights of any holders of any
security of the Company or similar contractual rights granted by
the Company. The authorized Common Shares conform in all material
respects to all statements relating thereto contained in the
Registration Statement, the Pricing Disclosure Package and the
Prospectus. The offers and sales of the outstanding Common Shares
were at all relevant times either registered under the Securities
Act and the applicable state securities or “blue sky”
laws or, based in part on the representations and warranties of the
purchasers of such Common Shares, exempt from such registration
requirements.
2.10.2
Securities Sold Pursuant
to this Agreement. The Public Securities and
Underwriter’s Securities have been duly authorized for
issuance and sale and, when issued and paid for in accordance with their respective
terms, will be validly issued, fully paid and non-assessable; the
holders thereof are not and will not be subject to personal
liability by reason of being such holders; the Public Securities
and Underwriter’s Securities are not and will not be subject
to the preemptive rights of any holders of any security of the
Company or similar contractual rights granted by the Company; and
all corporate action required to be taken for the authorization,
issuance and sale of the Public Securities and Underwriter’s
Securities has been duly and validly taken. The Public Securities
and Underwriter’s Securities conform in all material respects
to all statements with respect thereto contained in the
Registration Statement, the Pricing Disclosure Package and the
Prospectus. All corporate action required to be taken for the
authorization, issuance and sale of the Pre-Funded Warrants, the
Firm Warrants, the Option Warrants and Underwriter’s Warrant
have been duly and validly taken; the Warrant Shares, the
Registered Warrant Shares and the Common Shares issuable upon
exercise of the Underwriter’s Warrant have been duly
authorized and reserved for issuance by all necessary corporate
action on the part of the Company and when paid for and issued in
accordance with the Pre-Funded Warrant Agreement, the Warrant
Agreement and the Underwriter’s Warrant Agreement,
respectively, such Common Shares will be validly issued, fully paid
and non-assessable; the holders thereof are not and will not be
subject to personal liability by reason of being such holders; and
such Common Shares are not and will not be subject to the
preemptive rights of any holders of any security of the Company or
similar contractual rights granted by the Company.
2.11
Registration Rights of
Third Parties. Except as set forth in the Registration
Statement, the Pricing Disclosure Package and the Prospectus, no
holders of any securities of the Company or any rights exercisable
for or convertible or exchangeable into securities of the Company
have the right to require the Company to register any such
securities of the Company under the Securities Act or to include
any such securities in a registration statement to be filed by the
Company (except with respect to securities covered by an effective
registration statement).
2.12
Validity and Binding
Effect of Agreements. This Agreement, the Warrant Agreement,
the Pre-Funded Warrant Agreement and the Underwriter’s
Warrant Agreement have been duly and validly authorized by the
Company, and, when executed and delivered, will constitute, the
valid and binding agreements of the Company, enforceable against
the Company in accordance with their respective terms, except: (i)
as such enforceability may be limited by bankruptcy, insolvency,
reorganization, fraudulent conveyance, fraudulent transfer,
moratorium or similar laws affecting creditors’ rights
generally; (ii) as enforceability of any indemnification or
contribution provision may be limited under the federal and state
securities laws; and (iii) that the remedy of specific performance
and injunctive and other forms of equitable relief may be subject
to the equitable defenses and to the discretion of the court before
which any proceeding therefor may be brought.
8
2.13
No Conflicts, etc.
The execution, delivery and performance by the Company of this
Agreement, the Warrant Agreement, the Pre-Funded Warrant Agreement,
the Underwriter’s Warrant Agreement and all ancillary
documents, the consummation by the Company of the transactions
herein and therein contemplated and the compliance by the Company
with the terms hereof and thereof do not and will not, with or
without the giving of notice or the lapse of time or both: (i)
result in a material breach of, or conflict with any of the terms
and provisions of, or constitute a material default under, or
result in the creation, modification, termination or imposition of
any lien, charge or encumbrance upon any property or assets of the
Company pursuant to the terms of any agreement or instrument to
which the Company is a party; (ii) result in any violation of the
provisions of the Company’s articles of arrangement of the
Company dated October 22, 2009 (as amended by articles of amendment
dated September 12, 2018, and as the same may be further amended or
restated from time to time, the “Charter”) or the by-laws of the
Company; or (iii) violate any existing applicable law, rule,
regulation, judgment, order or decree of any Governmental Entity as
of the date hereof including, without limitation, those promulgated
by the Food and Drug Administration of the U.S. Department of
Health and Human Services (the “FDA”) or by any foreign, federal,
state or local regulatory authority performing functions similar to
those performed by the FDA, except in the case of clauses (i) and
(iii) above for any such breaches, conflicts, defaults or
violations which would not reasonably be expected to result in a
Material Adverse Change.
2.14
No Defaults;
Violations. Except as described in the Registration
Statement, the Pricing Disclosure Package and the Prospectus, no
default exists in the due performance and observance of any term,
covenant or condition of any material license, contract, indenture,
mortgage, deed of trust, note, loan or credit agreement, or any
other agreement or instrument evidencing an obligation for borrowed
money, or any other material agreement or instrument to which the
Company is a party or by which the Company may be bound or to which
any of the properties or assets of the Company is subject. The
Company is not in violation of (i) any term or provision of its
Charter or by-laws, or (ii) any franchise, license, permit,
applicable law, rule, regulation, judgment or decree of any
Governmental Entity applicable to the Company, except as would not
reasonably be expected to result, individually or in the aggregate,
in a Material Adverse Change.
2.15
Corporate Power; Licenses;
Consents.
2.15.1
Conduct of
Business. Except as described in the Registration Statement,
the Pricing Disclosure Package and the Prospectus, the Company has
all requisite corporate power and authority, and has all necessary
authorizations, approvals, orders, licenses, certificates and
permits of and from all governmental regulatory officials and
bodies that it needs as of the date hereof to conduct its business
purpose as described in the Registration Statement, the Pricing
Disclosure Package and the Prospectus, except where the failure to
have any such authorization, approval, order, license, certificate
or permit would not have or reasonably be expected to result in a
Material Adverse Change.
2.15.2
Transactions Contemplated
Herein. The Company has all corporate power and authority to
enter into this Agreement and to carry out the provisions and
conditions hereof, and all consents, authorizations, approvals and
orders required in connection therewith have been obtained. No
consent, authorization or order of, and no filing with, any court,
government agency or other body is required for the valid issuance,
sale and delivery of the Public Securities and the consummation of
the transactions and agreements contemplated by this Agreement, the
Warrant Agent Agreement, the Pre-Funded Warrant Agreement, the
Underwriter’s Warrant Agreement and as contemplated by the
Registration Statement, the Pricing Disclosure Package and the
Prospectus, except with respect to applicable federal and state
securities laws and the rules and regulations of the Exchange and
the Financial Industry Regulatory Authority, Inc.
(“FINRA”) and except with respect to such
consent, authorization, order or filing that would not reasonably
be expected to have a Material Adverse Change.
2.16
D&O
Questionnaires. To the Company’s knowledge, all
information contained in the questionnaires (the
“Questionnaires”)
completed by each of the Company’s directors and officers
immediately prior to the Offering (the “Insiders”) as supplemented by all
information concerning the Company’s directors, officers and
principal shareholders as described in or incorporated by reference
in the Registration Statement, the Pricing Disclosure Package and
the Prospectus, as well as in the Lock-Up Agreement (as defined
herein), provided to the Underwriter, is true and correct in all
material respects and the Company has not become aware of any
information which would cause the information disclosed in the
Questionnaires to become materially inaccurate and
incorrect.
9
2.17
Litigation; Governmental
Proceedings. There is no action, suit, proceeding, inquiry,
arbitration, investigation, litigation or governmental proceeding
pending or, to the Company’s knowledge, threatened against,
or involving the Company or, to the Company’s knowledge, any
executive officer or director which has not been disclosed in the
Registration Statement, the Pricing Disclosure Package and the
Prospectus which is required to be disclosed (it being understood
that the interaction between the Company and the FDA and such
comparable governmental bodies relating to the clinical development
and product approval process shall not be deemed proceedings for
purposes of this representation), except for any such action, suit,
proceeding, inquiry, arbitration, investigation, litigation or
governmental proceeding that would not have or reasonably be
expected to result in a Material Adverse Change.
2.18
Good Standing. The
Company has been duly organized and is validly existing as a
corporation and is in good standing under the laws of Canada as of
the date hereof, and is duly qualified to do business and is in
good standing in each other jurisdiction in which its ownership or
lease of property or the conduct of business requires such
qualification, except where the failure to qualify, singularly or
in the aggregate, would not have or reasonably be expected to
result in a Material Adverse Change.
2.19
Insurance. The
Company carries or is entitled to the benefits of insurance, with,
to the Company’s knowledge, reputable insurers, and in such
amounts and covering such risks which the Company believes are
reasonably adequate, and all such insurance is in full force and
effect. The Company has no reason to believe that it will not be
able (i) to renew its existing insurance coverage as and when such
policies expire or (ii) to obtain comparable coverage from similar
institutions as may be necessary or appropriate to conduct its
business as now conducted and at a cost that would not reasonably
be expected to result in a Material Adverse Change.
2.20
Transactions Affecting
Disclosure to FINRA.
2.20.1
Finder’s
Fees. Except as described in the Registration Statement, the
Pricing Disclosure Package and the Prospectus, there are no claims,
payments, arrangements, agreements or understandings relating to
the payment of a finder’s, consulting or origination fee by
the Company or any Insider with respect to the sale of the Public
Securities hereunder or any other arrangements, agreements or
understandings of the Company or, to the Company’s knowledge,
any of its shareholders that may affect the Underwriter’s
compensation, as determined by FINRA.
2.20.2
Payments Within Twelve
(12) Months. Except as described in the Registration
Statement, the Pricing Disclosure Package or the Prospectus, the
Company has not made any direct or indirect payments (in cash,
securities or otherwise) to: (i) any person, as a finder’s
fee, consulting fee or otherwise, in consideration of such person
raising capital for the Company or introducing to the Company
persons who raised or provided capital to the Company; (ii) any
FINRA member; or (iii) any person or entity that has any direct or
indirect affiliation or association with any FINRA member, within
the twelve (12) months prior to the Effective Date, other than the
payment to the Underwriter as provided hereunder in connection with
the Offering.
2.20.3
Use of Proceeds.
None of the net proceeds of the Offering will be paid by the
Company to any participating FINRA member or its affiliates, except
as specifically authorized herein.
2.20.4
FINRA Affiliation.
Except as disclosed in their FINRA confirmations, to the
Company’s knowledge, there is no (i) officer or director of
the Company, (ii) beneficial owner of 5% or more of any class of
the Company's securities or (iii) beneficial owner of the Company's
unregistered equity securities which were acquired during the
180-day period immediately preceding the filing of the Registration
Statement that is an affiliate or associated person of a FINRA
member participating in the Offering (as determined in accordance
with the rules and regulations of FINRA).
2.20.5
Information. To the
Company’s knowledge, all information provided by the Company
in its FINRA questionnaire to Underwriter Counsel specifically for
use by Underwriter Counsel in connection with its Public Offering
System filings (and related disclosure) with FINRA is true, correct
and complete in all material respects.
10
2.21
Foreign Corrupt Practices
Act. None of the Company and its Subsidiaries or, to the
Company’s knowledge, any director, officer, agent, employee
or affiliate of the Company and its Subsidiaries or any other
person acting on behalf of the Company and its Subsidiaries, has,
directly or indirectly, given or agreed to give any money, gift or
similar benefit (other than legal price concessions to customers in
the ordinary course of business) to any customer, supplier,
employee or agent of a customer or supplier, or official or
employee of any governmental agency or instrumentality of any
government (domestic or foreign) or any political party or
candidate for office (domestic or foreign) or other person who was,
is, or may be in a position to help or hinder the business of the
Company (or assist it in connection with any actual or proposed
transaction) that (i) might subject the Company to any damage or
penalty in any civil, criminal or governmental litigation or
proceeding, (ii) if not given in the past, might reasonably been
expected to have had a Material Adverse Change or (iii) if not
continued in the future, might adversely affect the assets,
business, operations or prospects of the Company. The Company has
taken reasonable steps to ensure that its accounting controls and
procedures are sufficient to cause the Company to comply in all
material respects with the Foreign Corrupt Practices Act of 1977,
as amended.
2.22
Compliance with
OFAC. None of the Company and its Subsidiaries or, to the
Company’s knowledge, any director, officer, agent, employee
or affiliate of the Company and its Subsidiaries or any other
person acting on behalf of the Company and its Subsidiaries, is
currently subject to any U.S. sanctions administered by the Office
of Foreign Assets Control of the U.S. Department of the Treasury
(“OFAC”), and
the Company will not, directly or indirectly, use the proceeds of
the Offering hereunder, or lend, contribute or otherwise make
available such proceeds to any subsidiary, joint venture partner or
other person or entity, for the purpose of financing the activities
of any person currently subject to any U.S. sanctions administered
by OFAC.
2.23
Forward-Looking
Statements. No forward-looking statement (within the meaning
of Section 27A of the Securities Act and Section 21E of the
Exchange Act) contained in either the Registration Statement,
Pricing Disclosure Package or Prospectus has been made or
reaffirmed without a reasonable basis or has been disclosed by the
Company other than in good faith.
2.24
Money Laundering
Laws. The operations of the Company and its Subsidiaries are
and have been conducted at all times in compliance in all material
respects with applicable financial recordkeeping and reporting
requirements of the Currency and Foreign Transactions Reporting Act
of 1970, as amended, the money laundering statutes of all
applicable jurisdictions, the rules and regulations thereunder and
any related or similar rules, regulations or guidelines, issued,
administered or enforced by any Governmental Entity (collectively,
the “Money Laundering
Laws”); and no action, suit or proceeding by or before
any Governmental Entity involving the Company with respect to the
Money Laundering Laws is pending or, to the knowledge of the
Company, threatened.
2.25
Officers’
Certificate. Any certificate signed by any duly authorized
officer of the Company and delivered to the Underwriter or to
Underwriter Counsel shall be deemed a representation and warranty
by the Company to the Underwriter as to the matters covered
thereby.
2.26
Lock-Up
Agreements. Schedule 2 hereto contains a
complete and accurate list of the Company’s officers and
directors (collectively, the “Lock-Up Parties”). The Company has
caused each of the Lock-Up Parties to deliver to the Underwriter an
executed Lock-Up Agreement, in the form attached hereto as
Exhibit A
(the “Lock-Up Agreement”), prior to the
execution of this Agreement. If the Underwriter, in
its sole discretion, agrees to release or waive the restrictions
set forth in a Lock-Up Agreement for an officer or director of the
Company and provides the Company with notice of the impending
release or waiver at least three (3) Business Days before the
effective date of the release or waiver, the Company agrees to
announce the impending release or waiver at least two (2) business
days before the effective date of the release or waiver by either
(i) a press release through a major news service at least two
(2) Business Days before the effective date of the release or
waiver, or (ii) any other method that satisfies the
obligations described in FINRA
Rule 5131(d)(2).
2.27
Subsidiaries. All
direct and indirect Subsidiaries of the Company are duly organized
and in good standing under the laws of the place of organization or
incorporation, and each Subsidiary is in good standing in each
jurisdiction in which its ownership or lease of property or the
conduct of business requires such qualification, except where the
failure to qualify would not result in a Material Adverse Change.
The Company’s ownership and control of each Subsidiary is as
described in the Registration Statement, the Pricing Disclosure
Package and the Prospectus and the securities of the Subsidiaries
that it owns are free and clear of any claims, liens, encumbrances
or security interests except as set forth in the Registration
Statement, the Pricing Disclosure Package and the Prospectus, and
all of the securities have been duly authorized and validly issued
by the applicable Subsidiary and are fully paid and
non-assessable.
11
2.28
Related Party
Transactions. There are no business relationships or related
party transactions involving the Company or any other person
required to be described in the Registration Statement, the Pricing
Disclosure Package and the Prospectus that have not been described
as required.
2.29
Board of Directors.
The board of directors of the Company (the “Board of
Directors” or “Board”) is comprised of the
persons set forth under the heading incorporated by reference into
the Pricing Prospectus and the Prospectus captioned
“Management.” The qualifications of the persons serving
as board members and the overall composition of the Board comply
with the Exchange Act, the Exchange Act Regulations, the
▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002 and the rules promulgated thereunder
(the “▇▇▇▇▇▇▇▇-▇▇▇▇▇
Act”) applicable to the Company and the listing rules
of the Exchange. At least one member of the Audit Committee of the
Board of Directors of the Company qualifies as an “audit
committee financial expert,” as such term is defined under
Regulation S-K and the listing rules of the Exchange. In addition,
at least a majority of the persons serving on the Board of
Directors qualify as “independent,” as defined under
the listing rules of the Exchange.
2.30
▇▇▇▇▇▇▇▇-▇▇▇▇▇
Compliance.
2.30.1
Disclosure
Controls. Except as described in the Registration Statement,
the Pricing Disclosure Package and the Prospectus, the Company has
developed and currently maintains disclosure controls and
procedures that comply with Rule 13a-15 or 15d-15 under the
Exchange Act Regulations applicable to it, and such controls
and procedures are effective to ensure that all material
information concerning the Company will be made known on a timely
basis to the individuals responsible for the preparation of the
Company’s Exchange Act filings and other public disclosure
documents.
2.30.2
Compliance. The
Company is, or at the Applicable Time and on the Closing Date will
be, in material compliance with the provisions of the
▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act applicable to it, and has implemented or will
implement such programs and taken reasonable steps to ensure the
Company’s future compliance (not later than the relevant
statutory and regulatory deadlines therefor) with all of the
material provisions of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act.
2.31
Accounting
Controls. The Company and its Subsidiaries maintain systems
of “internal control over financial reporting” (as
defined under Rules 13a-15 and 15d-15 under the Exchange Act
Regulations) that comply in all material respects with the
requirements of the Exchange Act and have been designed by, or
under the supervision of, their respective principal executive and
principal financial officers, or persons performing similar
functions, to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with GAAP,
including, but not limited to, internal accounting controls
sufficient to provide reasonable assurance that (i) transactions
are executed in accordance with management’s general or
specific authorizations; (ii) transactions are recorded as
necessary to permit preparation of financial statements in
conformity with GAAP and to maintain asset accountability; (iii)
access to assets is permitted only in accordance with
management’s general or specific authorization; and (iv) the
recorded accountability for assets is compared with the existing
assets at reasonable intervals and appropriate action is taken with
respect to any differences. Except as disclosed in the Registration
Statement, the Pricing Disclosure Package and the Prospectus, the
Company is not aware of any material weaknesses in its internal
controls. The Company’s auditors and the Audit Committee of
the Board of Directors of the Company have been advised of: (i) all
significant deficiencies and material weaknesses, if any, in the
design or operation of internal controls over financial reporting
which are known to the Company’s management and that have
adversely affected or are reasonably likely to adversely affect the
Company’ ability to record, process, summarize and report
financial information; and (ii) any fraud known to the
Company’s management, whether or not material, that involves
management or other employees who have a significant role in the
Company’s internal controls over financial
reporting.
12
2.32
No Investment Company
Status. The Company is not and, after giving effect to the
Offering and the application of the proceeds thereof as described
in the Registration Statement, the Pricing Disclosure Package and
the Prospectus, will not be, required to register as an
“investment company,” as defined in the Investment
Company Act of 1940, as amended.
2.33
No Labor Disputes.
No labor dispute with the employees of the Company or any of its
Subsidiaries exists or, to the knowledge of the Company, is
threatened.
2.34
Intellectual Property
Rights. The Company and each of its Subsidiaries owns or
possesses or has valid rights to use all patents, patent
applications, trademarks, service marks, trade names, trademark
registrations, service ▇▇▇▇ registrations, copyrights, licenses,
inventions, trade secrets and similar rights (“Intellectual Property Rights”)
necessary for the conduct of the business of the Company and its
Subsidiaries as currently carried on and as described in or
incorporated by reference in the Registration Statement, the
Pricing Disclosure Package and the Prospectus. Except as set forth
in the Registration Statement, the Pricing Disclosure Package and
the Prospectus, to the knowledge of the Company, no action or use
by the Company or any of its Subsidiaries necessary for the conduct
of its business as currently carried on and as described in the
Registration Statement and the Prospectus will involve or give rise
to any infringement of, or license or similar fees for, any
Intellectual Property Rights of others. Except as set forth in the
Registration Statement, the Pricing Disclosure Package and the
Prospectus, to the knowledge of the Company, neither the Company
nor any of its Subsidiaries has received any written notice
alleging any such infringement, fee or conflict with asserted
Intellectual Property Rights of others. Except as would not
reasonably be expected to result, individually or in the aggregate,
in a Material Adverse Change (A) to the knowledge of the Company,
there is no infringement, misappropriation or violation by third
parties of any of the Intellectual Property Rights owned by the
Company; (B) there is no pending or, to the knowledge of the
Company, threatened action, suit, proceeding or claim by others
challenging the rights of the Company in or to any such
Intellectual Property Rights, and the Company is unaware of any
facts which would form a reasonable basis for any such claim, that
would, individually or in the aggregate, together with any other
claims in this Section 2.34, reasonably be expected to result in a
Material Adverse Change; (C) the Intellectual Property Rights owned
by the Company and, to the knowledge of the Company, the
Intellectual Property Rights licensed to the Company have not been
adjudged by a court of competent jurisdiction invalid or
unenforceable, in whole or in part, and there is no pending or, to
the Company’s knowledge, threatened action, suit, proceeding
or claim by others challenging the validity or scope of any such
Intellectual Property Rights, and the Company is unaware of any
facts which would form a reasonable basis for any such claim that
would, individually or in the aggregate, together with any other
claims in this Section 2.34, reasonably be expected to result in a
Material Adverse Change; and (D) there is no pending or, to the
Company’s knowledge, threatened action, suit, proceeding or
claim by others that the Company infringes, misappropriates or
otherwise violates any Intellectual Property Rights or other
proprietary rights of others, the Company has not received any
written notice of such claim and the Company is unaware of any
other facts which would form a reasonable basis for any such claim
that would, individually or in the aggregate, together with any
other claims in this Section 2.34, reasonably be expected to result
in a Material Adverse Change. In addition, to the Company’s
knowledge, no employee of the Company is in or has ever been in
violation of any term of
any employment contract, patent disclosure agreement, invention
assignment agreement, non-competition agreement, non-solicitation
agreement, nondisclosure agreement or any restrictive covenant to
or with a former employer where the basis of such violation relates
to such employee’s employment with the Company, or actions
undertaken by the employee while employed with the Company and
could reasonably be expected to result, individually or in the
aggregate, in a Material Adverse Change. To the Company’s
knowledge, all material trade secrets developed by and belonging to
the Company which have not been patented have been kept
confidential. The Company is not a party to or bound by any
options, licenses or agreements with respect to the Intellectual
Property Rights of any other person or entity that are required to
be set forth in the Registration Statement, the Pricing Disclosure
Package and the Prospectus and are not described therein. The
Registration Statement, the Pricing Disclosure Package and the
Prospectus contain in all material respects the same description of
the matters set forth in the preceding sentence. None of the
technology employed by the Company has been obtained or is being
used by the Company in violation of any contractual obligation
binding on the Company or, to the Company’s knowledge, any of
its officers, directors or employees, or otherwise in violation of
the rights of any persons, where such violation could reasonably be
expected to be a Material Adverse Change.
2.35
Taxes. Each of the
Company and its Subsidiaries has filed all returns (as hereinafter
defined) required to be filed with taxing authorities prior to the
date hereof or has duly obtained extensions of time for the filing
thereof. Each of the Company and its Subsidiaries has paid all
taxes (as hereinafter defined) shown as due on such returns that
were filed and has paid all taxes imposed on or assessed against
the Company or such respective Subsidiary, except (i) such taxes
the Company or a Subsidiary is challenging in good faith and (ii)
could not reasonably be expected to have a Material Adverse Change.
The provisions for taxes payable, if any, shown on the financial
statements filed with or as part of the Registration Statement are
sufficient for all accrued and unpaid taxes, whether or not
disputed, and for all periods to and including the dates of such
consolidated financial statements. Except as disclosed in writing
to the Underwriter or as
could not reasonably be expected to result in a Material Adverse
Change, (i) no issues have been raised (and are
13
currently pending)
by any taxing authority in connection with any of the returns or
taxes asserted as due from the Company or its Subsidiaries, and
(ii) no waivers of statutes of limitation with respect to the
returns or collection of taxes have been given by or requested from
the Company or its Subsidiaries. The term “taxes” means all federal, state,
local, foreign and other net income, gross income, gross receipts,
sales, use, ad valorem, transfer, franchise, profits, license,
lease, service, service use, withholding, payroll, employment,
excise, severance, stamp, occupation, premium, property, windfall
profits, customs, duties or other taxes, fees, assessments or
charges of any kind whatever, together with any interest and any
penalties, additions to tax or additional amounts with respect
thereto. The term “returns” means all returns,
declarations, reports, statements and other documents required to
be filed in respect to taxes.
2.36
ERISA Compliance.
The Company and any “employee benefit plan” (as defined
under the Employee Retirement Income Security Act of 1974, as
amended, and the regulations and published interpretations
thereunder (collectively, “ERISA”)) established or maintained
by the Company or its “ERISA Affiliates” (as defined
below) are in compliance in all material respects with ERISA.
“ERISA
Affiliate” means, with respect to the Company, any
member of any group of organizations described in Sections
414(b),(c),(m) or (o) of the Internal Revenue Code of 1986, as
amended, and the regulations and published interpretations
thereunder (the “Code”) of which the Company is a
member. No “reportable event” (as defined under ERISA)
has occurred or is reasonably expected to occur with respect to any
“employee benefit plan” established or maintained by
the Company or any of its ERISA Affiliates. No “employee
benefit plan” established or maintained by the Company or any
of its ERISA Affiliates, if such “employee benefit
plan” were terminated, would have any “amount of
unfunded benefit liabilities” (as defined under ERISA).
Neither the Company nor any of its ERISA Affiliates has incurred or
reasonably expects to incur any material liability under (i) Title
IV of ERISA with respect to termination of, or withdrawal from, any
“employee benefit plan” or (ii) Sections 412, 4971,
4975 or 4980B of the Code. Each “employee benefit plan”
established or maintained by the Company or any of its ERISA
Affiliates that is intended to be qualified under Section 401(a) of
the Code is so qualified and, to the knowledge of the Company,
nothing has occurred, whether by action or failure to act, which
would cause the loss of such qualification.
2.37
Compliance with
Laws. Except as described in the Registration Statement, the
Pricing Disclosure Package and the Prospectus, or as would not
reasonably be expected to result, individually or in the aggregate,
in a Material Adverse Change, the Company: (A) is and at all times
has been in compliance with all statutes, rules, or regulations
applicable to the ownership, testing, development, manufacture,
packaging, processing, use, distribution, marketing, labeling,
promotion, sale, offer for sale, storage, import, export or
disposal of any product manufactured or distributed by the Company
(“Applicable
Laws”); (B) has not received any FDA Form 483, notice
of adverse finding, warning letter, untitled letter or other
correspondence or written notice from the U.S. Food and Drug
Administration or any other Governmental Entity alleging or
asserting noncompliance with any Applicable Laws or any licenses,
certificates, approvals, clearances, authorizations, permits and
supplements or amendments thereto required by any such Applicable
Laws (“Authorizations”); (C) possesses
all Authorizations and such material Authorizations are valid and
in full force and effect and are not in material violation of any
term of any such Authorizations; (D) has not received written
notice of any claim, action, suit, proceeding, hearing,
enforcement, investigation, arbitration or other action from any
Governmental Entity or third party alleging that any is in
violation of any Applicable Laws or Authorizations and has no
knowledge that any such Governmental Entity or third party is
considering any such claim, litigation, arbitration, action, suit,
investigation or proceeding; (E) has not received notice that any
Governmental Entity has taken, is taking or intends to take action
to limit, suspend, modify or revoke any Authorizations and has no
knowledge that any such Governmental Entity is considering such
action; (F) has filed, obtained, maintained or submitted all
material reports, documents, forms, notices, applications, 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
in all material respects on the date filed (or were corrected or
supplemented by a subsequent submission); and (G) has not, either
voluntarily or involuntarily, initiated, conducted, or issued or
caused to be initiated, conducted or issued, any recall, market
withdrawal or replacement, safety alert, post-sale warning,
“dear doctor” 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.
14
2.38
Ineligible Issuer.
At the time of filing the Registration Statement and any
post-effective amendment thereto, at the time of effectiveness of
the Registration Statement and any amendment thereto, at the
earliest time thereafter that the Company or another offering
participant made a bona fide offer (within the meaning of Rule
164(h)(2) of the Securities Act Regulations) of the Public
Securities and at the date hereof, the Company was not and is not
an “ineligible issuer,” as defined in Rule 405, without
taking account of any determination by the Commission pursuant to
Rule 405 that it is not necessary that the Company be considered an
ineligible issuer.
2.39
[Reserved]
2.40
Industry Data. The
statistical and market-related data included in or incorporated by
reference in each of the Registration Statement, the Pricing
Disclosure Package and the Prospectus are based on or derived from
sources that the Company reasonably and in good faith believes are
reliable and accurate or represent the Company’s good faith
estimates that are made on the basis of data derived from such
sources.
2.41
Margin Securities.
The Company owns no “margin securities” as that term is
defined in Regulation U of the Board of Governors of the Federal
Reserve System (the “Federal
Reserve Board”), and none of the proceeds of Offering
will be used, directly or indirectly, for the purpose of purchasing
or carrying any margin security, for the purpose of reducing or
retiring any indebtedness which was originally incurred to purchase
or carry any margin security or for any other purpose which might
cause any of the Common Shares to be considered a “purpose
credit” within the meanings of Regulation T, U or X of the
Federal Reserve Board.
2.42
Exchange Act
Reports. The Company has filed in a timely manner all
reports required to be filed pursuant to Sections 13(a), 13(e), 14
and 15(d) of the Exchange Act during the preceding twelve (12)
months (except to the extent that Section 15(d) requires reports to
be filed pursuant to Sections 13(d) and 13(g) of the Exchange Act,
which shall be governed by the next clause of this sentence); and
the Company has filed in a timely manner all reports required to be
filed pursuant to Sections 13(d) and 13(g) of the Exchange Act
since November 30, 2015, except where the failure to timely file
could not reasonably be expected, individually or in the aggregate,
to result in a Material Adverse Change.
2.43
Electronic Road
Show. The Company has made available a Bona Fide Electronic
Road Show in compliance with Rule 433(d)(8)(ii) of the Securities
Act Regulations such that no filing of any “road show”
(as defined in Rule 433(h) of the Securities Act Regulations) is
required in connection with the Offering.
2.44
Integration.
Neither the Company, nor any of its affiliates, nor any person
acting on its or their behalf has, directly or indirectly, made any
offers or sales of any security or solicited any offers to buy any
security, under circumstances that would cause the Offering to be
integrated with prior offerings by the Company for purposes of the
Securities Act that would require the registration of any such
securities under the Securities Act.
2.45
Title to Real and Personal
Property. The Company owns or leases all such properties as
are necessary to the conduct of its business as presently operated
and as proposed to be operated as described in the Registration
Statement, the Pricing Disclosure Package and the Prospectus. The
Company has good and marketable title in fee simple to all real
property and good and marketable title to all personal property
owned by it, in each case free and clear of any and all Liens
except such as are described in the Registration Statement, the
Pricing Disclosure Package and the Prospectus or such as do not
(individually or in the aggregate) materially affect the value of
such property or materially interfere with the use made or proposed
to be made of such property by the Company; and any real property
and buildings held under lease or sublease by the Company are held
by them under valid, subsisting and enforceable leases with such
exceptions as are not material to, and do not materially interfere
with, the use made and proposed to be made of such property and
buildings by the Company. The Company has not received any notice
of any claim adverse to its ownership of any real or personal
property or of any claim against the continued possession of any
real property, whether owned or held under lease or sublease by the
Company.
15
2.46
Confidentiality and
Non-Competitions. To the Company’s knowledge, no
director, officer, key employee or consultant of the Company is
subject to any confidentiality, non-disclosure, non-competition
agreement or non-solicitation agreement with any employer or prior
employer that could affect his ability to be and act in his
respective capacity of the Company or be expected to result in a
Material Adverse Change.
2.47
Corporate Records.
The minute books of the Company have been made available to the
Underwriter and Underwriter’s Counsel, and such books (i)
contain minutes of all material meetings and actions of the Board
(including each Board committee) and stockholders of the Company,
and (ii) reflect all material transactions referred to in such
minutes.
2.48
No Stabilization.
Neither the Company nor any of its affiliates (within the meaning
of Rule 144 under the Securities Act) has taken, directly or
indirectly, any action which constitutes or is designed to cause or
result in, or which could reasonably be expected to constitute,
cause or result in, the stabilization or manipulation of the price
of any security to facilitate the sale or resale of the Public
Securities or to result in a violation of Regulation M under the
Exchange Act.
2.49
Environmental Laws.
The Company and its Subsidiaries are in compliance with all
foreign, federal, state and local rules, laws and regulations
relating to the use, treatment, storage and disposal of hazardous
or toxic substances or waste and protection of health and safety or
the environment which are applicable to their businesses
(“Environmental
Laws”), except where the failure to comply would not,
singularly or in the aggregate, result in a Material Adverse
Change. There has been no storage, generation, transportation,
handling, treatment, disposal, discharge, emission, or other
release of any kind of toxic or other wastes or other hazardous
substances by, due to, or caused by the Company or any of its
Subsidiaries (or, to the Company’s knowledge, any other
entity for whose acts or omissions the Company or any of its
Subsidiaries is or may otherwise be liable) upon any of the
property now or previously owned or leased by the Company or any of
its Subsidiaries, or upon any other property, in violation of any
law, statute, ordinance, rule, regulation, order, judgment, decree
or permit or which would, under any law, statute, ordinance, rule
(including rule of common law), regulation, order, judgment, decree
or permit, give rise to any liability, except for any violation or
liability which would not have, singularly or in the aggregate with
all such violations and liabilities, a Material Adverse Change; and
there has been no disposal, discharge, emission or other release of
any kind onto such property or into the environment surrounding
such property of any toxic or other wastes or other hazardous
substances with respect to which the Company has knowledge, except
for any such disposal, discharge, emission, or other release of any
kind which would not have, singularly or in the aggregate with all
such discharges and other releases, a Material Adverse
Change.
2.50
Regulatory Permits.
The Company and its Subsidiaries have such permits, licenses,
clearances, registrations, exemptions, patents, franchises,
certificates of need and other approvals, consents and other
authorizations (“Permits”) issued by the
appropriate domestic or foreign regional, federal, state, or local
regulatory agencies or bodies necessary to conduct the business of
the Company, including, without limitation, any Investigational New
Drug Application (an “IND”), Biologics License
Application (“BLA”) and/or New Drug Application
(an “NDA”), as
required by the FDA, the Drug Enforcement Administration (the
“DEA”), or any
other Permits issued by domestic or foreign regional, federal,
state, or local agencies or bodies engaged in the regulation of
pharmaceuticals such as those being developed by the Company and
its Subsidiaries (collectively, the “Regulatory Permits”), except for
any of the foregoing that would not reasonably be expected to,
individually or in the aggregate, have a Material Adverse Change;
the Company is in compliance in all material respects with the
requirements of the Regulatory Permits, and all of such Regulatory
Permits are valid and in full force and effect; the Company has not
received any notice of proceedings relating to the revocation,
termination, modification or impairment of rights of any of the
Regulatory Permits that, individually or in the aggregate, if the
subject of an unfavorable decision, ruling or finding, would
reasonably be expected to result in a Material Adverse Change; the
Company has not failed to submit to the FDA any IND, BLA or NDA
necessary to conduct the business of the Company, any such filings
that were required to be made were in material compliance with
applicable laws when filed, and no material deficiencies have been
asserted by the FDA with respect to any such filings or submissions
that were made.
2.51
Regulatory Filings.
Neither the Company nor its Subsidiaries has failed to file with
the applicable regulatory authorities (including, without
limitation, the FDA, or any foreign, federal, state, provincial or
local governmental or regulatory 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 Change; except as disclosed in the
Registration Statement, the Pricing Disclosure Package 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
Change.
16
2.52
Compliance with Health
Care Laws. Each of the Company and its Subsidiaries is, and
at all times has been, in compliance in all material respects with
all applicable Health Care Laws, and has not engaged in activities
which are, as applicable, cause for false claims liability, civil
penalties, or mandatory or permissive exclusion from Medicare,
Medicaid, or any other state or federal health care program. For
purposes of this Agreement, “Health Care Laws” means:
(i) the Federal Food, Drug, and Cosmetic Act (21 U.S.C.
§§ 301 et seq.), the Public Health Service Act (42 U.S.C.
§§ 201 et seq.), and the regulations promulgated
thereunder; (ii) all applicable federal, state, local and all
applicable foreign health care related fraud and abuse laws,
including, without limitation, the U.S. Anti-Kickback Statute (42
U.S.C. Section 1320a-7b(b)), the U.S. Physician Payment Sunshine
Act (42 U.S.C. § 1320a-7h), the U.S. Civil False Claims Act
(31 U.S.C. Section 3729 et seq.), the criminal False Claims Law (42
U.S.C. § 1320a-7b(a)), all criminal laws relating to health
care fraud and abuse, including, but not limited to, 18 U.S.C.
Sections 286 and 287, and the health care fraud criminal provisions
under the U.S. Health Insurance Portability and Accountability Act
of 1996 (“HIPAA”) (42 U.S.C. Section 1320d
et seq.), the exclusion laws (42 U.S.C. § 1320a-7), the civil
monetary penalties law (42 U.S.C. § 1320a-7a), HIPAA, as
amended by the Health Information Technology for Economic and
Clinical Health Act (42 U.S.C. Section 17921 et seq.), and the
regulations promulgated pursuant to such statutes; (iii) Medicare
(Title XVIII of the Social Security Act); (iv) Medicaid (Title XIX
of the Social Security Act); (v) the Controlled Substances Act (21
U.S.C. §§ 801 et seq.) and the regulations promulgated
thereunder; and (vi) any and all other applicable health care laws
and regulations. Neither the Company nor, to the knowledge of the
Company, any subsidiary has received notice of any claim, action,
suit, proceeding, hearing, enforcement, investigation, arbitration
or other action from any court or arbitrator or governmental or
regulatory authority or third party alleging that any it or any
Subsidiary is in material violation of any Health Care Laws, and,
to the Company’s knowledge, no such claim, action, suit,
proceeding, hearing, enforcement, investigation, arbitration or
other action is threatened. Neither the Company nor, to the
knowledge of the Company, any Subsidiary is a party to or has any
ongoing reporting obligations pursuant to any corporate integrity
agreements, deferred prosecution agreements, monitoring agreements,
consent decrees, settlement orders, plans of correction or similar
agreements with or imposed by any governmental or regulatory
authority. Additionally, neither the Company, its Subsidiaries nor
any of its respective employees, officers or directors has been
excluded, suspended or debarred from participation in any U.S.
federal health care program or human clinical research or, to the
knowledge of the Company, is subject to a governmental inquiry,
investigation, proceeding, or other similar action that could
reasonably be expected to result in debarment, suspension, or
exclusion.
2.53
Studies. The
clinical, pre-clinical and other studies and tests conducted by or
on behalf of or sponsored by the Company or its subsidiaries that
are described or referred to in the Registration Statement, the
Pricing Disclosure Package and the Prospectus were and, if still
pending, are being conducted in accordance in all material respects
with all statutes, laws, rules and regulations, as applicable
(including, without limitation, those administered by the FDA or by
any foreign, federal, state or local governmental or regulatory
authority performing functions similar to those performed by the
FDA). The descriptions of the results of such studies and tests
that are described or referred to in the Registration Statement,
the Pricing Disclosure Package and the Prospectus are accurate and
complete in all material respects and fairly present the published
data derived from such studies and tests, and each of the Company
and its subsidiaries has no knowledge of other studies or tests the
results of which are materially inconsistent with or otherwise call
into question the results described or referred to in the
Registration Statement, the Pricing Disclosure Package and the
Prospectus. Except as described in the Registration Statement, the
Pricing Disclosure Package and the Prospectus, neither the Company
nor its subsidiaries has received any notices or other
correspondence from the FDA or any other foreign, federal, state or
local governmental or regulatory authority performing functions
similar to those performed by the FDA with respect to any ongoing
clinical or pre-clinical studies or tests requiring the termination
or suspension of such studies or tests. For the avoidance of doubt,
the Company makes no representation or warranty that the results of
any studies, tests or preclinical or clinical trials conducted by
or on behalf of the Company will be sufficient to obtain
governmental approval from the FDA or any foreign, state or local
governmental body exercising comparable authority.
17
2.54
eXtensible Business
Reporting Language. The interactive data in eXtensible
Business Reporting Language included in or incorporated by
reference in the Registration Statement 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.
|
3.
|
Covenants
of the Company. The Company covenants and agrees as
follows:
|
3.1
Amendments to Registration
Statement. The Company shall deliver to the Underwriter,
prior to filing, any amendment or supplement to the Registration
Statement or Prospectus proposed to be filed after the Effective
Date and not file any such amendment or supplement to which the
Underwriter shall reasonably object in writing.
3.2
Federal Securities
Laws.
3.2.1
Compliance. The
Company, subject to Section 3.2.2, shall comply with the
requirements of Rule 424(b) and Rule 430A of the Securities Act
Regulations, and will notify the Underwriter promptly, and confirm
the notice in writing, (i) when any post-effective amendment to the
Registration Statement or any amendment or supplement to any
Preliminary Prospectus, the Pricing Disclosure Package or the
Prospectus shall have been filed and when any post-effective
amendment to the Registration Statement shall become effective;
(ii) of the receipt of any comments from the Commission; (iii) of
any request by the Commission for any amendment to the Registration
Statement or any amendment or supplement to any Preliminary
Prospectus, the Pricing Disclosure Package or the Prospectus or for
additional information; (iv) of the issuance by the Commission of
any stop order suspending the effectiveness of the Registration
Statement or any post-effective amendment or of any order
preventing or suspending the use of any Preliminary Prospectus, the
Pricing Disclosure Package or the Prospectus, or of the suspension
of the qualification of the Public Securities for offering or sale
in any jurisdiction, or of the initiation or, to the
Company’s knowledge, threatening of any proceedings for any
of such purposes or of any examination pursuant to Section 8(d) or
8(e) of the Securities Act concerning the Registration Statement;
and (v) if the Company becomes the subject of a proceeding under
Section 8A of the Securities Act in connection with the Offering of
the Public Securities and Underwriter’s Securities. The
Company shall effect all filings required under Rule 424(b) of the
Securities Act Regulations, in the manner and within the time
period required by Rule 424(b) (without reliance on Rule
424(b)(8)), and shall take such steps as it deems necessary to
ascertain promptly whether the form of prospectus transmitted for
filing under Rule 424(b) was received for filing by the Commission
and, in the event that it was not, it will promptly file such
prospectus. The Company shall use its best efforts to prevent the
issuance of any stop order, prevention or suspension and, if any
such order is issued, to obtain the lifting thereof at the earliest
possible moment.
3.2.2
Continued
Compliance. The Company shall comply with the Securities
Act, the Securities Act Regulations, the Exchange Act and the
Exchange Act Regulations so as to permit the completion of the
distribution of the Public Securities as contemplated in this
Agreement and in the Registration Statement, the Pricing Disclosure
Package and the Prospectus. If at any time when a prospectus
relating to the Public Securities is (or, but for the exception
afforded by Rule 172 of the Securities Act Regulations
(“Rule 172”),
would be) required by the Securities Act to be delivered in
connection with sales of the Public Securities, any event shall
occur or condition shall exist as a result of which it is
necessary, in the reasonable opinion of Underwriter’s Counsel
or counsel for the Company, to (i) amend the Registration Statement
in order that the Registration Statement will not include an untrue
statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading; (ii) amend or supplement the Pricing
Disclosure Package or the Prospectus in order that the Pricing
Disclosure Package or the Prospectus, as the case may be, will not
include any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein not
misleading in the light of the circumstances existing at the time
it is delivered to a purchaser or (iii) amend the Registration
Statement or amend or supplement the Pricing Disclosure Package or
the Prospectus, as the case may be, in order to comply with the
requirements of the Securities Act or the Securities Act
Regulations, the Company will promptly (A) give the Underwriter
notice of such event; (B) prepare any amendment or supplement as
may be necessary to correct such statement or omission or to make
the Registration Statement, the Pricing Disclosure Package or the
Prospectus comply with such requirements and, a reasonable amount
of time prior to any proposed filing or use, furnish the
Underwriter with copies of any such amendment or supplement and (C)
file with the Commission any such amendment or supplement;
provided that the Company
shall not file or use any such amendment or supplement to which the
Underwriter or Underwriter Counsel shall reasonably object. The
Company will furnish to the Underwriter such number of copies of
such amendment or supplement as the Underwriter may reasonably
request. The Company has given the Underwriter notice of any
filings made pursuant to the Exchange Act or the Exchange Act
Regulations within forty-eight (48) hours prior to the Applicable
Time. The Company shall give the Underwriter notice of its
intention to make any such filing from the Applicable Time until
the later of the Closing Date and the exercise in full or
expiration of the Over-allotment Option specified in Section 1.2
hereof and will furnish the Underwriter with copies of the related
document(s) a reasonable amount of time prior to such proposed
filing, as the case may be, and will not file or use any such
document to which the Underwriter or counsel for the Underwriter
shall reasonably object.
18
3.2.3
Exchange Act
Registration. So long as any of the Warrants remain
outstanding, the Company shall use its commercially reasonable
efforts to (A) maintain the registration of the Common Shares under
the Exchange Act and (B) not deregister the Common Shares under the
Exchange Act without the prior written consent of the Underwriter,
which consent shall not be unreasonably withheld. Nothing in this
Section 3.2.3, however, shall prevent a sale, merger or similar
transaction involving the Company.
3.2.4
Free Writing
Prospectuses. The Company agrees that, unless it obtains the
prior written consent of the Underwriter, it shall not make any
offer relating to the Public Securities that would constitute an
Issuer Free Writing Prospectus or that would otherwise constitute a
“free writing prospectus,” or a portion thereof,
required to be filed by the Company with the Commission or retained
by the Company under Rule 433; provided that the Underwriter shall be
deemed to have consented to each Issuer General Use Free Writing
Prospectus hereto and any “road show that is a written
communication” within the meaning of Rule 433(d)(8)(i) that
has been reviewed by the Underwriter. The Company represents that
it has treated or agrees that it will treat each such free writing
prospectus consented to, or deemed consented to, by the Underwriter
as an “issuer free writing prospectus,” as defined in
Rule 433, and that it has complied and will comply with the
applicable requirements of Rule 433 with respect thereto, including
timely filing with the Commission where required, legending and
record keeping. If at any time following issuance of an Issuer Free
Writing Prospectus there occurred or occurs an event or development
as a result of which such Issuer Free Writing Prospectus conflicted
or would conflict with the information contained in the
Registration Statement or included or would include an untrue
statement of a material fact or omitted or would omit to state a
material fact necessary in order to make the statements therein, in
the light of the circumstances existing at that subsequent time,
not misleading, the Company will promptly notify the Underwriter
and will promptly amend or supplement, at its own expense, such
Issuer Free Writing Prospectus to eliminate or correct such
conflict, untrue statement or omission.
3.3
Delivery to the
Underwriter of Registration Statements. The Company has
delivered or made available or shall deliver or make available to
the Underwriter and Underwriter’s Counsel, without charge,
signed copies of the Registration Statement as originally filed and
each amendment thereto (including exhibits filed therewith or
incorporated by reference therein and documents incorporated or
deemed to be incorporated by reference therein) and signed copies
of all consents and certificates of experts, and upon request will
also deliver to the Underwriter, without charge, a conformed copy
of the Registration Statement as originally filed and each
amendment thereto (without exhibits) for the Underwriter. The
copies of the Registration Statement and each amendment thereto
furnished to the Underwriter will be identical to the
electronically transmitted copies thereof filed with the Commission
pursuant to ▇▇▇▇▇, except to the extent permitted by Regulation
S-T.
3.4
Delivery to the
Underwriter of Prospectuses. The Company has delivered or
made available or will deliver or make available to the
Underwriter, without charge, as many copies of each Preliminary
Prospectus as such Underwriter reasonably requested, and the
Company hereby consents to the use of such copies for purposes
permitted by the Securities Act. The Company will furnish to the
Underwriter, without charge, during the period when a prospectus
relating to the Public Securities is (or, but for the exception
afforded by Rule 172, would be) required to be delivered under the
Securities Act, such number of copies of the Prospectus (as amended
or supplemented) as such Underwriter may reasonably request. The
Prospectus and any amendments or supplements thereto furnished to
the Underwriter will be identical to the electronically transmitted
copies thereof filed with the Commission pursuant to ▇▇▇▇▇, except
to the extent permitted by Regulation S-T.
3.5
Effectiveness and Events
Requiring Notice to the Underwriter. The Company shall,
except to the extent the Company participates in a merger or other
business combination transaction, use its commercially reasonable
efforts to cause the Registration Statement to remain effective
with a current prospectus through and including the expiration date
of the Warrants (or the date all Warrants have been exercised or
duly called, if earlier).The Company shall notify the
Representative immediately and confirm the notice in writing: (i)
of the effectiveness of the Registration Statement and any
amendment thereto; (ii) of the issuance by the Commission of any
stop order or of the initiation, or, to the Company’s
knowledge, the threatening, of any proceeding for that purpose;
(iii) of the issuance by any state securities commission of any
proceedings for the suspension of the qualification of the Public
Securities for offering or sale in any jurisdiction or of the
initiation, or, to the
Company’s knowledge, the threatening, of any proceeding for
that purpose; (iv) of the mailing and delivery to the Commission
for filing of any amendment or supplement to the Registration
Statement or Prospectus; (v) of the receipt of any comments or
request for any additional information from the Commission; and
(vi) of the happening of any event during the period described in
this Section 3.5 that, in the reasonable judgment of the Company,
makes any statement of a material fact made in the Registration
Statement, the Pricing Disclosure Package or the Prospectus untrue
or that requires the making of any changes in (a) the Registration
Statement in order to make the statements therein not misleading,
or (b) in the Pricing Disclosure Package or the Prospectus in order
to make the statements therein, in light of the circumstances under
which they were made, not misleading. If the Commission or any
state securities commission shall enter a stop order or suspend
such qualification at any time, the Company shall use its
commercially reasonable effort to obtain promptly the lifting of
such order.
19
3.6
Review of Financial
Statements. For a period of five (5) years after the date of
this Agreement, the Company, at its expense, shall cause its
regularly engaged independent registered public accounting firm to
review (but not audit) the Company’s financial statements for
each of the three (3) fiscal quarters immediately preceding the
announcement of any quarterly financial information, provided that
such provision shall not prevent a sale, merger or similar
transaction involving the Company.
3.7
Listing. The
Company shall use its commercially reasonable efforts to maintain
the listing of the Common Shares, the Warrant Shares and the
Registered Warrant Shares on the Exchange for at least five (5)
years from the date of this Agreement. Nothing in this Section 3.7,
however, shall prevent a sale, merger or similar transaction
involving the Company.
3.8
Financial Public Relations
Firm. As of the Effective Date, the Company shall have
retained a financial public relations firm reasonably acceptable to
the Underwriter and the Company, which firm shall be experienced in
assisting issuers in public offerings of securities and in their
relations with their security holders, and shall retain such firm
or another firm reasonably acceptable to the Underwriter for a
period of not less than two (2) years after the Effective
Date.
3.9
Reports to the
Underwriter.
3.9.1
Periodic Reports,
etc. For a period of two (2) years after the date of this
Agreement, the Company shall furnish or make available to the
Underwriter upon request copies of such financial statements and
other periodic and special reports as the Company from time to time
furnishes generally to holders of any class of its securities and
also promptly furnish to the Underwriter: (i) a copy of each
periodic report the Company shall be required to file with the
Commission under the Exchange Act and the Exchange Act Regulations;
(ii) a copy of every press release and every news item and article
with respect to the Company or its affairs which was released by
the Company; (iii) a copy of each Report on Form 6-K prepared and
filed by the Company; (iv) five (5) copies of each registration
statement filed by the Company under the Securities Act; and (v)
such additional documents and information with respect to the
Company and the affairs of any future subsidiaries of the Company
as the Underwriter may from time to time reasonably request;
provided the Underwriter
shall sign, if requested by the Company, a Regulation FD compliant
confidentiality agreement which is reasonably acceptable to the
Underwriter and Underwriter Counsel in connection with the
Underwriter’s receipt of such information. Documents filed
with the Commission pursuant to its ▇▇▇▇▇ system shall be deemed to
have been delivered or made available to the Underwriter pursuant
to this Section 3.9.1.
3.9.2
Transfer Agent; Transfer
Sheets. For a period of two (2) years after the date of this
Agreement, the Company shall retain a transfer agent and registrar
acceptable to the Underwriter (the “Transfer Agent”) and shall furnish
to the Underwriter at the Company’s sole cost and expense
such transfer sheets of the Company’s securities as the
Underwriter may reasonably request, including the daily and monthly
consolidated transfer sheets of the Transfer Agent and DTC. AST
Trust Company (Canada) and American Stock Transfer & Trust
Company LLC are acceptable to the Underwriter to act as Transfer
Agent for the Common Shares.
20
3.9.3
Trading Reports.
During such time as the Common Shares, the Warrant Shares and the
Registered Warrant Shares are listed on the Exchange, the Company shall
cooperate to make available to the Underwriter, at the
Company’s expense, such reports published by the Exchange
relating to price trading of the Public Securities, as the
Underwriter shall reasonably request. The parties acknowledge that the
Exchange makes such material available without charge on the
Exchange’s Internet website.
3.10
Payment of
Expenses. The Company
covenants and agrees with the Underwriter that on the Closing Date
the Company will pay or cause to be paid to the Underwriter (i) a
management fee equal to one percent (1%) of the gross proceeds
raised in the Offering, (ii) $35,000 for non-accountable expenses,
(iii) up to $100,000 for invoiced fees and expenses of legal
counsel and other out-of-pocket expenses, and (iv) for the services
of an escrow agent and any actual out-of-pocket cost of such
clearing agent settlement and financing, so long as the cost does
not exceed $10,000; provided, however, that such reimbursement
amount in no way shall limit the indemnification and contribution
provisions of this Agreement. The Underwriter may deduct from the
net proceeds of the Offering payable to the Company on the Closing
Date, or the Option Closing Date, if any, the expenses set forth
herein to be paid by the Company to the Underwriter.
3.11
Application of Net
Proceeds. The Company shall apply the net proceeds from the
Offering received by it in a manner consistent with the application
thereof described under the caption “Use of Proceeds”
in the Registration Statement, the Pricing Disclosure Package and
the Prospectus.
3.12
Delivery of Earnings
Statements to Security Holders. The Company shall make
generally available to its security holders as soon as practicable,
but not later than the first day of the fifteenth (15th) full calendar
month following the date of this Agreement, an earnings statement
(which need not be certified by an independent registered public
accounting firm unless required by the Securities Act or the
Securities Act Regulations, but which shall satisfy the provisions
of Rule 158(a) under Section 11(a) of the Securities Act) covering
a period of at least twelve (12) consecutive months beginning after
the date of this Agreement.
3.13
Stabilization.
Neither the Company nor, to its knowledge, any of its employees,
directors or shareholders (without the consent of the Underwriter)
has taken or shall take, directly or indirectly, any action
designed to or that has constituted or that might reasonably be
expected to cause or result in, under Regulation M of the Exchange
Act, or otherwise, stabilization or manipulation of the price of
any security of the Company to facilitate the sale or resale of the
Public Securities.
3.14
Internal
Controls. Except as described in the Registration Statement,
the Pricing Disclosure Package and the Prospectus, the Company
shall maintain a system of internal accounting controls sufficient
to provide reasonable assurances that: (i) transactions are
executed in accordance with management’s general or specific
authorization; (ii) transactions are recorded as necessary in order
to permit preparation of financial statements in accordance with
GAAP and to maintain accountability for assets; (iii) access to
assets is permitted only in accordance with management’s
general or specific authorization; and (iv) the recorded
accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect
to any differences.
3.15
Accountants. As of
the date of this Agreement, the Company shall retain an independent
registered public accounting firm reasonably acceptable to the
Underwriter, and the Company shall continue to retain a nationally
recognized independent registered public accounting firm for a
period of at least three (3) years after the date of this
Agreement. The Underwriter acknowledges that MNP LLP is acceptable
to the Underwriter.
3.16
FINRA. For a period
of 90 days from the Closing Date, the Company shall advise the
Underwriter (who shall make an appropriate filing with FINRA) if it
is or becomes aware that (i) any officer or director of the
Company, (ii) any beneficial owner of 5% or more of any class of
the Company's securities or (iii) any beneficial owner of the
Company's unregistered equity securities which were acquired during
the 180 days immediately preceding the filing of the Registration
Statement is or becomes an affiliate or associated person of a
FINRA member participating in the Offering (as determined in
accordance with the rules and regulations of FINRA).
3.17
No Fiduciary
Duties. The Company acknowledges and agrees that the
Underwriter’s responsibility to the Company is solely
contractual in nature and that none of the Underwriter or their
affiliates or any selling agent shall be deemed to be acting in a
fiduciary capacity, or otherwise owes any fiduciary duty to the
Company or any of its affiliates in connection with the Offering
and the other transactions contemplated by this
Agreement.
21
3.18
Company Lock-Up
Agreements.
3.18.1
Restriction on Sales of
Capital Stock. The Company, on behalf of itself and any
successor entity, agrees that, without the prior written consent of
the Underwriter, it will not, for a period of ninety (90) days
after the date of this Agreement (the “Lock-Up Period”), (i) offer,
pledge, sell, contract to sell, sell any option or contract to
purchase, purchase any option or contract to sell, grant any
option, right or warrant to purchase, lend, or otherwise transfer
or dispose of, directly or indirectly, any shares of capital stock
of the Company or any securities convertible into or exercisable or
exchangeable for shares of capital stock of the Company; (ii) file
or cause to be filed any registration statement with the Commission
relating to the offering of any shares of capital stock of the
Company or any securities convertible into or exercisable or
exchangeable for shares of capital stock of the Company; or (iii)
enter into any swap or other arrangement that transfers to another,
in whole or in part, any of the economic consequences of ownership
of capital stock of the Company, whether any such transaction
described in clause (i), (ii) or (iii) above is to be settled by
delivery of shares of capital stock of the Company or such other
securities, in cash or otherwise.
The
restrictions contained in this Section 3.18.1 shall not apply to
(i) the Common Shares, Firm Warrants, Option Warrants, Pre-Funded
Warrants or Underwriter’s Warrants to be sold hereunder, (ii)
the issuance by the Company of Common Shares upon the exercise of a
stock option or warrant or the conversion of a security outstanding
on the date hereof, which is disclosed in the Registration
Statement, Pricing Disclosure Package and Prospectus, or pursuant
to the exercise of the Pre-Funded Warrants, (iii) the issuance by
the Company of stock options or shares of capital stock of the
Company to employees, officers and directors of the Company
pursuant to any existing equity compensation plan of the Company,
or (iv) shares of capital stock of the Company or securities
convertible into shares of capital stock of the Company that are
issued as consideration in an acquisition, merger or similar
strategic transaction approved by a majority of the disinterested
directors of the Company, provided that such securities are issued
as “restricted securities” (as defined in Rule 144) and
carry no registration rights that require or permit the filing of
any registration statement in connection therewith within ninety
(90) days after the date of this Agreement, and provided that any
such issuance shall only be to a person (or to the equity holders
of a person) which is, itself or through its subsidiaries, an
operating company or an owner of an asset in a business synergistic
with the business of the Company and shall provide to the Company
additional benefits in addition to the investment of funds, but
shall not include a transaction in which the Company is issuing
securities primarily for the purpose of raising capital or to an
entity whose primary business is investing in
securities.
3.18.2
Restriction on Continuous
Offerings. Notwithstanding the restrictions contained in
Section 3.18.1, the Company, on behalf of itself and any successor
entity, agrees that, without the prior written consent of the
Underwriter, it will not, for a period of two (2) years after the
date of this Agreement, directly or indirectly in any
“at-the-market” or continuous equity transaction, offer
to sell, sell, contract to sell, grant any option to sell or
otherwise dispose of shares of capital stock of the Company or any
securities convertible into or exercisable or exchangeable for
shares of capital stock of the Company.
3.19. Variable Rate Transactions.
From the date hereof until the five-year anniversary of the Closing
Date, the Company shall be prohibited from effecting or entering
into an agreement to effect any issuance by the Company or any of
its Subsidiaries of Common Share or Common Share equivalents (or a
combination of units thereof) involving a Variable Rate
Transaction. “Variable Rate Transaction” means a
transaction in which the Company enters into, or effects a
transaction under an at-the-market offering agreement, whereby the
Company may issue securities at a future determined price.
Notwithstanding the foregoing, on or after the two-year anniversary
of the Closing Date, the Company may enter into an at-the-market
offering agreement. The Underwriter shall be entitled to obtain
injunctive relief against the Company to preclude any such
issuance, which remedy shall be in addition to any right to collect
damages.
3.20
Blue Sky
Qualifications. The Company shall use its commercially
reasonable efforts, in cooperation with the Underwriter, if
necessary, to qualify the Public Securities for offering and sale
under the applicable securities laws of such states and other
jurisdictions (domestic or foreign) as the Underwriter may
designate with the consent of the Company and to maintain such
qualifications in effect so long as required to complete the
distribution of the Public Securities; provided, however, that the Company shall not be
obligated to file any general consent to service of process or to
qualify as a foreign corporation or as a dealer in securities in
any jurisdiction in which it is not so qualified or to subject
itself to taxation in respect of doing business in any jurisdiction
in which it is not otherwise so subject.
3.21
Reporting
Requirements. The Company, during the period when a
prospectus relating to the Public Securities is (or, but for the
exception afforded by Rule 172, would be) required to be delivered
under the Securities Act, will file all documents required to be
filed with the Commission pursuant to the Exchange Act within the
time periods required by the Exchange Act and Exchange Act
Regulations.
22
3.22
Press Releases.
Prior to the Closing Date and any Option Closing Date, the Company
shall not issue any press release or other communication directly
or indirectly or hold any press conference with respect to the
Company, its condition, financial or otherwise, or earnings,
business affairs or business prospects (except for routine oral
marketing communications in the ordinary course of business and
consistent with the past practices of the Company and of which the
Underwriter is notified), without the prior written consent of the
Underwriter, which consent shall not be unreasonably withheld,
unless in the judgment of the Company and its counsel, and after
notification to the Underwriter, such press release or
communication is required by law.
3.23
▇▇▇▇▇▇▇▇-▇▇▇▇▇.
Except as disclosed in the Registration Statement, the Pricing
Disclosure Package and the Prospectus, the Company shall at all
times comply with all applicable provisions of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇
Act in effect from time to time.
4. Conditions
of Underwriter’s Obligations. The obligations of the
Underwriter to purchase and pay for the Public Securities, as
provided herein, shall be subject to (i) the continuing accuracy of
the representations and warranties of the Company as of the date
hereof and as of each of the Closing Date and the Option Closing
Date, if any; (ii) the accuracy of the statements of officers of
the Company made pursuant to the provisions hereof; (iii) the
performance by the Company in all material respects of its
obligations hereunder; and (iv) the following
conditions:
4.1
Regulatory
Matters.
4.1.1
Effectiveness of
Registration Statement; Rule 430A Information. The
Registration Statement has been declared effective by the
Commission under the Securities Act and, at each of the Closing
Date and any Option Closing Date, no stop order suspending the
effectiveness of the Registration Statement or any post-effective
amendment thereto has been issued under the Securities Act, no
order preventing or suspending the use of any Preliminary
Prospectus or the Prospectus has been issued and no proceedings for
any of those purposes have been instituted or are pending or, to
the Company’s knowledge, contemplated by the Commission. The
Company has complied with each request (if any) from the Commission
for additional information. The Prospectus containing the Rule 430A
Information shall have been filed with the Commission in the manner
and within the time frame required by Rule 424(b) (without reliance
on Rule 424(b)(8)) or a post-effective amendment providing such
information shall have been filed with, and declared effective by,
the Commission in accordance with the requirements of Rule 430A. At
the time of such filing, the Company met the requirements of Form
F-1 under the Securities Act. The Registration Statement meets the
requirements set forth in Rule 415(a)(1)(iii) under the Securities
Act with respect to the Warrant Shares and the Registered Warrant
Shares and complies with said Rule.
4.1.2
FINRA Clearance. On
or before the date of this Agreement, the Underwriter shall have
received clearance from FINRA as to the amount of compensation
allowable or payable to the Underwriter as described in the
Registration Statement.
4.1.3
Exchange Stock
Market Clearance. On or before the Closing Date, (i) the
Listing of Additional Shares Notification Form shall have been
submitted to The Nasdaq Capital Market with respect to the Public
Securities (including the Warrant Shares and the Registered Warrant
Shares) and (ii) the Company shall have received conditional
listing approval of the Toronto Stock Exchange with respect
to the listing on such exchange of the Firm Shares, Option Shares
and Registered Warrant Shares, subject to official notice of
issuance and the filing of all required documentation.
4.2
Company Counsel
Matters.
4.2.1
Closing Date Opinion of
Counsel. On the Closing Date, the Underwriter shall have
received the favorable opinion of ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇
PC, U.S. counsel to the Company and Gowling WLG (Canada) LLP,
Canadian counsel to the Company, dated the Closing Date and
addressed to the Underwriter, in a form reasonably acceptable to
the Underwriter.
4.2.2
Option Closing Date
Opinions of Counsel. On the Option Closing Date, if any, the
Underwriter shall have received the favorable opinions of each
counsel listed in Section 4.2.1, dated the Option Closing Date,
addressed to the Underwriter and in form and substance reasonably
satisfactory to the Underwriter, confirming as of the Option
Closing Date, the statements made by such counsels in their
respective opinions delivered on the Closing Date.
23
4.2.3
Reliance. In
rendering such opinions, such counsel may rely: (i) as to matters
involving the application of laws other than the laws of the United
States, Canada and jurisdictions in which they are admitted, to the
extent such counsel deems proper and to the extent specified in
such opinion, if at all, upon an opinion or opinions (in form and
substance reasonably satisfactory to the Underwriter) of other
counsel reasonably acceptable to the Underwriter, familiar with the
applicable laws; and (ii) as to matters of fact, to the extent they
deem proper, on certificates or other written statements of
officers of the Company and officers of departments of various
jurisdictions having custody of documents respecting the corporate
existence or good standing of the Company; provided that copies of any such
statements or certificates shall be delivered to Underwriter
Counsel if requested. The opinions of ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ &
▇▇▇▇▇▇ PC and Gowling WLG (Canada) LLP, and any opinions relied
upon by ▇▇▇▇▇▇▇▇ Ingersoll & Rooney PC and Gowling WLG (Canada)
LLP, respectively, shall include a statement to the effect that it
may be relied upon by Underwriter Counsel in its opinion delivered
to the Underwriter.
4.3
Comfort
Letters.
4.3.1
Cold Comfort
Letter. At the time this Agreement is executed the
Underwriter shall have received a cold comfort letter from the
Auditor containing statements and information of the type
customarily included in accountants’ comfort letters with
respect to the financial statements and certain financial
information contained or incorporated or deemed incorporated by
reference in the Registration Statement, the Pricing Disclosure
Package and the Prospectus, addressed to the Underwriter and in
form and substance satisfactory in all respects to you and to the
Auditor, dated as of
the date of this Agreement.
4.3.2
Bring-down Comfort
Letter. At each of the Closing Date and the Option Closing
Date, if any, the Underwriter shall have received from the Auditor
a letter, dated as of the Closing Date or the Option Closing Date,
as applicable, to the effect that the Auditor reaffirms the
statements made in the letter furnished pursuant to Section 4.3.1,
except that the specified date referred to shall be a date not more
than three (3) business days prior to the Closing Date or the
Option Closing Date, as applicable.
4.4
Officers’
Certificates.
4.4.1
Officers’
Certificate. The Company shall have furnished to the
Underwriter a certificate, dated the Closing Date and any Option
Closing Date (if such date is other than the Closing Date), of its
Chief Executive Officer and its Chief Financial Officer stating
that (i) such officers have carefully examined the Registration
Statement, the Pricing Disclosure Package, any Issuer Free Writing
Prospectus and the Prospectus and, to their knowledge, the
Registration Statement and each amendment thereto, as of the
Applicable Time and as of the Closing Date (or any Option Closing
Date if such date is other than the Closing Date) did not include
any untrue statement of a material fact and did not omit to state a
material fact required to be stated therein or necessary to make
the statements therein not misleading, and the Pricing Disclosure
Package, as of the Applicable Time and as of the Closing Date (or
any Option Closing Date if such date is other than the Closing
Date), any Issuer Free Writing Prospectus as of its date and as of
the Closing Date (or any Option Closing Date if such date is other
than the Closing Date), and the Prospectus and each amendment or
supplement thereto, as of the respective date thereof and as of the
Closing Date, did not include any untrue statement of a material
fact and did not omit to state a material fact necessary in order
to make the statements therein, in the light of the circumstances
in which they were made, not misleading, (ii) since the Applicable
Time, no event has occurred which should have been set forth in a
supplement or amendment to the Registration Statement, the Pricing
Disclosure Package or the Prospectus, (iii) to their knowledge
after reasonable investigation, as of the Closing Date (or any
Option Closing Date if such date is other than the Closing Date),
the representations and warranties of the Company in this Agreement
are true and correct in all material respects (except for those
representations and warranties qualified as to materiality, which
shall be true and correct in all respects and except for those
representations and warranties which refer to facts existing at a
specific date, which shall be true and correct as of such date) and
the Company has complied with all agreements and satisfied all
conditions on its part to be performed or satisfied hereunder at or
prior to the Closing Date (or any Option Closing Date if such date
is other than the Closing Date), and (iv) there has not been,
subsequent to the date of the most recent audited financial
statements included or incorporated by reference in the Pricing
Disclosure Package, any Material Adverse Change in the financial
position or results of operations of the Company, or any change or
development that, singularly or in the aggregate, would reasonably
be expected to involve a Material Adverse Change, in or affecting
the condition (financial or otherwise), results of operations,
business, assets or prospects of the Company, except as set forth
in the Prospectus.
24
4.4.2
Secretary’s
Certificate. At each of the Closing Date and the Option
Closing Date, if any, the Underwriter shall have received a
certificate of the Company signed by the Secretary of the Company,
dated the Closing Date or the Option Date, as the case may be,
respectively, certifying: (i) that each of the Charter and Bylaws is true and complete, has not been
modified and is in full force and effect; (ii) that the resolutions
of the Company’s Board of Directors relating to the Offering
are in full force and effect and have not been modified; (iii) as
to the accuracy and completeness of all correspondence between the
Company or its counsel and the Commission; and (iv) as to the
incumbency of the officers of the Company. The documents referred
to in such certificate shall be attached to such
certificate.
4.5
No Material
Changes. Prior to and on each of the Closing Date and each
Option Closing Date, if any: (i) there shall have been no Material
Adverse Change from the latest dates as of which such condition is
set forth in the Registration Statement and no change in the
authorized capital stock or debt of the Company, the Pricing
Disclosure Package and the Prospectus; (ii) no action, suit or
proceeding, at law or in equity, shall have been pending or
threatened against the Company or any director or officer before or
by any court or federal or state commission, board or other
administrative agency wherein an unfavorable decision, ruling or
finding which could reasonably be expected to cause a Material
Adverse Change, except as set forth in the Registration Statement,
the Pricing Disclosure Package and the Prospectus; (iii) no stop
order shall have been issued under the Securities Act and no
proceedings therefor shall have been initiated or threatened by the
Commission; (iv) no action shall have been taken and no law,
statute, rule, regulation or order shall have been enacted, adopted
or issued by any Governmental Entity which would prevent the
issuance or sale of the Public Securities or could reasonably be
expected to result in a Material Adverse Change; (v) no injunction,
restraining order or order of any other nature by any federal or
state court of competent jurisdiction shall have been issued which
would prevent the issuance or sale of the Public Securities or
result, or potentially result in a Material Adverse Change;
business or operations of the Company; and (vi) the Registration
Statement, the Pricing Disclosure Package and the Prospectus and
any amendments or supplements thereto shall contain all material
statements which are required to be stated therein in accordance
with the Securities Act and the Securities Act Regulations and
shall conform in all material respects to the requirements of the
Securities Act and the Securities Act Regulations, and neither the
Registration Statement, the Pricing Disclosure Package nor the
Prospectus nor any amendment or supplement thereto shall contain
any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which
they were made, not misleading.
4.6
No Material Misstatement
or Omission. The Underwriter shall not have discovered and
disclosed to the Company on or prior to the Closing Date and any
Option Closing Date that the Registration Statement or any
amendment or supplement thereto contains an untrue statement of a
fact which, in the opinion of Underwriter Counsel, is material or
omits to state any fact which, in the opinion of such counsel, is
material and is required to be stated therein or is necessary to
make the statements therein not misleading, or that the
Registration Statement, Pricing Disclosure Package or the
Prospectus or any amendment or supplement thereto contains an
untrue statement of fact which, in the opinion of such counsel, is
material or omits to state any fact which, in the opinion of such
counsel, is material and is necessary in order to make the
statements, in the light of the circumstances under which they were
made, not misleading.
4.7
Delivery of
Agreements.
4.7.1
Lock-Up Agreements.
On or before the date of this Agreement, the Company shall have
delivered to the Underwriter executed copies of the Lock-Up
Agreements from each of the persons listed in Schedule 2 hereto.
4.7.2
Pre-Funded Warrant
Agreements. On the Closing Date, the Company shall have
delivered to the Underwriter executed copies of the Pre-Funded
Warrant Agreements.
4.7.3
Warrant Agreements.
On the Closing Date and each Option Closing Date if applicable, the
Company shall have delivered to the Underwriter executed copies of
the Warrant Agreements.
25
4.7.4
Underwriter’s
Warrant Agreement. On the Closing Date and each Option
Closing Date if applicable, the Company shall have delivered to the
Underwriter executed copies of the Underwriter’s Warrant
Agreement.
4.8
Additional
Documents. At the Closing Date and at each Option Closing
Date (if any) Underwriter Counsel shall have been furnished with
such documents and opinions as they may reasonably require for the
purpose of enabling Underwriter Counsel to deliver an opinion to
the Underwriter, or in order to evidence the accuracy of any of the
representations or warranties, or the fulfillment of any of the
conditions, herein contained; and all proceedings taken by the
Company in connection with the issuance and sale of the Public
Securities and the Underwriter’s Securities as herein
contemplated shall be satisfactory in form and substance to the
Underwriter and Underwriter Counsel.
|
5.
|
Indemnification.
|
5.1
Indemnification of the
Underwriter.
5.1.1
General. Subject to
the conditions set forth below, the Company agrees to indemnify and
hold harmless the Underwriter, its affiliates and each of its and
their respective directors, officers, members, employees,
representatives and agents and each person, if any, who controls
any such Underwriter within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act (collectively the
“Underwriter Indemnified
Parties,” and each an “Underwriter Indemnified Party”),
against any and all loss, liability, claim, damage and expense
whatsoever (including but not limited to any and all legal or other
expenses reasonably incurred in investigating, preparing or
defending against any litigation, commenced or threatened, or any
claim whatsoever, whether arising out of any action between any of
the Underwriter Indemnified Parties and the Company or between any
of the Underwriter Indemnified Parties and any third party, or
otherwise) to which they or any of them may become subject under
the Securities Act, the Exchange Act or any other statute or at
common law or otherwise or under the laws of foreign countries,
arising out of or based upon any untrue statement or alleged untrue
statement of a material fact contained in (i) the Registration
Statement, the Pricing Disclosure Package, the Preliminary
Prospectus, the Prospectus or in any Issuer Free Writing Prospectus
(as from time to time each may be amended and supplemented); (ii)
any materials or information provided to investors by, or with the
approval of, the Company in connection with the marketing of the
Offering, including any “road show” or investor
presentations made to investors by the Company (whether in person
or electronically); or (iii) any application or other document or
written communication (in this Section 5, collectively called
“application”)
executed by the Company or based upon written information furnished
by the Company in any jurisdiction in order to qualify the Public
Securities under the securities laws thereof or filed with the
Commission, any state securities commission or agency, the Exchange
or any other national securities exchange; or the omission or
alleged omission therefrom of a material fact required to be stated
therein or necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading,
unless such statement or omission was made in reliance upon, and in
conformity with, the Underwriter’s Information. With respect
to any untrue statement or omission or alleged untrue statement or
omission made in the Pricing Disclosure Package, the indemnity
agreement contained in this Section 5.1.1 shall not inure to the
benefit of any Underwriter Indemnified Party to the extent that any
loss, liability, claim, damage or expense of such Underwriter
Indemnified Party results from the fact that a copy of the
Prospectus was not given or sent to the person asserting any such
loss, liability, claim or damage at or prior to the written
confirmation of sale of the Public Securities to such person as
required by the Securities Act and the Securities Act Regulations,
and if the untrue statement or omission has been corrected in the
Prospectus, unless such failure to deliver the Prospectus was a
result of non-compliance by the Company with its obligations under
Section 3.3 hereof.
5.1.2
Procedure. If any
action is brought against an Underwriter Indemnified Party in
respect of which indemnity may be sought against the Company
pursuant to Section 5.1.1, such Underwriter Indemnified Party shall
promptly notify the Company in writing of the institution of such
action and the Company shall assume the defense of such action,
including the employment and fees and expenses of counsel (subject
to the reasonable approval of such Underwriter Indemnified Party)
and payment of actual expenses. Such Underwriter Indemnified Party
shall have the right to employ its or their own counsel in any such
case, but the fees and expenses of such counsel shall be at the
expense of such Underwriter Indemnified Party unless (i) the
employment of such counsel at the expense of the Company shall have
been authorized in writing by the Company in connection with the
defense of such action, (ii) the Company shall not have employed
counsel to have charge of the defense of such action promptly after
notice of commencement of the action, (iii) such indemnified party
or parties shall have reasonably concluded that there may be
defenses available to it or them which are different from or
additional to those available to the Company (in which case the
Company shall not have the right to direct the defense of such
action on behalf of the indemnified party or parties),
(iv) such
indemnified party or parties shall have reasonably concluded that a
conflict or potential conflict exists (based on advice of counsel
to such indemnified party) between the indemnified party or parties
and the indemnifying party or (v) the Company has not employed
counsel reasonably satisfactory to such indemnified party to assume
the defense of such action in any of which events the
26
reasonable fees and
expenses of not more than one additional firm of attorneys selected
by the Underwriter Indemnified Party (in addition to local counsel)
shall be borne by the Company. Notwithstanding anything to the
contrary contained herein, if any Underwriter Indemnified Party
shall assume the defense of such action as provided above, the
Company shall have the right to approve the terms of any settlement
of such action, which approval shall not be unreasonably
withheld.
5.2
Indemnification of the
Company. The Underwriter agrees to indemnify and hold
harmless the Company, its directors, its officers who signed the
Registration Statement and persons who control the Company within
the meaning of Section 15 of the Securities Act or Section 20 of
the Exchange Act against any and all loss, liability, claim, damage
and expense described in the foregoing indemnity from the Company
to the Underwriter, as incurred, but only with respect untrue
statements or omissions, or alleged untrue statements or omissions
made in the Registration Statement, any Preliminary Prospectus, the
Pricing Disclosure Package or Prospectus or any amendment or
supplement thereto or in any application, in reliance upon, and in
strict conformity with, the Underwriter’s Information. In
case any action shall be brought against the Company or any other
person so indemnified based on any Preliminary Prospectus, the
Registration Statement, the Pricing Disclosure Package or
Prospectus or any amendment or supplement thereto or any
application, and in respect of which indemnity may be sought
against any Underwriter, such Underwriter shall have the rights and
duties given to the Company, and the Company and each other person
so indemnified shall have the rights and duties given to the
Underwriter by the provisions of Section 5.1.2. The Company agrees
promptly to notify the Underwriter of the commencement of any
litigation or proceedings against the Company or any of its
officers, directors or any person, if any, who controls the Company
within the meaning of Section 15 of the Securities Act or Section
20 of the Exchange Act, in connection with the issuance and sale of
the Public Securities or in connection with the Registration
Statement, the Pricing Disclosure Package, the Prospectus, or any
Issuer Free Writing Prospectus.
5.3
Contribution.
5.3.1
Contribution
Rights. If the indemnification provided for in this Section
5 shall for any reason be unavailable to or insufficient to hold
harmless an indemnified party under Section 5.1 or 5.2 in respect
of any loss, claim, damage or liability, or any action in respect
thereof, referred to therein, then each indemnifying party shall,
in lieu of indemnifying such indemnified party, contribute to the
amount paid or payable by such indemnified party as a result of
such loss, claim, damage or liability, or action in respect
thereof, (i) in such proportion as shall be appropriate to reflect
the relative benefits received by the Company, on the one hand, and
the Underwriter, on the other, from the Offering of the Public
Securities, or (ii) if the allocation provided by clause (i) above
is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to
in clause (i) above but also the relative fault of the Company, on
the one hand, and the Underwriter, on the other, with respect to
the statements or omissions that resulted in such loss, claim,
damage or liability, or action in respect thereof, as well as any
other relevant equitable considerations. The relative benefits
received by the Company, on the one hand, and the Underwriter, on
the other, with respect to such Offering shall be deemed to be in
the same proportion as the total net proceeds from the Offering of
the Public Securities purchased under this Agreement (before
deducting expenses) received by the Company, as set forth in the
table on the cover page of the Prospectus, on the one hand, and the
total underwriting discounts and commissions received by the
Underwriter with respect to the Common Shares purchased under this
Agreement, as set forth in the table on the cover page of the
Prospectus, on the other hand. The relative fault shall be
determined by reference to whether the untrue or alleged untrue
statement of a material fact or omission or alleged omission to
state a material fact relates to information supplied by the
Company or the Underwriter, 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
Underwriter agree that it would not be just and equitable if
contributions pursuant to this Section 5.3.1 were to be determined
by pro rata allocation or by any other method of allocation that
does not take into account the equitable considerations referred to
herein. The amount paid or payable by an indemnified party as a
result of the loss, claim, damage or liability, or action in
respect thereof, referred to above in this Section 5.3.1 shall be
deemed to include, for purposes of this Section 5.3.1, any legal or
other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or
claim. Notwithstanding the provisions of this Section 5.3.1, in no
event shall an Underwriter be required to contribute any amount in
excess of the amount by which the total underwriting discounts and
commissions received by such Underwriter with respect to the
Offering of the Public Securities exceeds the amount of any damages
that such Underwriter has otherwise been required to pay by reason
of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) shall be
entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.
27
5.3.2
Contribution
Procedure. Within fifteen (15) days after receipt by any
party to this Agreement (or its representative) of notice of the
commencement of any action, suit or proceeding, such party will, if
a claim for contribution in respect thereof is to be made against
another party (“contributing
party”), notify the contributing party of the
commencement thereof, but the failure to so notify the contributing
party will not relieve it from any liability which it may have to
any other party other than for contribution hereunder. In case any
such action, suit or proceeding is brought against any party, and
such party notifies a contributing party or its representative of
the commencement thereof within the aforesaid fifteen (15) days,
the contributing party will be entitled to participate therein with
the notifying party and any other contributing party similarly
notified. Any such contributing party shall not be liable to any
party seeking contribution on account of any settlement of any
claim, action or proceeding affected by such party seeking
contribution on account of any settlement of any claim, action or
proceeding affected by such party seeking contribution without the
written consent of such contributing party, which consent will not
be unreasonably withheld. The contribution provisions contained in
this Section 5.3.2 are intended to supersede, to the extent
permitted by law, any right to contribution under the Securities
Act, the Exchange Act or otherwise available.
|
6.
|
Default
by the Underwriter.
|
6.1
[Reserved]
6.2
Default Exceeding 10% of
Firm Securities or Option Securities. In the event that the
Underwriter shall default in its obligation to purchase the Firm
Securities or the Option Securities, if the Over-allotment Option
is exercised hereunder, with respect to more than 10% of the Firm
Securities or Option Securities, you may in your discretion arrange
for yourself or for another party or parties to purchase such Firm
Securities or Option Securities to which such default relates on
the terms contained herein. If, within one (1) Business Day after
such default relating to more than 10% of the Firm Securities or
Option Securities, you do not arrange for the purchase of such Firm
Securities or Option Securities, then the Company shall be entitled
to a further period of one (1) Business Day within which to procure
another party or parties satisfactory to you to purchase said Firm
Securities or Option Securities on such terms. In the event that
neither you nor the Company arrange for the purchase of the Firm
Securities or Option Securities to which a default relates as
provided in this Section 6, this Agreement will automatically be
terminated by you or the Company without liability on the part of
the Company (except as provided in Sections 3.9 and 5 hereof) or
the Underwriter (except as provided in Section 5 hereof);
provided, however, that if such default occurs
with respect to the Option Securities, this Agreement will not
terminate as to the Firm Securities.
6.3
Postponement of Closing
Date. In the event that the Firm Securities or Option
Securities to which the default relates are to be purchased by
another party or parties as aforesaid, you or the Company shall
have the right to postpone the Closing Date or Option Closing Date
for a reasonable period, but not in any event exceeding five (5)
Business Days, in order to effect whatever changes may thereby be
made necessary in the Registration Statement, the Pricing
Disclosure Package or the Prospectus or in any other documents and
arrangements, and the Company agrees to file promptly any amendment
to the Registration Statement, the Pricing Disclosure Package or
the Prospectus that in the opinion of counsel for the Underwriter
may thereby be made necessary. The term “Underwriter” as used in this
Agreement shall include any party substituted under this Section 6
with like effect as if it had originally been a party to this
Agreement with respect to such Common Shares.
|
7.
|
Additional
Covenants.
|
7.1
Board Composition and
Board Designations. The Company shall ensure that: (i) the
qualifications of the persons serving as members of the Board of
Directors and the overall composition of the Board comply with the
▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act, with the Exchange Act and with the listing
rules of the Exchange or any other national securities exchange, as
the case may be, in the event the Company seeks to have its Public
Securities listed on another exchange or quoted on an automated
quotation system, and (ii) if applicable, at least one (1) member
of the Audit Committee of the Board of Directors qualifies as an
“audit committee financial expert,” as such term is
defined under Regulation S-K and the listing rules of the
Exchange.
28
7.2
Prohibition on Press
Releases and Public Announcements. The Company shall not
issue press releases or engage in any other publicity, without the
Underwriter’s prior written consent, for a period ending at
5:00 p.m., Eastern time, on the first (1st) Business Day
following the forty-fifth (45th) day after the
Closing Date, other than normal and customary releases issued in
the ordinary course of the Company’s business or as may be required to comply with
applicable law or the requirements of the Exchange.
|
8.
|
Effective
Date of this Agreement and Termination Thereof.
|
8.1
Effective Date.
This Agreement shall become effective when both the Company and the
Underwriter have executed the same and delivered counterparts of
such signatures to the other party.
8.2
Termination. The
Underwriter shall have the right to terminate this Agreement at any
time prior to any Closing Date, (i) if any domestic or
international event or act or occurrence has materially disrupted,
or in your opinion will in the immediate future materially disrupt,
general securities markets in the United States; or (ii) if trading
on the New York Stock Exchange or the Nasdaq Stock Market LLC shall
have been suspended or materially limited, or minimum or maximum
prices for trading shall have been fixed, or maximum ranges for
prices for securities shall have been required by FINRA or by order
of the Commission or any other government authority having
jurisdiction; or (iii) if the United States shall have become
involved in a new war or an increase in major hostilities; or (iv)
if a banking moratorium has been declared by a New York State or
federal authority; or (v) if a moratorium on foreign exchange
trading has been declared which materially adversely impacts the
United States securities markets; or (vi) if the Company shall have
sustained a material loss by fire, flood, accident, hurricane,
earthquake, theft, sabotage or other calamity or malicious act
which, whether or not such loss shall have been insured, will, in
your opinion, make it inadvisable to proceed with the delivery of
the Firm Securities or Option Securities; or (vii) if the Company
is in material breach of any of its representations, warranties or
covenants hereunder; or (viii) if the Underwriter shall have become
aware after the date hereof of such a Material Adverse Change in
the conditions or prospects of the Company, or such adverse
material change in general market conditions as in the
Underwriter’s judgment would make it impracticable to proceed
with the offering, sale and/or delivery of the Public Securities or
to enforce contracts made by the Underwriter for the sale of the
Public Securities.
8.3
Expenses.
Notwithstanding anything to the contrary in this Agreement, except
in the case of a default by the Underwriter, pursuant to Section
6.2 above, in the event that this Agreement is terminated prior to
the Closing Date for any reason whatsoever, within the time
specified herein or any extensions thereof pursuant to the terms
herein, the Company shall be obligated to pay to the Underwriter
accountable out-of-pocket expenses related to the transactions
contemplated herein then due and payable (including the fees and
disbursements of Underwriter Counsel) up to $50,000 and upon demand
the Company shall pay the full amount thereof to the Underwriter;
provided, however, that such expense cap in no
way limits or impairs the indemnification and contribution
provisions of this Agreement.
8.4
Indemnification.
Notwithstanding any contrary provision contained in this Agreement,
any election hereunder or any termination of this Agreement, and
whether or not this Agreement is otherwise carried out, the
provisions of Section 5 shall remain in full force and effect and
shall not be in any way affected by, such election or termination
or failure to carry out the terms of this Agreement or any part
hereof.
8.5
Representations,
Warranties, Agreements to Survive. All representations,
warranties and agreements contained in this Agreement or in
certificates of officers of the Company submitted pursuant hereto,
shall remain operative and in full force and effect regardless of
(i) any investigation made by or on behalf of any Underwriter or
its Affiliates or selling agents, any person controlling any
Underwriter, its officers or directors or any person controlling
the Company or (ii) delivery of and payment for the Public
Securities.
29
|
9.
|
Miscellaneous.
|
9.1
Notices. All
communications hereunder, except as herein otherwise specifically
provided, shall be in writing and shall be mailed (registered or
certified mail, return receipt requested), personally delivered,
electronically sent via email or sent by facsimile transmission and
confirmed and shall be deemed given when so delivered, emailed or
faxed and confirmed or if mailed, two (2) days after such
mailing.
If to
the Underwriter:
▇.▇.
▇▇▇▇▇▇▇▇▇▇ & Co., LLC
▇▇▇
▇▇▇▇ ▇▇▇▇▇▇
▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Head of
Investment Banking
Fax
No.: ▇▇▇-▇▇▇-▇▇▇▇
with a
copy (which shall not constitute notice) to:
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ & Hampton LLP
▇▇
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, Esq.
Fax
No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to the
Company:
▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇
▇▇▇▇▇▇,
▇▇▇ ▇▇▇
Attention: ▇▇.
▇▇▇▇▇ ▇▇▇▇▇
Fax No:
(▇▇▇) ▇▇▇-▇▇▇▇
with
copies (which shall not constitute notice) to:
Gowling
WLG (Canada) LLP
▇▇▇▇▇
▇▇▇▇, ▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇ ▇▇▇,
Attention: ▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇, Esq. (facsimile: (▇▇▇) ▇▇▇-▇▇▇▇)
Fax
No: (▇▇▇)
▇▇▇-▇▇▇▇
and
to
▇▇▇▇▇▇▇▇ Ingersoll
& Rooney PC
▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, Esq.
and
▇▇▇▇▇ North, Esq.
Fax No:
(▇▇▇) ▇▇▇-▇▇▇▇
9.2
Research Analyst
Independence. The Company acknowledges that the
Underwriter’s research analysts and research departments are
required to be independent from its investment banking division and
are subject to certain regulations and internal policies, and that
the Underwriter’s research analysts may hold views and make
statements or investment recommendations and/or publish research
reports with respect to the Company and/or the Offering that differ
from the views of their investment banking division. The Company
acknowledges that the Underwriter is a full service securities firm
and as such from time to time, subject to applicable securities
laws, rules and regulations, may effect transactions for its own
account or the account of its customers and hold long or short
positions in debt or equity securities of the Company; provided, however, that nothing in this Section
9.2 shall relieve the Underwriter of any responsibility or
liability it may otherwise bear in connection with activities in
violation of applicable securities laws, rules or
regulations.
30
9.3
Headings. The
headings contained herein are for the sole purpose of convenience
of reference, and shall not in any way limit or affect the meaning
or interpretation of any of the terms or provisions of this
Agreement.
9.4
Amendment. This
Agreement may only be amended by a written instrument executed by
each of the parties hereto.
9.5
Entire Agreement.
This Agreement (together with the other agreements and documents
being delivered pursuant to or in connection with this Agreement)
constitutes the entire agreement of the parties hereto with respect
to the subject matter hereof and thereof, and supersedes all prior
agreements and understandings of the parties, oral and written,
with respect to the subject matter hereof. Except as otherwise
contemplated herein, it is understood and agreed by the parties
hereto that all other binding terms and conditions of that certain
engagement letter between the Company and the Underwriter dated
August 15, 2018 (the “Engagement Letter”), shall remain
valid and binding on, and enforceable against, the Company and in
accordance with the terms thereof. In the event of any conflict
between the terms of the Engagement Letter and the Agreement, the
terms of the Agreement shall prevail.
9.6
Binding Effect.
This Agreement shall inure solely to the benefit of and shall be
binding upon the Underwriter, the Company and the controlling
persons, directors and officers referred to in Section 5 hereof,
and their respective successors, legal representatives, heirs and
assigns, and no other person shall have or be construed to have any
legal or equitable right, remedy or claim under or in respect of or
by virtue of this Agreement or any provisions herein contained. The
term “successors and assigns” shall not include a
purchaser, in its capacity as such, of securities from the
Underwriter.
9.7
Governing Law; Consent to
Jurisdiction; Trial by Jury. This Agreement shall be
governed by and construed and enforced in accordance with the laws
of the State of New York, without giving effect to conflict of laws
principles thereof. The Company hereby agrees that any action,
proceeding or claim against it arising out of, or relating in any
way to this Agreement shall be brought and enforced in the New York
Supreme Court, County of New York, or in the United States District
Court for the Southern District of New York, and irrevocably
submits to such jurisdiction, which jurisdiction shall be
exclusive. The Company hereby waives any objection to such
exclusive jurisdiction and that such courts represent an
inconvenient forum. Any such process or summons to be served upon
the Company may be served by transmitting a copy thereof by
registered or certified mail, return receipt requested, postage
prepaid, addressed to it at the address set forth in Section 9.1
hereof. Such mailing shall be deemed personal service and shall be
legal and binding upon the Company in any action, proceeding or
claim. The Company and the Underwriter agrees that the prevailing
party(ies) in any such action shall be entitled to recover from the
other party(ies) all of its reasonable attorneys’ fees and
expenses relating to such action or proceeding and/or incurred in
connection with the preparation therefor. The Company (on its
behalf and, to the extent permitted by applicable law, on behalf of
its shareholders and affiliates) and the Underwriter hereby
irrevocably waives, to the fullest extent permitted by applicable
law, any and all right to trial by jury in any legal proceeding
arising out of or relating to this Agreement or the transactions
contemplated hereby.
9.8
Execution in
Counterparts. This Agreement may be executed in one or more
counterparts, and by the different parties hereto in separate
counterparts, each of which shall be deemed to be an original, but
all of which taken together shall constitute one and the same
agreement, and shall become effective when one or more counterparts
has been signed by each of the parties hereto and delivered to each
of the other parties hereto. Delivery of a signed counterpart of
this Agreement by facsimile or email/pdf transmission shall
constitute valid and sufficient delivery thereof.
31
9.9
Waiver, etc. The
failure of any of the parties hereto to at any time enforce any of
the provisions of this Agreement shall not be deemed or construed
to be a waiver of any such provision, nor to in any way effect the
validity of this Agreement or any provision hereof or the right of
any of the parties hereto to thereafter enforce each and every
provision of this Agreement. No waiver of any breach,
non-compliance or non-fulfillment of any of the provisions of this
Agreement shall be effective unless set forth in a written
instrument executed by the party or parties against whom or which
enforcement of such waiver is sought; and no waiver of any such
breach, non-compliance or non-fulfillment shall be construed or
deemed to be a waiver of any other or subsequent breach,
non-compliance or non-fulfillment.
[Signature Page
Follows]
32
If the
foregoing correctly sets forth the understanding between the
Underwriter and the Company, please so indicate in the space
provided below for that purpose, whereupon this letter shall
constitute a binding agreement between us.
|
|
Very
truly yours,
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
By:
|
|
|
|
Name:
|
|
|
|
Title:
|
|
|
Confirmed
as of the date first written above:
|
|
|
|
|
|
|
|
▇.▇.
▇▇▇▇▇▇▇▇▇▇ & CO., LLC
|
|
|
|
|
|
|
|
By:
|
|
|
|
|
Name:
|
|
|
|
Title:
|
|
[Signature Page]
33
SCHEDULE 1-A
PRICING INFORMATION
Number
of Firm Shares:
Number
of Pre-Funded Warrants:
Number
of Firm Warrants:
Number
of Option Shares:
Number
of Option Warrants:
Warrant
Exercise Price: $
Public
Offering Price per Firm Share: $
Public
Offering Price per Pre-Funded Warrant: $
Public
Offering Price per Firm Warrant:
Underwriting
Discount per Firm Share: $
Underwriting
Discount per Pre-Funded Warrant: $
Underwriting
Discount per Firm Warrant:
Proceeds
to Company per Firm Share (before expenses): $
Proceeds
to Company per Pre-Funded Warrant (before expenses): $
Proceeds
to Company per Firm Warrant (before expenses): $
34
SCHEDULE 1-B
Issuer Free Writing Prospectus
[
]
35
SCHEDULE 2
List of Lock-Up Parties
[
]
36
EXHIBIT A
Form of Lock-Up Agreement
October
●, 2018
▇.▇.
▇▇▇▇▇▇▇▇▇▇ & Co., LLC
▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Re:
Intellipharmaceutics
International Inc. (the “Company”)
Ladies
and Gentlemen:
The
undersigned is an owner of record or beneficially of certain common
shares of the Company (“Common Shares”) or
securities convertible into or exchangeable or exercisable for
Common Shares. The Company proposes to carry out a public offering
of securities (the “Offering”) for which ▇.▇.
▇▇▇▇▇▇▇▇▇▇ & Co., LLC (the “Underwriter”) will act
as the underwriter pursuant to the underwriting agreement to be entered into between
the Underwriter and the Company with respect to the Offering (the
“Underwriting Agreement”). The undersigned
recognizes that the Offering will be of benefit to the undersigned
and will benefit the Company by, among other things, raising
additional capital for its operations. The undersigned acknowledges
that the Underwriter is relying on the representations and
agreements of the undersigned contained in this letter in carrying
out the Offering and in entering into the Underwriting Agreement.
In
consideration of the foregoing, the undersigned hereby agrees that
the undersigned will not, and will not publicly disclose an
intention to (and will cause any spouse or immediate family member
of the spouse or the undersigned living in the undersigned’s
household not to), without the prior written consent of
the Underwriter (which consent
may be withheld in its sole discretion), directly or indirectly,
sell, offer, contract or grant any option to sell (including,
without limitation, any short sale), grant any option, right or warrant to
purchase, pledge, transfer, establish an open “put
equivalent position” within the meaning of Rule 16a-1(h)
under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), lend or
otherwise dispose of any Common Shares, options, rights or warrants to acquire Common
Shares, or securities exchangeable or exercisable for or
convertible into Common Shares currently owned either of record or
beneficially (as defined in Rule 13d-3 under the Exchange Act) by
the undersigned (or such spouse or family member), including, without limitation, entering into any
swap or other arrangement that transfers, in whole or in part, the
economic consequences of the ownership of Common Shares or
publicly announce an intention to do any of the foregoing, for a
period commencing on the date hereof and continuing through the
close of trading on the date ninety (90) days after the date of the
final prospectus relating to the
Offering (the “Restriction Period”), except for
(A) transactions related to Common Shares or other securities
acquired in the Offering or in the open market after the completion
of the Offering, (B) bona fide gifts, sales or other dispositions
of shares of any class of the Company’s capital stock, in
each case that are made exclusively between and among the
undersigned or members of the undersigned’s family, or
affiliates of the undersigned, including its partners (if a
partnership) or members (if a limited liability company), (C)
transfers to any trust for the direct or indirect benefit of the
undersigned or a member of the immediate family (as defined below)
of the undersigned, or (D) transfers by will, other testamentary
document or intestate succession to the legal representative, heir,
beneficiary, or a member of the immediate family of the
undersigned; provided that in the case of any transfer or
distribution pursuant to clause (B), (C) or (D), (1) each donee or
distributee shall execute and deliver to the Underwriter a lock-up
letter in the form of this paragraph and (2) any such transfer
shall not involve a disposition for value; and provided, further,
that in the case of any transfer or distribution pursuant to clause
(B), (C) or (D), no filing by any party (donor, donee, transferor
or transferee) under the Exchange Act or other public announcement
shall be required or shall be made voluntarily in connection with
such transfer or distribution (other than a filing on a Form 5 made
after the expiration of the Restriction Period). Beneficial
ownership shall be calculated in accordance with Section 13(d) of
the Exchange Act.
If the
undersigned is an officer or director of the Company: (A)
notwithstanding any provision of this agreement to the contrary,
the share transfer restrictions set forth above shall apply to any
and all issuer-directed shares received by the undersigned in the
Offering; and (B) if the Underwriter determines in its sole
discretion to consent to a requested release or waiver of the
foregoing restrictions in connection with a transfer of Common
Shares, (i) as required by the Financial Industry Regulatory
Authority, Inc., the Underwriter intends to notify the Company of
the impending release or waiver at least three (3) business days
before the effective date of such release or waiver, and (ii) the
Company (in accordance with the provisions of the Underwriting
Agreement) will announce the impending release or waiver by press
release through a major news service at least two (2) business days
before the effective date of the release or waiver. Any release or
waiver granted by the Underwriter hereunder to any such officer or
director shall only be effective two (2) business days after the
publication date of such press release. The provisions of this
paragraph will not apply if both (a) the release or waiver is
effected solely to permit a transfer not for consideration and (b)
the transferee has agreed in writing to be bound by the same terms
described in this agreement that are applicable to the transferor
to the extent and for the duration that such terms remain in effect
at the time of the transfer.
37
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 Common Shares held by the undersigned
except in compliance with the foregoing restrictions, and any duly
appointed transfer agent and registrar for the registration or
transfer of Common Shares described herein are hereby authorized to
decline to make any transfer of such Common Shares if such transfer
would constitute a violation or breach of this
agreement.
With
respect to the Offering only, the undersigned waives any
registration rights relating to registration under the Securities
Act of 1933, as amended, of any Common Shares owned either of
record or beneficially by the undersigned, including any rights to
receive notice of the Offering.
The
undersigned understands that, (1) if the Underwriting Agreement has
not been executed on or before [
], 2018
(provided that the Company may by written notice
to the undersigned prior to [
], 2018 extend such date for a period of up to an additional
[ ] months), (2) if the Underwriting Agreement (other than the
provisions thereof which survive termination) shall terminate or be
terminated prior to payment for and delivery of the securities to
be sold thereunder or (3) after [
], 2018, if the Company advises in writing to the
Underwriter that it has determined not to proceed with the Offering
prior to the execution of the Underwriting Agreement, the
undersigned shall be released from all obligations under this
agreement.
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 hereby agrees that, to the extent that the terms of
this agreement conflict with or are in any way inconsistent with
any registration rights agreement, any market standoff agreement or
any other lock-up agreement related to the Common Shares to which
the undersigned and the Company may be party, this agreement
supersedes such registration rights agreement, market standoff
agreement or other lock-up agreement.
[Signature page follows]
38
This
agreement is irrevocable and will be binding on the undersigned and
the respective successors, heirs, personal representatives, and
assigns of the undersigned.
This
letter agreement shall be governed by and construed in accordance
with the laws of the State of New York, without regard to the
conflict of laws principles thereof.
Very
truly yours,
____________________________________
Name of
Securityholder/Director/Officer
(Print
exact name)
By:_________________________________
Signature
If not
signing in an individual capacity:
____________________________________
Name of
Authorized Signatory (Print)
____________________________________
Title
of Authorized Signatory (Print)
(indicate capacity
of person signing if signing as custodian, trustee or on behalf of
an entity)